The Stories We Can Tell Without Data

A few weeks ago, Bloomberg published two scathing articles about the microfinance industry. The articles asserted that major investors—both public and private—are making massive profits through their investments in microfinance, while the industry systematically hurts borrowers. The article begins:

Suicides, debtors’ prisons and delinquent borrowers forced to sell their land—the grim social costs linked to microfinance a decade ago were supposed to be a relic of the past. But efforts to clean up the industry lost momentum, and today billions of dollars are flooding into a system that promises the world’s poor a better life while often compounding their misery.

As I shared in an article I posted on LinkedIn yesterday, the claims in this article are not supported by the data.

Most Impact Reports Are Nothing More Than Stories

How could this be?

It’s because this article falls into an all-too-common trap: relying on robust, objective data sets to profile the financial returns to microfinance investors; and resorting to a handful of interviews and case studies of borrowers, plus a number of expert interviews, to paint the story of social impact.

The question we must ask is: how can it possibly be that, in 2022, the social impact of an industry that reaches more than 140 million clients can credibly be assessed from a few dozen client interviews?

And the answer is: because this is common, accepted practice for assessing most social impact.

For most investors, even those who have a stated intention to create social impact, the “assessment” of this impact is a storytelling exercise. These stories are often based on a handful of anecdotes or case studies, which might include conversations with a small number of customers.

Indeed, if you pick up an annual social impact report from most investors or companies, what you’ll have in your hands is, most likely, a narrative exercise devoid of first-hand data.

So, it is no great surprise that microfinance—a well-established, well-respected sector in social investment—has fallen victim to this same sort of storytelling exercise…only this time, the individual case studies paint a particularly troubling picture of the industry.

Better Social Data is Available in Microfinance

My response to the Bloomberg article points out that there is, in fact, a massive dataset that captures the lived experience of nearly 18,000 microfinance clients who represent 25 million microfinance customers.

This dataset, gathered by the company I run, 60 Decibels, shows that microfinance is creating positive outcomes for the vast majority of borrowers:

Nearly three in four of the clients we spoke to said that their loan repayments are “not a problem”…. Seven in 10 of these clients credit their microfinance institution with helping them strengthen their financial resilience, meaning that they are better able to face a major expense. Four in five clients told us their lives are improved thanks to access to microfinance, with a subset of these, one in three, saying their lives are ’very much improved.’ Similarly, four in five clients say they are better able to reach their financial goals thanks to microfinance.

The dataset also shows that, for a small subset of microfinance customers, their microfinance loans are indeed a burden, that their repayments are causing major strain on their well-being, and that their lives are worse, not better, because of their microfinance loans.

The point is: like most financial products, microfinance has the potential to create both benefit and harm. How the service is delivered, and, in particular, product design and client protection practices, play major roles in determining the impact of this product on the lives of millions of customers.

Of course, this more nuanced version of the story doesn’t make for flashy headlines. Then again, we shouldn’t be surprised that the microfinance industry, or any industry that aims to create social impact, would be vulnerable to such a story being written.

Until we set a new standard, one in which regularly collected, objective, comparable, quantifiable social impact data is expected for anyone claiming to create social impact, we will remain an industry that relies on storytelling.

You can read my full article here.

A Different Walk Every Day

My 2-year-old dog, Birdie, needs to walk at least five miles a day to be calm, relaxed and happy.

My wife and I have concluded that the best way to make this work is with lots of walking first thing in the morning. I’ve been taking her 3 miles right when I wake up, and my wife takes her another mile or so when she walks our youngest daughter to school.

I’ve chosen to walk the same route nearly every day. This makes the timing predictable, and it also helps for training purposes (especially if I let her off leash).

A lot of days, the walk/run is great: the air is cool, dew is on the grass, it’s quiet and beautiful, and I feel lucky to be out.

And some days it feels like drudgery. Not only the same walk as yesterday, but the same walk I’ll do tomorrow, and the day after that, until forever. And then I’m bummed and a little overwhelmed.

The good news is that this thought—“am I really going to be doing this same walk every morning for the next decade?”—gets obliterated immediately when I find myself, say, in some high grass with Birdie, and I start watching her: nose twitching like crazy, tail wagging, searching each tuft of grass and thicket of plants for a squirrel, chipmunk, bunny, or turtle—or just to figure out what that great smell is.

We walked through this high grass yesterday, and we will tomorrow, of course.

But this smell, right here and right now, is new and fascinating.

