Leaders are placed under a tremendous amount of pressure to be relatable, human and … nice. Many yield to this instinct, because it feels much easier to be liked. Few people want to be the bad guy. But leaders are also expected to make the tough decisions that serve the company or the team’s best interests. Being too nice can be lazy, inefficient, irresponsible, and harmful to individuals and the organization.
I’ve seen this happen numerous times. A few years ago, a senior staff member of mine made the wrong hire. This can happen to anyone, and the best way to remedy the situation is to address it quickly. Despite my urging to cut the tie, this staff member kept trying to make it work. While I laud the instinct to coach, fast forward two months later, and we were undergoing a rancorous – and unnecessary – transition process. There’s a key lesson here for any leader. Nice is only good when it’s coupled with a rational perspective and the ability to make difficult choices.
Here are a few other other recognizable scenarios where being nice isn’t doing you – or anyone – any favors:
Turning to polite deception. You’ve been in these brainstorming meetings – everyone is trying to hack a particular problem, and someone with power raises a ridiculous idea. Instead of people addressing it honestly, brows furrow, heads nod like puppets on strings, and noncommittal murmurs go around. No one feels empowered to gently suggest why that particular idea won’t work. At my company, rejecting polite deception is a big part of how we do business. When something isn’t right, we call each other out on it respectfully, then and there, without delay. Why? It’s not helpful to foster an everyone-gets-a-trophy mentality; you have to earn the honors to get the honors.
The long linger. Sometimes a hire just won’t cut it in a certain role. It might seem easier to keep an employee in place rather than to resolve the mismatch – but it actually is not. Resist the temptation to prolong confrontation, to see if things will get better. It is more of a disservice to let someone flounder, especially when it’s clear that he or she just isn’t hitting the mark. Be kind and communicate clearly, but don’t be nice. Be surgical about it. Make the clean cut. Help the person transition somewhere he or she can succeed. Handling employee issues immediately helps your culture and productivity – over time, you’ll attract employees with similar values and convictions.
Don’t be a doormat. When you’re too nice – to suppliers who can’t deliver on time, to colleagues who don’t do their work, to customers who refuse to pay – you’re actually letting others take advantage of you and your business. When you’re overly generous with your allowances for others, you create a fertile atmosphere for contempt to spread. Imagine the reactions of your most talented, focused, and motivated employees as they watch lackluster coworkers get pass after pass. Anger and resentment take root, morale plummets, and turnover starts to go up, up, up. Think of how loyal customers will react if they see how easy it is for others to take advantage of your services. Your reputation will surely suffer. These problems become more difficult to solve as they pile up. You don’t need to be severe to be respected, but you do need to hold your organization to certain standards — and you must be firm about people meeting them. Setting rules will help you when decisive action is needed. No more delays, no demurring, no debating.
Failing the introspection test. Are you too nice to yourself? Introspection is a powerful leadership tool, but we often forget to use it. When you ask yourself what behaviors hold you and your team back, you can recalibrate your leadership style for the better. When you give employees the space to give you the hard truths, without fear of repercussion, you’ll get valuable perspective and make a giant leap forward in maturing as a leader.
Of course, this doesn’t mean managers get a free pass to be disrespectful, cruel, or a bully in the workplace. There’s a world of difference between being an effective leader with high expectations and dealing with problem after problem caused by milquetoast management. Beware of confusing being nice – or being liked – with being a good leader.
Two law schools said this month that they would begin accepting applicants who have not taken the Law School Admissions Test, a move that may help curb weak interest and plunging enrollments in law schools across the country. The State University of New York-Buffalo Law School and the University of Iowa College of Law said they would admit students from their respective undergraduate colleges based on their grade point average and scores on standardized tests other than the LSAT.
“Taking the LSAT is a pain, and it is expensive,” says James Gardner, dean of SUNY Buffalo’s law school. The test comes with a $170 fee, often in addition to months-long prep courses and tutoring that can cost thousands of dollars. “This is just a way to identify strong-performing students based on perfectly rational criteria that don’t involve the LSAT,” Gardner says.
He acknowledges, however, that the change might be a lifeline to law schools, which have lately been suffering from a persistent lack of bodies. “It does address that problem to the extent that they remove what is, for some students, an obstacle for applying to law school,” says Gardner. In 2014, first-year enrollment at U.S. law schools fell to about 38,000, its lowest point in four decades, down 28 percent since it peaked in 2010. First-year enrollments have declined by around 20 percent since 2011 at both SUNY Buffalo and the University of Iowa.
