Why New Strategies Come Up Short

Someone had the idea to install a high-end Dyson hand drier in this bathroom. It’s more efficient, cleaner, and will decrease paper waste. It is, quite simply, a better mousetrap.


Except that the paper towels dispenser wasn’t removed. Maybe there was a good reason to do this, and maybe there wasn’t, but either way, it’s before noon and the  paper towel waste bin is overflowing. The new device, the new approach, is being undermined because no one had the guts to say “and we’re going to stop doing the old thing too.”

Strategy is about making choices.

Most of the time, our new strategies come up short not because we don’t have enough good new ideas, but because we’re scared to let go of the old ones. We are unwilling to stop doing the things that are comfortable that got us here–they feel like they form our identity, there are people who are accustomed to doing those old jobs, so let’s have our strategy be “in addition to” everything else rather than “instead of.”

That all sounds plausible enough, but the truth is we’ll never get to the other side of the pool if we keep clinging to the edge over here.

Maybe You Should Focus on This

I notice this all the time with my kids.

I can’t solve problems for them.

Often, as they get older, they don’t even want my help any more.

But sometimes, just sometimes, I can say, “I think focusing on this part will make a big difference.”

And it does.

Because they have the skills. That’s not the problem.

Some of the time I can help them with diagnosis: how to apply their skills to this problem.

But most of the time it’s not even that. They have all the tools, it’s just that it feels uncomfortable–to them, to to anyone–to stick with and prioritize the hard bits.

As bosses and colleagues, as coaches and spouses and friends, we don’t need to have all the answers. Even if we had them, that wouldn’t matter, because they’d be our answers, not someone else’s.

What we do need to do is to listen attentively, to pay close attention, and, occasionally, by reflecting on our own experience, context and perspective, suggest a slightly different focus: a new lens through which to see a situation, a rejiggering of what could be at the very top of the list.

We shouldn’t be in the solutions-giving business. The answers we can provide are rarely just right, and, even if they were, it’s disempowering when an answer comes from someone other than the person facing the challenge.

But helping people channel their energy in the right way—that’s a great way to partner.

The Difference Between Discomfort and Injury

Every athlete knows that aches and pains are part of the process. Especially as we get older, something always hurts a bit.

The challenge is distinguishing between aches and injuries.

For an ache, the best approach is to continue to work the area to promote healing. Usually a slightly different activity is best, but, counter-intuitively, healing happens faster through more use of the affected area. This increases blood flow and stretches and strengthens the supporting muscles and tendons.

Injuries, on the other hand, require rest. We suspend activity, ice the area, maybe immobilize it until it stabilizes and is ready to be built up again.

These truths apply to our mind and hearts, not just to our bodies.

When we are challenged emotionally, when we take what feels like a professional risk and fall short, we often misdiagnose the difference between discomfort and injury. Any blow – in the form of embarrassment, a critique, a sale we didn’t close, a displeased client – hurts our ego.

It can feel like an injury, but it’s usually just discomfort.

If we allow ourselves the mistake of bandaging up and immobilizing that new muscle that we’ve just used the first time, healing will take forever.

What this new muscle really needs is more work and more effort, so it can be strengthened.

The Purpose of Capital by Jed Emerson

Late last year, I was having breakfast with Jed Emerson in a noisy restaurant on the East Side of Manhattan.

I asked him what he had been up to lately and he smiled, paused meaningfully, and plunged under the table. He pulled out a massive manuscript and thudded it in front of him, nudging aside a small collection of plates, coffee and cutlery.

“This,” he said. “This is what I’ve been working on for the last three years.”

It was a few weeks before Jed’s new book, The Purpose of Capital, was published. When I read the book I realized that it is not just the product of three years of work, it is a life’s work.

For those of you who don’t know Jed, he has for decades been a leading thinker in impact investing (he coined the term Social Return on Investing, or SROI), and he advises many individual and institutional impact investors about their strategies. The decades he’s spent discussing how to deploy hundreds of millions of dollars  to create social impact have given Jed a rare view into the strengths and limits of our current paradigms of deploying capital for impact.