Where I’m getting things totally wrong is my “this walk” construct: an artificial mental shorthand that incorrectly equates today’s walk with yesterday’s and with tomorrow’s.

This is nothing less than lazy thinking by my lazy mind. In my effort to simplify the world, I completely disconnect from the present, and completely miss what is really going on.

This mistake is easy to make, and it’s the reason why we lose momentum and enthusiasm around the work we set out to do.

You can see the conundrum: there is literally no task that we can master without long-term, repeated work.

This means that we need a mindset that will allow us to walk the path of mastery.

This mindset doesn’t begin with commitment or work ethic.

It begins with remembering to stay present and curious.

When we are present, when we are curious, we can see our reality anew. We are constantly in a new moment and always exploring. We are forever on the cusp of discovering what is different about this specific thing at this moment of this day.

Even, and especially, if that different thing is us.

Playing fast, slowly

My father, who is a concert pianist, reminded me and my daughter of this idea a little while ago.

Consider this passage, from Chopin’s Etude Op. 10 No. 5 (‘black note etude’).

This whole section, all 64 notes, goes by in less than four seconds if played at tempo. The question is: how to practice this section, or the rest of the piece for that matter, when you’re just getting started?

The natural, and most common, approach is to play each note one at a time at a reasonable tempo and, over time, increase that tempo.

My dad argues that this is a road to nowhere: there’s no way to play note by note by note and ultimately hit the fast tempo.

Instead, he suggests: play fast, slowly.

This means picking out very small sections, playing them at full tempo, then pausing, and doing the same for the next section. Like this:

In this way, you’re teaching your hand, and your brain, to play at full tempo, and using the pauses to give yourself enough space and time to set up for the next group of notes.

Over time, then, your job is not “play faster.”

Instead, your job is to “shorten the pauses” until they disappear.

This works for four reasons:

  1. You’re exposing and teaching your body the physical sensation of playing at speed. So much of what we learn—in piano, surely, but everywhere else as well—is learned in the body and not just in the mind.
  2. You’re transforming groups of 6 or 12 individual notes—each of which had to be thought of, processed, and remembered individually—into blocks. It’s easy for the mind to think of a 6- or 12-note block as ‘one thing’ after a bit of practice. And since playing the piano is mostly about your mind keeping up with the torrent of notes your hands have to play, any ‘chunking’ you can do of this overwhelming amount of information allows you to speed up.
  3. The breaks, at the beginning, are much longer than the time you spend playing. When doing something new and difficult, we need extra time to recover and reset.
  4. You’re taking something that’s dangerous—in the sense of “if I play this at full speed, it will fall apart”—and making it safe, thereby building confidence and competence. “I can’t play the whole passage at speed (yet). But I can play these six notes at speed, with full confidence that I won’t mess this little bit up.” And then, over time, the little bit grows, as does your confidence.

What’s powerful about this isn’t only the counterintuitive approach to solving the problem. It’s the conjecture that our standard approach must always have a view towards what it will ultimately become.

Is this an approach, or a process, that both works for where I am today and will get me to tomorrow?

A little bit every day

More often than not, we’re comfortable with “a lot,” and we’re comfortable with “nothing.”

It’s easy to make a big push for something when we’re feeling inspired: a New Year’s resolution; after reading a great article on the benefits (or drawbacks) of coffee; while on vacation.

Often, that big push either overshoots (we overdo it and get tired), or our inspiration wanes.

Which is why “a little bit every day” is tougher, and more valuable, than it appears.

It requires us to find out what “a little bit” for this new thing means to us: the smallest possible dosage that will make a difference.

And it requires us to do this meaningful thing each and every day.

My natural inclination is get inspired, overdo things, fall short/get injured, and then get frustrated. Then I give up.

The biggest changes I’ve made have happen when I’ve made small, consistent, long term commitments to things that really matter: from generosity to running to listening to recovering from injury.

This isn’t a conceptual point or a conceptual blog post. I encourage you to pick something that matters to you, figure out what “a little bit” would be, and commit to doing that for 30 days. You can even use Austin Kleon’s 30-day challenge printout to keep track.

A little bit every day adds up to a lot. And it’s rarer than it appears.

Seeing the Elephant

It’s easy to assume that the more senior you get in an organization, the more you can see the whole.

This is only partially true.

It’s true that you have more access to a facsimile of the whole, whether through dashboards of KPIs or access to other senior people who run major functions.