The two schools are the first to announce that they’ve taken advantage of a recent ruling by the American Bar Association, which accredits U.S. law schools. In August, the ABAchanged its rules to allow law schools to fill up to 10 percent of their class with students who have not taken the LSAT, as long as they were at the top of their college class and scored highly on the the SAT and ACT, college aptitude tests, or on the GRE or GMAT graduate school exams.
Additional law schools will probably follow. Before the ABA loosened its standards, around 15 schools had successfully applied for special dispensation to admit some students without LSAT scores, and Barry Currier, managing director of accreditation and legal education at the ABA, expects these and other programs to take advantage of new rules allowing them to do so without informing the ABA.
The test has been a longstanding favorite of law schools because it offers strong clues about whom to admit. Research has shown that the LSAT scores are a good predictor as to how students will do in the first year of law school, and higher scores correlate with bar pass rates. The ABA says it has studied academic outcomes of students who were admitted to the 15 programs that allowed entry to some students without the LSAT, and it found that they were no worse off than those who had sat through the four-hour exam.
Currier says doing away with the test might draw people to a career in law who would otherwise go to business or medical school. As to whether the new school policies might diminish the test’s popularity, Wendy Margolis, a spokeswoman for the the Law School Admission Council, which administers the LSAT, says she isn’t worried. “We don’t see a huge impact from this,” she says.
The use of alternative exams could open up the market for test companies, Currier says, “if the ACT, SAT and GRE decide to do the work to compete for the business that LSAT does.”
Law schools could apply for an even more liberal application of the new rule: ditching the LSAT for more than 10 percent of the class and using a different standardized test as an admissions gauge for those students if they can conclusively show that the exam is as good a predictor of academic achievement as the LSAT. As further schools begin experimenting with admissions, the composition of incoming law school classes could change, and the LSAT could lose standing as an exclusive ticket to law school.
“We are really at the front end here of what this might mean,” says Currier.
English changes all the time, often in subtle ways—so it’s not surprising that we’ve lost many delightful words and phrases along the way. In his wonderful book Forgotten English, Jeffrey Kacirk takes a closer look at the origins and histories of these language relics. Here are a few of our favorite words from the book; for more, check out Kacirk’s website.
The medieval era’s Miss Cleos, these so-called wise men made predictions based on what was happening in the sky.
This word, from the Latin root crapula, arose in the 18th century. According to Kacirk, it “denoted intestinal and cranial distress … arising from intemperance and debauchery.” Put another way: If you get crunk, expect crapulence.
A term describing a servant who did his duty only lazily except when within sight of his master, “a form of insincerity known as ‘eye-service,'” Kacirk notes. Replace servant with employee and master with boss, and you could probably know a few people to whom this term would apply.
This Old English expression (probably borrowed from German) meant “fleeting weeks,” and refers to what we today call a honeymoon. Flitterwochen is, obviously, a much better word.
Though this term comes from the 18th century, chances are you know a fribbler. He says he’s really into a lady, but just won’t commit. The behavior of a fribbler was called fribbledom, by the way.
Back in the day, husbands didn’t just hold their wives’ hands during childbirth—they gave them the medieval version of an epidural: Cheese. Groaning-cheese was said to soothe a lady in labor, and so husbands paired it with groaning-cake and groaning-drink.
A word from the 18th century for the dilation of blood vessels—caused by long-term overconsumption of the drink—in an alcoholic’s nose.
A medical device (which Kacirk says resembles a hair net) that was used in the 16th and 17th centuries. After the patient’s head was shaved, the cap was filled with herbs and placed on his head, supposedly curing him of ailments like headaches and insomnia.
This Middle English word originally meant “an incorrigible, dogmatic old pedant,” but eventually came to refer to an incorrect opinion that someone clung to. According to Kacirk, the word originated with an illiterate 15th century clergyman, who incorrectly copied the Latin word sumpsimus and read it in mass.
