by Jake Block
“The tendency for a continuing application of effort or skill toward a particular project or goal to decline in effectiveness after a certain level of result has been achieved.”
This is a basic principle in economics and in a nutshell tells us that throwing resources at something isn’t always the answer to productivity and growth. “Ceteris paribus, collocationes declinet in efficacia.” (All things being equal, investments decline in effectiveness.) You get less bang for your buck.
I’ve applied this to various business models, and have found it to be an effective tool in managing costs and a good indicator of when it is time to “get rid of the dog” and move on, allowing someone else to see what they can do with the business, but protecting your assets to apply to a project with a greater chance of success. And you’ll find that quite often these “laws” that we have in business and in math and in science also apply to life as well. One can look at one’s intellectual and emotional resources much the same as his cash resources, but in a different form of currency.
As people we are like millions and billions of tiny countries, each with our own monetary system. Here in the Kingdom of Jake, we use Jakian Dollars. Now, Jakian Dollars are good, strong dollars that I can use to invest in others, or I can save to do other things with. If I want to do business with you, you have a choice. You can either accept the transaction in Jakian Dollars, be it for friendship, for services or for advice, or as your own little country, you can negotiate for another form of currency. Let’s call it the Sectarian Mark.
In the Realm of the Sectarians, the Sectarian Mark is a good, strong currency, and like the Jakian Dollar, can be used as exchange for goods and services. A deal is made and the Kingdom of Jake and the Realm of Sectarians agree to trade equal for equal in value. My time, support and intellectual input for their time, support and intellectual input. Quid pro quo (this for that). It’s a fair and equitable exchange and the crowds all cheer HUZZAH!!!!
This same kind of commitment is made between people every day. They agree to support and enrich each other’s lives, sometimes with little more than a smile or a handshake. They assume that their dollars and Marks or Zlotkys or Fazoozas are all equal and each will contribute equally to the wellbeing of the other. It’s a great system. It works.
Now, we come to a different transaction, where one feels that their little country is interested in another. They share some commonalities, and those are good, but there are other things that country A has that country B might be lacking in, and country B wants to make a deal to take some of country A’s assets (be they physical or emotional), but country A sees that what country B has to offer is less than they feel their assets, either in time, energy or emotional support is worth.
In this case, one party feels that there is no equity in the exchange, so they feel that in order for them to honor the request of the other, they will need something added to their side of the bargain to make it more fair and balanced. For example, my country has a large supply of grain and your country barely produces enough for the needs of your ever growing population. You want my grain… thanks, pal! WHOA, bucko… I appreciate being appreciated, and while I LIKE you, I have to ask, “What’s in it for ME?” You want my grain… I worked for it. It has value and I need that value to be met in one way or another. In essence we ask, “who stands to gain from this transaction?”
As individuals we all have the right to determine our personal currency for emotional, intellectual or materiel support of another, be it in kind or in services, but no one gives for free. It doesn’t happen. If you go to the bank and you take the check, you pay interest and you thereby support the dealings and growth of the bank. And like it or not, the bank then has an interest in YOU… you owe. You pay them back and the deal is over… you regain that amount of autonomy you surrendered in the economic exchange. Same thing applies in interpersonal reactions. In investing my time and my intellectual or emotional capital in YOU, I will naturally expect something in return, either in YOUR intellectual or emotional support, or if you are unable to provide that… perhaps in loyalty or in some other method of reciprocal support.
Now… the law of diminishing returns. There comes a time when we can invest in someone or something and support that entity to the best of our ability, but things change. They begin to need more and more of our intellectual, emotional or time assets, but we see less and less in return for that investment. You can try to get things back on track and use your leverage to suggest ways to change this situation that could be mutually beneficial. You can look to see the weaknesses in a friendship or cooperative exchange that are somehow inequitable. You can even make your displeasure known… tough love. But if things remain the same, the inequity you feel will continue and the dissatisfaction with the partnership will eventually fester and cause its demise.