But all these inputs are at best proxies for what’s really going on. While they serve as early warning indicators that can tell you where to dig deeper, they often lack texture, nuance, and context,  and are at best a fuzzy representation of the whole.

This is why it’s doubly important, no matter where you sit in an organization, to let go of the notion that the senior folks “just know more stuff” and, therefore, that they don’t have much to learn from or don’t need to hear from you.

The reality is each of us sees our own small, unique part of the elephant, and beyond that, we all have massive blind spots.

For any of us to truly understand the whole, we must travel far and wide, within and outside our organization, and hear what everyone has to say.

And we must engender a company culture that encourages everyone to speak up and share what they see. This culture must be reinforced daily—in how 1-on-1s and larger meetings happen, in what is said in which Slack threads, in how questions are asked and answered. The lifeblood of this culture is people who model brave behavior, sharing the important details early and often.

It’s so tempting to paint the pretty picture of what’s going on in our little neck of the woods, to assume that “nothing to see here” is the right, safe message.

Picture, instead, the power of describing the salient details, the bits that only you know, and partnering to connect that up with the whole.

Only together can we see the whole elephant.

The problem with skipping Tuesday

Hopefully you noticed by now that I publish this blog once a week every Tuesday.

Except for last week: I got back from my first big international trip post-COVID, and returned to such a mountain of work + jetlag that I didn’t put up the post that I’d written. I wanted to give it another turn, and I was shot by the end of the day on Monday.

Of course the week stayed busy, and then it was a holiday in the US yesterday, so again, no post. And, since I schedule all my meetings on Tuesday, Wednesday and Thursday, I’ve got very limited quiet time until the end of the week.

From where I’m standing, I can see how easy it would be to let another week go by.

And, in the tradition of If You Give a Mouse a Cookie, pretty soon one thing leads to another…

I think people often confused routine and discipline, and the role that they play in long term projects and how we structure our days.

Discipline by itself is awfully hard: doing all the mental work of deciding to do a difficult task, prioritizing that task, fighting through the resistance, and getting the job done.

Phew.

Whereas routine is a lot easier: discipline is involved, but it is simply the discipline of walking a well-worn path.

That’s much, much easier.

Until next Tuesday.

 

The Three Jobs of Any Leader

If you are a senior person in an organization, you have, at most, three jobs.

  1. Make decisions
  2. Make the people around you better
  3. Do stuff

Make Decisions

Seth argues that this is our most important job, and I agree with him.

In an information economy, decision-making happens constantly: the decision about what to do with the next hour of our time; about whether we’ll serve this customer or that one; about whether our product needs this new feature or that one.

The act choosing of whether we’re doing A or B, whether we’re going here or there, creates forward momentum.

And yet, most people, regardless of their role, avoid making decisions. Making decisions means being willing to take a position, to put ourselves on the line, to have a point of view. Terrifying indeed. Because of this fear, decision-makers are few and far between.

This means that no matter our organizational structure, anyone who regularly chooses to make decisions is a positive outlier with outsized influence on our direction of travel.

Making decisions quickly, and often with less information than we feel like we need, defines a culture that doesn’t have time to waste, because the work is both important and urgent.

And, like all things, the more often we – individually or collectively – make decisions, the better we’ll get at it.

Make the people around you better

Whether defining culture, cheering people on, removing roadblocks, coaching, or empowering others, the highest-leverage job we have is to find great people, bring them into our organization, and do everything we can to help them succeed.

The ability to attract the best people is a superpower. Talent attracts talent, and great attitude is the ultimate multiplier.

If we’re lucky enough to have great people, our main daily obsession, beyond making decisions, is to create an environment in which they can do their best work.

This starts with tons of communication: describing, over and over again, our ‘why;’ articulating where we are heading; making it as easy as possible for people to connect the dots between what they are doing and the big picture.

It requires individualized coaching and mentorship: skillfully deploying situational leadership so that our team has the right balance between supportive and directive oversight, so that their skills and autonomy develop over time.

And, ultimately, it is about standing side-by-side with people as they chart their path and, in so doing, move your whole organization forward.

Doing Things

This comes last on the list, and it may even fall off the list over time.

This might be counter-intuitive. How could “doing things” not be important, especially for your most senior people?

It’s true that most senior people became senior people because of their exceptional ability to do stuff: analyzing, building, visioning, strategizing, organizing, selling, and executing are the foundational skills that got us where we are today.

And yet, deploying these skills is often a low-leverage activity.