If people living from medieval times up until the 19th century had a bad dream, they could blame it on a night-hag. This female demon’s M.O. was to kidnap people at night on horseback, and give them nightmares by “producing a feeling of suffocation,” according to Kacirk. There were a number of strategies for keeping a night-hag at bay, including: placing bread blessed at the local parish under a child’s pillow; arranging shoes under the bed with the toes pointing out; and hanging flint chips—aka hag-stones—around the bedposts.
A 17th century term for a surgeon who specialized in curing pox or the clap.
This Anglo-Saxon word, taken from Old French, refers to animal intestines and internal organs, which were eaten by peasants in a dish called garbage pye. Yum!
From the the 16th to 19th centuries, people would have called lawyers like Breaking Bad‘s Saul Goodman petty-foggers. “For a fee, these attorneys were willing to quibble over insignificant legal points … or use unethical practices in order to win a case,” Kacirk writes.
Chaucer coined this term (which, according to Kacirk, comes from the phrase “pig’s eye”) for a sweetheart. Use it next Valentine’s Day and see what happens.
A 16th century word for a bald head, which apparently resembled peeled garlic.
Nobody wants to say that the exterminator is coming over. Use this 14th century term—taken from the Old French word raton and the Medieval Latin word ratonis, which both refer to rats, according to Kacirk—instead.
Jimmy Kamara, 9, is one of the students in Sierra Leone who use radios to continue their education while schools remain closed owing to Ebola.
Tolu Bade/Courtesy of UNICEF
Every day, 17-year-old Kaday goes to school by turning on the radio.
She’s one of the million school-age children in Sierra Leone who’ve had no classroom to go to since July. That’s when the government closed all schools to curb the spread of Ebola.
But that doesn’t mean the kids have stopped learning. In October, the government launched a radio education program, partnering with UNICEF and several development organizations. Teachers write and record hourlong lessons that are broadcast on 41 government radio stations, as well as the country’s only TV channel. Younger children listen in the morning; older ones tune in during the afternoon and evening.
“This is to ensure that children’s rights to education is not disrupted even when schools have been closed,” says Wongani Grace Taulo, UNICEF’s education chief in Sierra Leone. “It’s been more than half a year of school closure. The implications can be devastating when children just stay home [and] lose out on their academic gains.”
UNICEF’s partner organizations visit around 2,000 households of school-age children each week to see how many children are listening. At first, fewer than 20 percent were tuned in. Gradually the numbers picked up. At its peak, more than 70 percent of students were listening. The average rate, Taulo says, is about 50 percent.
The radio lessons could be critical in a country where the decade-long civil war had weakened the education system even before Ebola struck. Fewer than 45 percent of adults are literate, and the secondary school attendance rate among adolescent boys and girls is 40 and 33 percent, respectively. The Ebola outbreak has threatened to reverse any progress Sierra Leone and its neighbors Guinea and Liberia have made in rebuilding its schools.
Angela Kamara, 6 years old, takes a lesson from the radio.
When schools finally reopen in Sierra Leone, Taulo adds, the radio program will be adjusted to serve as a complement — rather than an alternative — to classrooms.
But school by radio isn’t a perfect solution.
Radio is by far the most common way Sierra Leoneans get their information, with studies estimating that between 70 and 90 percent of the population tune in daily. But the number of people who actually own a radio is only about 25 percent, the country’s education minister told Agence France-Presse.
And that’s a “generous estimate,” says Chernor Bah, a girl’s rights advocate from Sierra Leone. He’s been helping make sure the radio program reaches as many underserved children as possible.
“With adolescent girls, there’s an even greater challenge,” he says. “Girls tend to face the additional burden of providing for their families. So instead of being home listening to the radio, most girls will be outside selling food.”
Even if students do listen, says Bah, the radio program doesn’t give them a chance to interact with teachers and other students. The government encourages students to send questions via text message, but many of the poorest students can’t afford a phone.
That’s where organizations like BRAC, one of the world’s largest education organizations, have stepped in. With support from the Malala Fund, the nonprofit has bought radios for 1,200 of the most marginalized girls in Sierra Leone. It’s also created 40 informal classrooms, where six or seven girls get together with a mentor up to four times a week to discuss the day’s lessons, learn about Ebola and discuss personal challenges.
Bah particularly remembers Kaday, the 17-year-old, whose mother was one of the first health care workers in Sierra Leone to die of Ebola. “This is a story of a girl who has gone through too much,” Bah says. Before Ebola struck, her parents sent her to live with an aunt in the city, hoping Kaday could get an education there. But the aunt tried to persuade her to have sex with an older man for money. Another aunt treated her as a housemaid.