Ultimately, this experience has led Jed to ask some fundamental questions about what it is that we are trying to do here.

Even if you’re not familiar with the phrase “impact investing,” what Jed has to say might interest you. He is asking where the assumptions of our current financial system came from, and why we take them as a given.

Unfortunately, such broad and deep questions defy a pithy summary—so I won’t attempt one. The good news is that questions this big shouldn’t be addressed in just a few paragraphs since, borrowing from Jed’s quote of Peter Orner’s, part of the problem of modernity is that we are living through “an epidemic of glib conclusions” about the answers to the most basic and important questions.

The biggest problem, according to Jed, is that we think we’ve answered the big questions underlying our work. In Jed’s words:

A central issue for many of us in impact investing is that we are operating within an assumption we’ve answered the question, Why?…

The question of why we are investing….is rapidly answered with an interchangeable set of seemingly self-evident answers:

  • To minimize negative impacts while creating positive impacts;
  • To do well and good;
  • To align money and mission;
  • To respond to climate change;
  • To advance a positive response to social/environmental challenges

These are not, in and of themselves, wrong answers. But they are light responses to what are fundamentally deep and profound questions of personal meaning and purpose. They are responses to the “why question” offered with a lower-case “w.” They are the easy responses one would expect from a first round level of conversation on the topic at a cocktail party…

[They are responses that let us] off the hook of accountability, slightly modifying our investment practices and capital allocation assumptions so we may think all the better of our selves and sleep more soundly….[knowing our capital] is proudly parading in the light of day, bringing good things to good people—including bringing good, clean profits to our own good selves.

The Purpose of Capital is the opposite of a cocktail party answer to this question, taking seriously the question of accountability for our actions.

The book digs deep into history and philosophy, touching on topics as varied as: where and why our society came up with the separation of Self and Other (in the Axial Age from 800-200BCE); the distinction between sacred and profane; the roles that Locke and Descartes had in laying the foundation for modern thinking; and the near-religious nature of our faith in modern capitalism (one of countless gems in the book, “That economists can’t measure any of their quantities even to their own satisfaction, can explain neither prices nor the rate of interest and cannot even agree what money is, reminds us that we deal here with belief not science.”)

While I admit that the depths of Jed’s inquiry led me occasionally to lose my bearings—if economics, the social contract, the pillars of capitalism, and dualism itself are called into question, you’re not left with much to stand on—I found deep wisdom in his pulling back the curtain on an important, unstated truth: there are some elements of capitalism that cannot be questioned lest one be called a heretic, and yet, if the system is fundamentally failing us, we have no choice but to leave no stone unturned.

Here’s Jed quoting historian John Reiger:

There is a firm belief in the moral benevolence of the free-market system and private property, combined with a common acceptance among liberal, neoliberal and neoclassical theorists that this is the only system that works. This system takes on quasi-divine and transcendent qualities when it begins to block any and all alternatives and challenges.

If we all, collectively and irrespective of where we stand on the political spectrum, have quasi-divine faith in market economics as morally benevolent (and I think that we do), then Jed is an intentional heretic. He calls upon “those who call themselves impact investors and social entrepreneurs [to]… recognize ourselves as members of a new Reformation. We are members of a happy heretical tribe advancing fundamental aspects of our central faith and creating new metrics to explore its implications.”


Like most important works, The Purpose of Capital tells us that we have been asking the wrong questions. It argues that impact investing is not simply a tweak or even a slow evolution of an existing system. It is, potentially, a full reboot of our current system and the orthodoxies that underpin it.

Yet that is not how impact investing is traditionally viewed. Indeed, in practice impact investing presents itself as a mere (and mild) extension of traditional investing, with the assumption that most of what “we” learned in business school and at investment banks applies.

As Jed states:

As impact investing continues to go mainstream, we now see a plethora of traditional investment strategies, tools and practices applied with even greater complexity in the name of impact, and a decreasing amount of innovation in how capital is structured to transfer the actual power of money to the objects of our influence.

Over generations we have come to embrace a notion that…the expert at navigating financial analysis and handling an investment tool knows best what the purpose of that tool is. In truth, tools are merely means to an end and nothing more.