At worst, a leader who only ‘does stuff’ might be hiding from her two more important jobs of deciding things and making others better.

And, hiding aside, the act of “doing” too much runs the risk of creating dependency on this leader to do these important tasks.

Our success as leaders in organization, then, requires three things of us:

  1. Making decisions, as well and we can and as quickly as we can
  2. Helping others thrive, and diving into this work every day
  3. Leaving a small space for the jobs that we are uniquely suited to do….and then consistently, actively, giving those jobs to others over time.

Many Doors

Part of the experience of getting older is physical change. Whether injury or illness, our bodies react differently than they used to, often showing less resilience. Often, these changes present new, frustrating limitations.

These setbacks are challenging. They require us to give things up, to change our routines, sometimes to recast our self-image.

And it is natural to experience many of these changes as one-way doors: “I used to be able to do this, now I can only do this.”

If we’re lucky, and if we commit to rest and recovery, they are, in fact, two-way doors: “right now, I can no longer do this, but I will be able to come back through this door in a few months’ time.”

We can have the same experience when we learn something about ourselves. Imagine a colleague says something that really hits home—a new truth about how she experiences you. Have you just walked through:

  • A one-way door. “I am (or am not) the type of person who is good at _______. End of story.”
  • A door that swings both ways. “I have learned that I am (or am not) not currently the kind of person who is good at _____, and I’m going to use that information to do _____ so that this will change over time.
  • Two doors: “I have learned that this is (is not) my strength, and I’m worse at (better at) this other thing. So I’m going to choose to do more of this and less of that.”
  • Multiple doors: “I have learned this new thing about myself, so I’m going to walk through this other door for a while, and maybe come back here later. And, lo and behold, at the other side of this door there’s a whole new series of doors, and…”

The analogies, and the opportunities, begin to multiply.

While this is easy to embrace analytically, feeling it in our gut sometimes takes a bit more work.

Whether a physical change we don’t like, or a hard truth we didn’t want to hear, the biggest risk is that we mistake something that is true now for something that is simply true.

That incorrect conclusion will shape our actions, turning something temporary into something permanent.

“True” almost always means “true right now.” And “now” is different from “later” because of how we respond to the new information.

Ideal Conditions

The experience is familiar: we’re interacting with a piece of software, and it’s clear that the developer didn’t contemplate a wide-enough set of use cases. The result is that the thing we’re trying to get done is hard/impossible to do, and we end up frustrated.

This same thing happens to us as we try to develop new skills and responses: when these new approaches and aptitudes are nascent, we can, at best, deploy them only under ideal conditions.

For example, we may be working on listening harder and responding more slowly and less defensively in the face of criticism.

At the outset, we’ll succeed in doing this only with our coach or our most sensitive and constructive colleague. When someone shows up with too little care, or even aggressively, we’ll revert to our old behaviors

This example help us to add an axis to how we think about skill development.

The more obvious axis describes our overall skillfulness, and it ranges from:

  • (Self) awareness: we can clearly see the gap between our current behavior / skill and our desired behavior / skill
  • Nascent: we show the first signs of being able to deploy the skill
  • Strong
  • Expert

The additional axis contemplates the situations in which we can deploy the skill, which is a window into our skill resilience:

  • None: we can never deploy the skill
  • Highly curated: we can only deploy the skill in ideal circumstances
  • Most: we can often deploy the skill
  • All: we can always deploy the skill

The first axis is the axis of skill development, and the second is of skill resilience.

While they are naturally correlated, they are not one and the same thing. Most important, it is easy to confuse lack of skill resilience with lack of skill development: for example, we might have strong skills but not be adept yet at deploying them in varied contexts, and we might mistakenly use this data to mis-diagnose ourselves as having made too-little progress.

Often, the resilience axis has roots in the things that trigger us — a trigger is something that gets us off our game. Exploring our triggers for any set of skills/situations often leads to more universal insights, and is the first step towards moving us from Ideal Conditions to All Conditions across the board.

Some Days

Many days, when you’re convinced that you just can’t get it done, that’s not the case.

Instead of debating with yourself, push past the resistance, sit down in your chair, and begin. Then see what happens.

And some days, you just can’t.

Something happens, internally or externally, that is outside the bounds of normal and outside of your ability to stretch. It’s just not happening.

On these days, you give yourself a pass. You forgive yourself generously. You recognize that discipline is one thing, but that you’re still human.

Go and get some rest, give yourself a chance to recover, and start again tomorrow.