School may not be in session, but there are special clubs for girls to talk about their radio lessons and just have fun hanging out.
Alison Wright/Courtesy of BRAC
“This girl, now 17, is only in grade six because of all this back and forth,” Bah recalls. “The [school club] is the place she feels normal again.”
Kaday had just taken her sixth-grade exam when schools shut down. All she wants, Bah says, is to go back to class. “You don’t forget a girl like that.”
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Paul Gu dropped out of Yale University four years ago to become an entrepreneur. In the time since he has moved to California and teamed up with two former Google executives to create a company, Upstart, that matches borrowers with lenders online.
Mr. Gu is like many other Silicon Valley hopefuls, except in one respect. He is a Thiel fellow, one of a select few who were given $100,000 each to leave college to pursue their start-up dreams. “It has sort of good and bad associated with it,” Mr. Gu says of how people react when they find out that he is a fellow. “It comes with a whole set of assumptions and mixed views. People want to know if you think nobody should go to college.”
In the five years since the billionaire investor Peter Thiel announced his eponymous fellowship, the project has assumed outsize social significance, as Mr. Gu discovered. Mr. Thiel’s outspoken nature and his view that the value of college is oversold have earned him both enemies and accolades.
For some, Mr. Thiel is a dangerous man, seeking to undermine a system that has proved the surest path to economic success for millions of Americans. For others, his ideas represent the future of American education, in which brilliant minds are freed from the convention of college and are encouraged to educate themselves on their own terms.
For Mr. Gu and other members of that first class of fellows, their experiences have been neither as dire nor as dramatically successful as observers on both sides predicted. While many fellows say they appreciate what college gave them, they also didn’t feel they needed a credential to pursue their dreams. And while they agree that dropping out isn’t the right choice for many students, they hope they’re proof that there’s not just one path to success.
Indeed, while higher-education experts debate his philosophy, they agree that Mr. Thiel has succeeded in getting more Americans to ask what college provides that the working world cannot.
Jake Schwartz, who heads General Assembly, a company that offers business- and web-development courses as an alternative to formal degree programs, agrees with Mr. Thiel that there is an almost “religious” dedication to higher education.
“I mean religious in a sense in that we don’t necessarily ask why, we just presume it’s important and deserves all the resources we can throw at it,” he says. “It’s probably a healthy thing to ask why and ask which are the benefits to society and which aren’t. That requires alternatives, counterfactuals.”
In September 2010, when Mr. Thiel unveiled his alternative, the global economy was in the tank and concerns about college costs were growing. Interviewed on stage at TechCrunch Disrupt in San Francisco, an annual conference focused on start-ups, Mr. Thiel launched into a now-familiar narrative. Silicon Valley, where he had become rich by creating PayPal and investing in Facebook, seemed “strangely disconnected” from the rest of the world. It buzzed with energy, yet American society was in stasis.
“We need to be spending a lot more time focusing on the kinds of breakthrough technologies that will take our civilization to the next level,” he said.
Before the crowd of technology enthusiasts, he sketched out his plan: grants of up to $100,000 each for up to 20 people under the age of 20 to “stop out of school” and pursue their passion.
Mr. Thiel had come up with the idea for the fellowships the day before his talk, but his concerns about college had been brewing for more than a year: It’s too expensive, it encourages conformity, and it teaches nothing about entrepreneurship.
In a recent email interview with The Chronicle, he wrote that he initially envisioned building a better university through the Thiel Foundation but concluded that “to compete within the system would be tremendously expensive and probably futile.”
“What could we do?” he went on. “The opposite of putting faith in the system is putting faith in young people. When I thought of that, I didn’t think I could wait.”
The fellowship struck a chord nationally. It reflected the glossy appeal of Silicon Valley, in which drive, smarts, and venture capital are the requisites for success. But it also tapped into the everyday fears of college students. Are they wasting their time and money in school? Can they strike out on their own without four years of coursework under their belt? What is needed in that black box called college to develop a successful career or lead a fulfilling life?
In the years since, Mr. Thiel’s message has become its own cultural meme. A character in the HBO show Silicon Valley based on Mr. Thiel rails against college, calling it “snake oil.” And Wired magazine in 2014 created an online reality series, “Teen Technorati,” that follows 40 fellowship finalists.