The key to mastering the Law of Diminished Returns in business and in people is to learn to recognize the tipping point at which things fall into negative gain. Mostly it’s a gut feel, but the gut feeling is there for a reason, part of an ancient “cybernetic response system” that is a holdover from, and a throwback, to times when our senses needed to be keener and our self defense shields always up. Todays threats are seldom as deadly, but can be financially and emotionally devastating if left unchecked. And I know the feeling that one gets when you realize that it’s time to cut your losses, because we all hate to think that we have wasted our time and/or energies on a person or project we felt such hope for, but realities have to prevail.
I once bought a stock called the WWW.FUND when the internet was just taking off, and I sunk a thousand dollars into it, because like most people I could see that the internet was going to boom, and there could be a lot of money to be made on this type of fund. Well… my stocks DOUBLED in three days. Not bad. So I sunk in another grand and watched as the stock prices slowly slipped away with the dreaded insolvency level getting ever closer. But I held out hope… and the prices dropped. I figured, just another two days. I probably could have gotten more bang for my buck in Reno. The moral… invest in whatever you feel is right, but don’t be a sucker, and don’t let them take you down with them when the thing or person you supported goes bankrupt.
When the returns on any investment show steady decline and nothing changes to turn that around, chances are, it’s a sinking ship. Wish them well and protect your emotional or financial assets. Be there with a shoulder to cry on if you have to, but at least you’ll still have it after the fall.
by Jake Block
There are times that weaken our spirits and urge us to throw away all that we have felt was worthy of our devotion. Almost instinctively, we feel that the way we live our life is somehow to blame when we fail…and we all fail…yet, in the long run, even failures can be positive.
A wise person once told me that we learn nothing from our triumphs, only our mistakes. Therefore, we should learn to love our mistakes as much as our victories, for only through them is true wisdom gained. Well, she is wise, but I don’t know if I can totally buy her theory. I’ve had some incredible highs in my life, and some lows that were pretty incredible as well. I would like to think that I learned something from each…although the stronger of the lessons might well have come from trauma.
Pain is a great motivator and teacher. It motivates you to get out of situations that can hold you back and stifle your creative energies. We all get into them…a bad job, a bad relationship, one-sided friendships and business deals from hell. Given the natural tendency for time to warp situations, most things work themselves out in the long run. But there are times when we are so enmeshed in the drama of our own lives and entangled in the webs of the lives of others that time’s therapeutic power is thwarted. Against all sense and against all sanity, we plunge ourselves again and again into psychological and emotional situations that we know in our hearts can only lead to more of the same. Eternal optimists, we think that we can somehow make things different and affect a change for the better.
I’ve had some bad jobs and have always managed to make the best of them. I was a hospital orderly and cleaned delivery rooms when I was 16. After that, working in the dark, sweaty, and rat-attended spaghetti factory seemed like a promotion. I worked as a janitor in a strip joint in St. Louis. The pay wasn’t too good, but the fringe benefits were awesome (would you believe free popcorn?) But if you really want to see the seamier side of life, try working as a Motel 6 desk clerk in a blighted inner-city. Here was an education that will stay with me forever…believe me. Compartmentalization allows me to deal with it, and whenever I get PMS (Poor Me Syndrome) I pop open one of those “Motel 6 files,” and I know that there places where the grass is a yellower shade of green than wherever I might be at the time!
You might say that I made mistakes in taking bad jobs. Mostly, I worked where and when I could to keep body and soul together. I needed to provide for myself, and an honest dollar is, to my mind, honest pay. I had the chance to make money in less honorable ways, as do most people, and I would be lying to you if I told you that I didn’t think about it when half a cheese sandwich stood between me and a can of cat food (which you can take from me isn’t half bad if it’s all you have), but something inside told me to stick with it. It could be worse. Sometimes it was. But after a while, it got better.
Things can’t get better unless you allow them to. Simple as that. I know people who bemoan their existence as a total waste of life and wallow in the depths of their despair like a fakir in a viper pit, and think of it as some sort of noble penance for past lives and past deeds. They watch life slip through their fingers because they don’t understand that they don’t deserve to have tough times…it’s just their turn!
I’m often reminded of the joke about the man who lost his job and moaned, “Oh Lord, why me?”
His car was towed away and he moaned, “Oh Lord, why me?”
He took the bus and found his home ablaze. He cried, “Oh Lord, why me?
A deep voice from above boomed, “Some people just piss me off!”