Acumen, where I’ve worked for the last 12 years, wrote a manifesto six years ago, and one of its core tenets is to see “investing as a means, not an end.” This simply-stated inversion of means and end is a truly radical act, and I can say with confidence that it is no small feat to take a well-honed, sacred tool and say, “this is just a tool.”

Operationalizing this shift this is far beyond the scope of even this long blog post, but Jed at least gives us guideposts about what our underlying purpose might be:

Impact investing is, first and foremost, an exploration of the purpose of capital…[one that] seeks to lay the foundation for the emergence of new 21st Century forms of economics and capitalism…

Impact investing is also about mindful money that integrates the power of presence with considered intentionality within capital flows throughout the world. It places resources within new structures, pumping life-affirming blood into new organizations and corporate forms. Impact investing is about pursuing an array of related strategies that promise to optimize total performance of financial returns with the generation of social and environmental impacts. It is integrated impact, not disconnected from life, but life promotion, life affirming and life creating capital.

When understood at this level of purpose and meaning, those who continually question whether or how one may achieve ‘competitive’ or ‘market rate’ returns on impact capital are skating on the surface as opposed to delving into the greater possibilities of how we might optimize the total performance of capital in the fullest sense of the term.

Hopefully these excerpts have whetted your appetite for Jed’s book, which is available as a free ebook for download or as a hardcover on Amazon. It’s not a light read, but if you’re intrigued by some of the bigger questions, Jed’s book should be on your list. (Bonus: Jed just let me know that the book is being translated into Mandarin and he’ll be doing a book tour in mainland China this fall.)

Before wrapping up, I’ll share a few reflections on Jed’s core thesis.

First, I fully agree with Jed that we, the impact investing community, have let ourselves off the hook. We act like we know (and are living) the ‘why’ of impact investing. We don’t know the why, and we’re certainly not living it. Not yet.

I do believe we have the potential, as a community, for revolutionary change—if we have the stomach for it. Our job is to be willing to fundamentally question all the norms and rules given to us by traditional investing. While many of them might still be useful, none of them should be taken as a given. The criterion we must apply in examining each of these rules are: does this rule serve the change we hope to make in the world? That is, in most cases and for most investing ‘rules,’ a tricky question to answer.

In order to do this properly, I believe we, as impact investors, must understand much more than how to deploy capital and build companies: we must be from and deeply connected to the communities in which we deploy capital; we must be students of the history of social change; we must be willing to engage in conversations about what makes a good society; and we must be interested in looking in the mirror about our own privilege, biases and blind spots, and begin to engage in the slow, meaningful work of self-transformation. These are all new muscles, but necessary ones if we endeavor to make lasting positive change.

Second, while I firmly believe in the potential that Jed describes as the purpose of capital, I am left wondering about the seemingly-individual transformational focus of the book: my relation to my capital and my (and our) sense-making and meaning. That’s the right place to start, but what happens to these individuals, and their lone voice(s), as they move out of sync with a broader system?

Meaning: I agree that the first step is for each individual impact investor to have more fundamental conversations about the purpose of their capital. However, when they act alone and against the tide of the larger system (including the larger impact investing system), will they have the leverage to make meaningful change? If the locus of the changes they make are primarily: 1. Personal (their values and worldview); and 2. Strategic (how they deploy capital), does that run the risk of omitting the larger levers like norms, story, the rules of the game, what’s considered “standard” impact investing products, the metrics for social performance, and, ultimately, expectations for how the system operates as a whole? Jed’s book itself starts to bridge the gap between the individual and the system, by reframing the broader narrative about what we’re all doing here in the first place.

Finally, to take things a step further, I did find myself a bit surprised that impact investing seemed to be both the question and the answer in the book. For a book willing to be so radical, I was waiting for the moment that Jed would to look at the whole thing and say, “and even if we do all of this, it alone won’t be enough.”

If our fundamental problem is that we misunderstand our relationship to money, can a sufficient solution be recasting our relationship to money in the context of higher (personal and societal) meaning?