For his part, Mr. Thiel said he did not anticipate the attention. “Our thought was, ‘This is going to be a very idiosyncratic, small program,’” he told 60 Minutes in 2012. “And the fact that it was controversial was a big surprise to us, but it was because an awful lot of parents are quite worried about the education system. There’s a great deal of anxiety beneath the surface.”
About half came from the country’s top institutions, like Harvard University and the Massachusetts Institute of Technology. Six came straight from high school, turning down college entirely. Several were clearly prodigies: One began studying at MIT at the age of 14, while another was in his fourth year of a Ph.D. program in neuroscience at age 19.
Some of their ideas fit Mr. Thiel’s notion of transformative inventions: create a low-cost solar-energy device, redesign the wheelchair, improve biotech research through automation. But other ideas were more conventional: improve e-commerce, create educational games, track your favorite bands.
Of that first class of 24, nine fellows agreed to be interviewed by The Chronicle. Others declined or did not respond to interview requests, although many have been written about over the years. Most of those interviewed said they had left college not because they were disillusioned with it but because they were impatient to start working.
“We didn’t think about it as a grand statement about the value of education,” recalls Daniel Friedman, who left Yale to start an e-commerce company with Mr. Gu. “It was just that here was an awesome opportunity to learn something about what we love doing and maybe challenge ourselves. And if a year or two later we messed everything up, we could go back to school.”
The most valuable part of the fellowship for many wasn’t the freedom or the money but the network they were plugged into. Although less structured in its early days, the fellowship now offers retreats, internships, summer housing, and teams of advisers who work in and around the industries to which the fellows aspire.
“It looks like I made great decisions by myself, but that’s not true,” says Eden W. Full, who left Princeton to work full time on SunSaluter, a device she began designing in high school to provide cheap solar energy and clean water for people in developing countries. The Thiel Foundation connected her with, among others, the founder of a clean-tech start-up, a consultant in the solar industry, and a lawyer for start-ups.
During her fellowship Ms. Full founded a nonprofit that now develops and distributes SunSaluter to 15 countries and has a manufacturing operation in India. She returned to Princeton once the fellowship was over to complete the mechanical-engineering program, but resumed work at her nonprofit one semester shy of earning her degree.
“The only thing I haven’t done is fulfill the arbitrary requirements,” she says. If a potential employer thinks that’s a problem, she notes, chances are it’s not a place she’d want to work.
Ms. Full is something of exception in that many of the fellows no longer work on the idea that won them the fellowship in the first place, sometimes ditching it after their plans proved unworkable.
One early success story ended in a company’s collapse. Airy Labs, an educational-gaming company started by Andrew Hsu, who had been studying neuroscience in a doctoral program at Stanford, secured venture capital and expanded to more than 20 employees. But within a year the company was undone by poor management, according to a 2012 article in TechCrunch. (Mr. Hsu declined an interview request, but the Thiel Foundation says he is working on a new company with another fellow.)
Other fellows had early setbacks, although not as dramatic.
Mr. Friedman and Mr. Gu quickly abandoned their e-commerce idea after they realized they weren’t ready to run a business. Mr. Friedman went on to intern at a venture-capital firm and learn about coding and product development, which helped him and a new partner start a company, Thinkful, that offers courses in web development.
David Luan discovered that biotech companies weren’t willing to invest in the kind of costly system he envisioned to automate their research. He used his training in robotic perception to develop instead a service, called Dextro, that analyzes the content of photographs and videos. He also returned to Yale to finish college while his co-founder completed his graduate degree.
One fellow, John Marbach, left the program after his first year. One of the younger participants, he felt out of step with the others. “The Thiel Foundation said, ‘Oh, we’d be happy to introduce you to VCs and CEOs and coaches,’” he recalls. “But there was no, like, ‘Oh, we could introduce you to some normal friends.’” He returned to Wake Forest and will graduate this year.
Despite their struggles, most fellows interviewed say they are glad they pursued the fellowship. Even Mr. Marbach says he recommends it to others, now that it has more of a built-in support system.
It’s hard to know whether the experiences of the fellows who agreed to be interviewed are representative of the first class as a whole. The Chronicle was unable to determine what nine of the original 24 fellows are doing now, although it appears as if they, like others, moved on from their initial ideas.
