Forgive me, this is a bit of a rant. In the interest of savings those of you who don’t want to read as much as I want to write, we will Tarantino it. The thought is this:
There are people that are content with precedent and status quo. These people work at bowling ball companies. Then there are those people that are focused on improvement, new ideas, and forward momentum. It is these people that change the world.
It is my belief that people who are passionate about what they do are more likely to do the changing. For these people, their passion mitigates the apparent risk associated with newness and change. Why? Because they receive some benefit beyond the end payout – they benefit from the experience in and of itself.
For those of you whose time is less valuable and want to read the entire story, here is the James Cameron Version. It starts with a guest speaker I had in a class at my MBA program, and it ends with a story about a big idea.
The speaker began by saying he wanted to talk to us about how to achieve success in business and he started with his own career path. Inspired by John F. Kennedy, he got his law degree, intending to use it in government to implement changes. He found government to be wasteful and bureaucratic; a place that needed changes, not one that fostered them. Deciding that he was not the one to implement these changes, he moved into corporate law. Finding this un-inspirational, he decided he would go to the source of the money – why get paid by businesses for legal council when you could be in business paying others?
Let’s examine. So far his error is this: chasing money rather than pursing action behind money. I am a firm believer that you can’t win without true passion for what you are doing.
Passion for your work will get you money, passion for money gets you work.
And that’s what he got: work, boring work, at a bowling ball manufacturer. He could sense our disappointment with his anticlimactic career path and quickly launched a defense. As he put it, “you can’t all work for Apple and Microsoft.” He offered this advice as we judged the un-sexiness of his career, “Stay away from the big idea,”
His logic was this: big ideas have a binary outcome, they either fail or make it. If your idea fails, you’re on the chopping block. If your idea works, everyone will want part of the credit and your boss probably won’t even recognize you for it. What he’s done here is assume that a binary outcome means a binary payoff. He has failed to account for any enjoyment or net self-improvement as a result of the experience. Instead, he suggested the most efficient way to climb the ladder was to do the small things right, show up on time, get the numbers right and dress well.
He followed this with an interesting side story. While at the bowling ball company, he had the opportunity to interview for a job as CFO for a small yet growing company called Microsoft. He had read in an article that Bill Gates’s girlfriend thought he had poor hygiene. He didn’t want to work for someone with bad hygiene because he didn’t think someone who didn’t pay attention to their appearance could pay attention to bigger things.* Bigger things like establishing one of the biggest most influential companies of the century. This was meant as a light-hearted story that demonstrated his adherence to principles. It wound up being a story that showed how his risk aversion cost him millions of dollars and a job he wouldn’t have to defend to anyone.
In short, his method of achieving success was persistent mediocrity. While he was busy working for a paycheck and avoiding risk, big ideas were happening all over the place. One of those big ideas involved ice, which is the second part of my point.
In another class the following day, a professor told us the story of one Nils Bergqvist. Nils liked to ski. He got a job in northern Sweden with a mining company so that he could ski during the winter. He didn’t like the job, it was boring, but he kept skiing, and acquired a new hobby, whitewater rafting. He began taking people down the rivers to pay for his hobby. He started taking so many people down that he bought some rafts and started a guiding company. But, he needed something to do during the winter when it was dark all day and no one wanted to be that far north.
He decided that he wanted to share the beauty of the Northern Lights with people. He met a Japanese businessman and after talking with him, Japanese tourist began visiting, and he visited Japan. While there, he saw ice sculptures around his hotel. He asked around about artists and decided to form a workshop and festival in Sweden for ice carvers to display their work. It rained. As the sculptures melted, Nils had this to say, “We tried to preserve something that belonged to nature. Let it be destroyed and make something new when it is destroyed.” And something new is exactly what they made.
The following winter Nils got the group of artists to construct a hotel entirely of ice in the Arctic Circle. That was his big idea, a hotel of ice. And it didn’t cost him any money since the artists were excited to do it. The hotel was huge (literally and figuratively). People eventually had to signup years ahead of time to spend a night wrapped in animal furs in the frigid ice beds. He tried to form a marketing partnership with Absolute Vodka, after all, patrons needed vodka to keep warm during their stay. His attempts to contact Absolute were ignored again and again, so he took more risks. He started to carve Absolute bottles into the hotel’s doorways and Absolute logos into the bar. If they got a cease and desist, he reasoned, they would just melt the offending shapes away. When pictures of the hotel started circulating with the Absolute logo in them, the head of marketing at Absolute called Nils. “Are we part of this?” he asked. “You should be” was Nils’ response.
Absolute now has ice bars all over the world, made entirely of ice, kept below freezing. People pay large cover fees to dawn large parkas, drink absolute from ice glasses and lick the walls. And who supplies the ice glasses made from the frozen rivers of northern Sweden? Nils does, and it’s good business, a multimillion-dollar business.
So, too many pages later, what’s the point? The lesson in opportunity cost is this: if you are one of the black suits, if you are a big wimpy risk hater, the opportunity cost of your choice is that you won’t ever think of an ice hotel because you are guided by money, not passion. You won’t be interesting, you will work harder, not smarter and no one will remember you. When someone presents you with a new idea, you’ll run the numbers, you will conclude that it’s too much of a risk, that there isn’t enough information, that the returns don’t justify the investment. You will sacrifice large yet volatile returns for small predictable ones. But, as any finance specialist will tell you, in the long run, more risk yields higher rates of return.
We can’t all work for Apple or Microsoft, but we can all work on something that we are passionate about. This passion mitigates risk and can lead you to undertake endeavors that go on to change the world. They won’t all work out, but in the end the net benefit will be greater than the slow progression to mediocrity.
*Note the payoff for the girlfriend not discarding him for poor personal hygiene.
Tags: Ashleigh Williams, ice hotel, Jonathan Williams, opportunity costs