Perhaps I’ve been coming across Anand Giridharas’ Winners Take All: The Elite Charade of Changing the World too often, but it does echo in the in the background of this conversation. Anand’s thesis is that our current system of philanthropy and impact investing only exist to reinforce existing power dynamics. This makes them a generosity charade that undermines social justice. Anand challenges us to be willing to look at the fundamental power dynamics that created inequality of wealth and power in the first place: Jeff Bezos pledging $2 billion to fight homelessness is well-intended, but wouldn’t it make much more sense for Jeff to stop using Amazon’s clout to avoid local taxation and to fight zoning laws that make housing unaffordable in Seattle?

Knowing Jed, who has a much longer and deeper background in social justice than I do, I expected him to conclude that that better deployment of capital by the few is but a small part in the much bigger reboot of capitalism that we need to create a more just and inclusive world. That, at least, is where I’d like to see the conversation go from here.

Flexing Just One Muscle

Weight lifter straining and Coralie Camilli
Images courtesy of http://aikdojournal.com and http://pleated-jeans.com

You’ve probably seen weight lifters (or folks at the gym), and what their face looks like on that last repetition: veins popping out of their foreheads, everything shaking and straining, as if the muscles in the face are somehow exerting force on the bar they’re trying to lift.

The face of a martial artist, on the other hand, is calm. The muscles she uses, the momentum she creates, are limited to what is needed to produce the desired force. There’s no spillover, nothing is wasted.

The same thing happens to us emotionally.

When we find ourselves under pressure, or provoked, or in a period when the stakes are high, we act as if we need to flex all our emotional muscles: we bark orders at the people around us, we replay conversations in our head, we cannot sleep.

This overflow of emotion, and the resulting unproductive behaviors, is repetitive and exhausting. It’s not just that it doesn’t help us, it actively wears us down.

It can feel impossible to stop acting like a weight-lifter with our emotions: that first wave of emotions triggers more emotions which trigger more… soon enough, metaphorical veins are popping out of our heads, and the anxiety, frustration, and fear all feel so real.

But, once we’ve felt all of these feelings, we do have the option of letting them go.

It’s not easy, but perhaps it helps to remember: my job at this moment is to do less.

Practicing when the stakes are lower is another good place to start.

Reclaiming Monday Mornings

I’m a big believer in weekends.

Rest, recovery and unplugging allow us to clear our minds of the dross and stress of the previous week. If we truly let ourselves recharge, we find ourselves with both more energy and creativity on Monday mornings.

However, work still happens on the weekend: emails still arrive, questions need to be answered, calendars get shifted around, Slack channels come alive.

It’s tempting to wake up Monday morning and see this influx as a weedy undergrowth that needs to be hacked away immediately. With this mentality, we choose to start our Monday morning with a few hours of routine, mindless tasks.

A great trade is to find just one hour over the weekend for simple, menial work: delete spam and respond to spam-like work messages; check over to do lists for the week and add/delete items; look at and adjust calendars. These tasks carry a light mental load and ticking them off lets us start the week calmer and more grounded because we are on our front foot.

Then, the payoff: use the first two hours of Monday morning for something creative, important, scary, or fun. Maybe it’s a project you’ve been putting off, or it’s one you’ve not yet discovered. Perhaps its lying hidden on a blank sheet of paper, waiting for you to find it.

This small, stolen hour of catch-up work can recast Monday mornings: instead of “here we go again” we start the week with “finally, a few precious hours to do important work before I get sucked into the week.”

That’s Right!

A classmate of mind in graduate school earned himself the nickname, “Yes, but…” He could disagree with anything, and he would happily voice that disagreement.

It’s easy to fall into this trap, to only verbalize when you have a critique to make.

No stranger to this mistake, for many years I was most comfortable speaking up when I saw a fault in someone’s logic, a gap in a plan, or when I had a new idea that I thought was a better solution.

I thought I was helping. I thought I was moving the group towards a better outcome, and that it made sense to speak up with my ‘yes, buts’ and to otherwise keep quiet.

Not surprisingly, I was part of the problem.