Of those interviewed, all but one say they learned more about their abilities and the business world than if they had stayed in college. And though most found college socially and intellectually rewarding, few felt compelled to finish. “Both my college education and my Thiel-fellowship experience were very valuable to me. I don’t think any less of one or the other,” says Ms. Full. “But we need to encourage students that they can step off the conveyor belt whenever they want. I want to live my life as an example of that.”
The most vocal critic of traditional higher education in that first class of fellows is Dale J. Stephens, who dropped out of Hendrix College and wrote a book, Hacking Your Education. He used the Thiel megaphone to promote the idea of self-directed learning through a service he calledUnCollege.
Two years ago, UnCollege began offering a gap-year program in which students pay $16,000 for a combination of study abroad, residential learning, an internship, and an independent project. “We totally believe in a broad-based liberal-arts education,” he says, “but don’t think it needs to take four years.”
Mr. Stephens says the most useful outcome of the fellowship had nothing to do with its effect on recipients. “It sparked a national conversation about the return on investment of higher education,” he says. “I think it’s going to benefit an entire generation of kids and put a thought in parents’ heads about how they’re spending money on their child’s future.”
That is exactly what worries Vivek Wadhwa. An expert on entrepreneurship and innovation, he is Mr. Thiel’s most ardent critic, having debated him in person and in print.
Mr. Wadhwa, who holds positions at Duke and Stanford, calls Mr. Thiel “disingenuous and dishonest” for arguing that higher education turns people into conformists and is often a poor investment.
“I meet children all over the world who think they should drop out of college,” Mr. Wadhwa says. “And if they drop out of college, they’ll be flipping burgers.”
He is also unimpressed with the fellowship’s results.
“Right now we should have had a dozen billion-dollar companies, if what Peter Thiel said was true,” he says. Instead, he sees small businesses selling small products, and teenagers teaming up with seasoned executives because they lack the management skills they could have learned in college.
Another skeptic, Audrey Watters, a former academic who writes about education technology on her blog, Hack Education, is troubled by the elitism she sees embedded in the fellowship’s structure. If good ideas and hard work are all that separate winners from losers, she asks, why are most of the fellows male and white or Asian—just like Silicon Valley itself?
“It’s part of this larger narrative of meritocracy,” she says, one that ignores the influence of race, gender, income, and parental education on a person’s chances for success.
Mr. Thiel and foundation executives dismiss criticisms that the program is underperforming and elitist.
“This isn’t a two-year gap program,” says Danielle Strachman, the fellowship’s program director. “We have a long-term horizon over 10 years.”
If you add up the work of the four classes of fellows—83 people in all—their ventures have raised $72-million in investments and produced $29-million in revenue, according to the foundation. Those who have sold their start-ups have brought in $17-million. (Two left the program early, and six others returned to their studies when their fellowship ended).
“Almost all of them did and learned far more than they would have in college,” Mr. Thiel says.
In terms of diversity, the foundation says the participation among young women has improved. The percentage of applicants who are female has increased from 10 percent the first year to 25 percent in 2014 (five of the 20 fellows chosen last year were women). And Ms. Strachman estimates that six to 10 fellows each year are first-generation Americans or students from abroad.
Mr. Thiel has acknowledged that the fellowship disproportionately draws students from elite colleges, but he says that “we have to question the system starting from the top.” Still, he adds, “the message of the fellowship is the same for everyone: You should think for yourself instead of letting an institution do it for you.”
In the five years since the Thiel fellowship was announced, student entrepreneurship has become something of a movement in its own right, growing in size and sophistication. It has been helped along by the Thiel Foundation’s twice-yearly summits for young people interested in creating their own companies, but also by hackathons, campus TEDx conferences, and other events.
“When the fellowship first started, this was all pretty radical and you’d be hard-pressed to find young entrepreneurs out there in the world running teams,” says Ms. Strachman. “We think we helped change that conversation.”
Universities are also fueling the enthusiasm, creating business incubators on campuses that enable students to find partners, mentors, and, in some cases, investors. Case Western Reserve,Colgate, and Stanford are just a few of the universities that have greatly expanded, or invested in, programs for students who want to build start-ups.
The creation of such programs raises the possibility that the Thiel fellowship might lose some of its allure if students can stay in college while working on their start-ups.