However you perceive him/her to be, it’s certain that god has a sense of humor. Just look around you. But then, it’s just as certain that there are days when god’s in a snit as well. Sooner or later, it’s going to be “your turn in the barrel,” and all you really can do is smile through the good times and bolster your reserves for the hard times that surely will come.
A popular book told us that “Bad Things Happen To Good People.” Not earth shaking news. Anyone who has had a life knows the routine by rote! Good things happen to bad people as well…a cosmic Yin/Yang that is repeated a million times a day. It’s not that anyone is any better than anyone else. Like the bumper sticker says, “Shit Happens.” It could happen to me or to you…then again, we could be left blissfully unscathed by the traumas of life. “You roll the bones and take your chances.”
The trick is not to get caught up in the whole “karma” shtick. When things go wrong, as they sometimes do, it’s very easy to link incidences of “bad luck.” We begin to think that perhaps this is some cosmic payback for some deed we’ve done (and we’ve all done things we aren’t particularly proud of.) But look at it logically. Things happen. If it isn’t happening to you, it could be happening to me…and like you though I may, I would rather have my days in the sun while they last.
Tragic indeed are those who allow themselves to become stuck in the muck and mire of self doubt and self pity. There are people that I know who have had a run of bad luck and have given up. They carry that stint of trouble around their necks like an albatross, always ready to justify their failures with the past. “Why try? We tried once and failed.” Why try indeed?
It’s a statistical fact that Babe Ruth held the world’s record for home runs. That’s a proud feat. But it’s also a statistical fact that the man who held the strikeout record at the same time was that same man. Why? You don’t get a “homer” unless you swing at the ball. He tried. Sometimes he failed. Sometimes he swung so hard at the ball that he twisted himself into the dirt at home plate. So what did he do? He got back up, dusted himself off and took another shot at it.
It’s not an isolated story. From Babe Ruth to Orville and Wilbur Wright, to Thomas Edison, and all the way to Donald Trump, winners win because they know what it takes to win…and they know the bitter taste of defeat. They know that to win, you have to try. That’s the hard part. Losing is easy. Just ask anyone who’s lost for lack of trying. They can give you a million reasons why they failed…seldom will that list include their own deficiencies. But it should, in glaring letters, right at the top. Like I said, the shame isn’t in failing, but in failing to try.
We as a society have found that the path of least resistance is often the shortest way between two points. Those who’ve lived near the “Mighty Mississippi” know that as well. Every so often it decides that it’s just tired of meandering through the heartland and decides to go from point A to point B via the most direct route. It’s a real headache for the lives of the thousands that she devastates in her impatience to reach the sea. People are like that as well sometimes. When their lives become stagnant and less than they would like them to be, they try the path of least resistance, causing havoc in the lives of others and throwing their own further off kilter at the same time.
Those of us who’ve been around the block once or twice know that, in metaphor, the shortest distance between two points is seldom a “straight line,” rather a series of twists and turns that eventually gets you to where you want to be. What today seems success may one day seem like a plateau in life, and a good life well lived is a series of plateaus reaching ever higher.
I remember as a kids that we considered “success” being able to find a job — any job — to make enough money to move out of E. St. Louis and into St. Louis. To our mind, that was the place to be. Now, decades later, I’ve been around the world a couple of times, and St. Louis is no longer first on my list of places to live…in fact, it’s slipped off of the list. I’ve seen Chicago…and New York, and Paris…Istanbul was a wonderful city, as is San Francisco. I can afford to live just about in whatever city I choose, but I live in a relatively small city and feel just fine…success for me now has a somewhat different meaning. And as I write, even that is beginning to change…age and situation change expectations. Time and circumstances dictate life’s choices.
The late Reverend Robert Schuler said, “Tough times seldom last. Tough people do.” While I never thought I would hear myself say it, I’d have to agree with him on this one. The gambler in me knows that the deck sometimes runs cold and, given time, a favorable shuffle, and the financial wherewithal to hold out, fortune will often shine again.
Tough times are like that. Given time, a favorable shuffle and the guts to stick it out, things will usually get better. Life is flux and flow like the tides and the sea. Even the highest promontory can be brought down by the erosion of tide. It’s the wise beach-dweller who keeps a dingy next to the car in the garage.