To build great teams that come up with great solutions, we should spend most of our time verbalizing specific, heartfelt positive comments. In fact, on the best-performing teams, the ratio of positive to negative comments is a whopping 5.6 to 1. (Incidentally, the same goes for marriages: the ones most likely to stay together have the same 5 to 1 positive-to-negative comment ratio). For the worst-performing teams, the ratio is an abysmal 0.36 to 1.

Why is expressing positivity so important for team performance?

First, because it cultivates an environment of trust and motivation. Let’s remember that most of us, most of the time, are our own worst critics: we barrage ourselves with the echoes of our negative internal narrative. So, each external critique serves to amplify this narrative, while each compliment is muffled by it.

This is why what looks like an environment full of “helpful suggestions” is really one in which the dial on criticism – of ourselves, of each other – is turned up all the way. In this sort of space, people stop taking risks and being willing to do things that might not work.

But wait, there’s more.

The ‘yes, but’ approach does more than undermine trust and chip away at bravery and confidence. It ends up hacking away at the roots of what people need when trying something new.

In areas in which we are not yet skilled, we literally do not know the difference between good and bad. It doesn’t matter if we’re trying to write an email in a new way, practice a new technique for closing a sale or learning to play the violin, at the beginning of steep learning curves (and all new micro-skills have their own steep learning curves), right and wrong action are, to the novice, nearly indistinguishable.

That’s what makes it so invaluable to say, “Yes! That! Do more of that, it was great!!” It both identifies the right, new behavior, making it much more likely to be repeated; and it reinforces that new right action will be rewarded, both intrinsically and extrinsically.

The good news is that there’s a monumentally easy fix for the ‘Yes, but’ rut.

Just say ‘Yes, and…’

Try saying that five times a day and you’re off to a good start.

Apologies for the Missing Spaces

Hi everyone.

You’ve probably noticed that a number of my recent posts are missing spaces between words.

WordPress has a new editor and it’s giving me trouble. I swear there are gremlins in there, because I reread all of my posts before I publish them and am pretty sure I would have noticed “Microsoft built itthat way” and “fabric of ourdays.”

I will try to get to the bottom of this.

In the meantime, thank you for your patience.

And if anyone is out there using the new WordPress editor and has a solution, please let me know.


We schedule 60-minute meetings because Microsoft built it that way.

It’s just one of defaults that make up the fabric of our days.

The time we go to bed and wake up.

When show up at work, and when we go home.

What we say when someone asks “how are you?”

How we decide if we’ll stop for conversation.

Who we look in the eye.

What we do in the elevator.

And in the car, the train, the subway.

How, when and what we eat.

The first thing we do when we open our laptops, or when we have a free moment, or after concentrating hard for 15 minutes.

The number of minutes (seconds) we allow ourselves for unstructured time just to think.

Feeling rushed.

Acting rushed.

What counts as “real work.”

How honest we are with our boss, and with ourselves.

These are all defaults we’ve developed. Some are intentional, many are unconscious.

Most of them served us well once and don’t any more.

Want to change your day, your health, your outlook, your productivity?

Start by changing a default.

(Including in Microsoft Office)

Brand New Ideas

None of your ideas is ‘brand new,’ not really.

Think of what it would mean to have a thought that no one has had before, ever.

It is, mathematically speaking, impossible.

Phew. Once we notice this, we can be duped into letting ourselves off the hook. If it’s all been said before (we tell ourselves) then no one needs to hear from us. Time to sit back, relax, and passively consume.

The problem with this story is what it imagines an idea to be: a formless, weightless thing that exists, objectively, somewhere out there.

This isn’t what ideas are at all. They are living things that take on meaning through the way they are expressed: their content, emotion, and form (the words, the medium, the imagery) all breathe unique life into them.

When we consume your idea, we take in all its indivisible parts: the idea is shaped by each irrefutably personal element you put on it. Only you could express this idea in this way, because there’s only one you.

This means that your job is not to tell us something we’ve never heard before. Your job is to tell us what this thing means to you, right now, in a way that is textured, imperfect and personal.

This allows us to understand what it means to us, right now, and why we might let it into our minds and our hearts, so that it can change us.