By Default
Default is our state of mind. We are surrounded by default decisions. Our birth is a state of default. The parents we get were by default, and most of our childhood friends were, too. It is only after we reach a certain age that we really start deciding who we want to be friends with and whom we don't. I could write in lengths about how our lives are filled with defaults, but you get it now. I completely understand why default is so important.
If we were to actively choose every aspect of our lives, we would be weighed down with so many decisions that our brains would explode.
Imagine if our breathing wasn't by default.
Well, let's just thank our body that it takes care of a lot of functions on its own. But, at times, one must consider whether default is truly the best option.
Michael Housman, the chief analytics officer at Cornerstone, has an amazing story around default. In his tenure he led a project to answer the question of why some of his customer service agents stayed in their jobs longer than others. His original theory was that people who hopped jobs often would quit as soon as things got hard, but they didn't. In fact, people who changed jobs frequently weren't any more likely to change jobs than those who were in the same job for 5 years.
Unsatisfied and intrigued by this revelation, Michael Housman started looking for other hints to answer his question. On the lookout for other facts, he noticed his team had captured information about which internet browsers were used by employees when they initially logged in to apply for their jobs. Whimsically, he decided to test that data on the browser used and see if it had any meaningful explanation. Surprisingly, the data revealed that employees who used Chrome or Firefox stayed in "their jobs 15% longer" than those who used Internet Explorer or Safari.
Believing it was a spurious correlation, he ran a few more tests on the data, which amazingly turned out to be more promising. Employees who used Chrome or Firefox were also "19% less likely to miss work than employees who used Internet Explorer and Safari."
The more he dug into the data, the more promising it got. Chrome and Firefox users had better sales and a better customer service rating, and overall, they were better employees for the company.
Amazed by these findings, Housman had to make sense of these revelations. And to make sure that all employees were measured on the same scale, he made employees take a computer proficiency test to rule out if some employees were more technologically savvy than the others. When the test revealed that it wasn't the case. The only other logical explanation was the act of downloading the browser.
At the time, Windows computers came pre-installed with Internet Explorer, and Macs came pre-installed with Safari. If a user had to use Chrome or Firefox, they actually had to go and download the software. And it turns out that this active effort, however small, is how they approached their job as well.
Employees who took such small steps to improve themselves also had a better attitude towards their customers. Unlike the ones who accepted the default state. These employees followed the standard operating procedure, worked the assigned number of hours, and eventually quit when they became dissatisfied with their jobs.
Accepting defaults comes with the risk of burnout. Because one essential stops thinking of anything creative or doing something that is required for the job to get done.
Knowingly or unknowingly, we all carry a default about money.
"I NEED MONEY TO BE HAPPY."
If you are one of those few people who does not carry this burden. Lucky You! But for the many people I have interacted with, having money is a necessary condition for being happy. It is an expression that is not questioned enough and is accepted as is.
I have the most fun when I am around people, I love being around rather than constantly running in the race for money.
Money is an essential thing, but it is not the only thing. And the attention it gets is definitely far more than it deserves.
You need a strong bond with your community to be happy. You need a few good friends to be happy. You need a partner you can trust to be happy. Having only money has made no one happy.
One can always live a happy life with little money and strong relationships. But it is hard for me to imagine someone being happy with a lot of money and no relationships.
Until next time…
I am on a mission to change the way people think about their money and Investments.