As for Mr. Thiel’s larger contribution to higher-education reform, fellow disruptors have mixed feelings. They credit him with asking tough questions but say neither he nor the fellowship has suggested viable ways to create a better and more affordable experience for millions of students. “He’s working with a small sliver of people that’s just not going to be relevant to most folks,” says Michael B. Horn, a co-founder of the Clayton Christensen Institute for Disruptive Innovation.
The Thiel fellowship may have become a cultural barometer that reflects the uncertainty students feel about the value of a college education. But its ultimate worth could be to show that there are no shortcuts to success—that even with talent, drive, and access to Silicon Valley’s brightest minds, you are likely to stumble many times along the way.
“Are there alternatives to college?,” says Mr. Gu, whose 25-person company has secured more than $6-million from investors but is still seeking profitability.
“Yes, but you have to work pretty hard. It’s pretty unrealistic that most people would find those things on their own. Most people would be better off going to college.”
Is stress impairing your performance at work and compromising your relationships? Changing the way you think about stress can help you turn stress into an ally and use it to improve mental agility and work performance; a reportin the Journal of Experimental Psychology showed that physiological and cognitive benefits result from thinking of stress as “functional and adaptive” rather than a signifier of “threat.”
Turning stress to your advantage is no easy task. It requires mental discipline to pause when you’re in the grip of stress and to reframe it as potentially useful. In my executive coaching practice, I help clients transform their attitude about stress. There are many ways to do this, and the method needs to be individually tailored to each client’s unique situation. Here are three ways that clients in my practice have reappraised their stress and used it to propel positive changes:
Reconceive essential relationships. The third-generation CEO of a family business, my client experienced severe stress as his executive team (comprised of older family members) lambasted his every decision about how to run the company. Feeling defensive, he retreated from key CEO tasks such as strategic planning and securing a line of credit to keep the business afloat. Coaching focused on interpreting his stress as a signal to redefine his relationships with family members, whose support would be essential for survival of the company. Coaching empowered him to think of his family members as repositories of wisdom, people whose interests were aligned with his own. As he rethought these relationships, he transformed the monthly executive meetings from a battleground into a collaborative brainstorming session on opportunities for the company. With this newfound focus, the CEO harnessed the team’s knowledge and motivation to grow the company. Not only did he feel calmer and happier, but within four months he secured the line of credit and initiated critical discussions with potential outside investors. By reappraising his stress as a friendly message to heal valuable relationships, he protected the business and repositioned it for growth.
Develop strategic leadership skills. Another client was an attorney who was recently promoted to serving as his biotech firm’s general counsel, a position in which he was expected both to oversee the legal department and function as a strategic partner in the C-suite. He felt overwhelmed by the pressures of the two roles and the need to delegate tasks to associate attorneys. His stress mounted as he micromanaged their work and got “stuck in the weeds” of low-level tasks. We strove to reframe his stress as a signal that he should stretch beyond his comfort zone and embrace his new responsibilities as a strategic partner on the executive team. This reappraisal prompted him to begin placing more trust in his legal staff’s decision-making capabilities, to meet more often with key partners inside and outside the firm, and to embrace leadership roles that would position him more as a visionary leader than a worker bee. As he did so, his stress evaporated and he led the executive team to take a bold step toward expanding the business into a complex but potentially lucrative overseas market.
Apologize and express gratitude. Another client, the chief operating officer of an insurance company, was experiencing massive stress in the context of a work crisis. During a recent company event, she consumed an excessive amount of alcohol and embarrassed herself by making loud and rude comments to colleagues. Her behavior became so unruly that she was put in a taxi and sent home. She was terrified that she would lose her job. Part of the coaching focused on how to communicate with the CEO and executive team in the wake of this blunder. I was taken aback when she told me that she planned in an upcoming meeting with the CEO to complain that her year-end bonus was lower than she deserved based on performance metrics. My responsibility, I realized, was to respectfully confront her about how ill-conceived and potentially destructive this approach would be. After pointing out that her ongoing stress might be a signal that she was still uncomfortable with this course of action, we had a productive dialogue about alternative strategies. Ultimately, she concluded that it would be most prudent not to request a higher bonus, but instead to apologize for her behavior at the event and express thanks that she still had her job at all. This decision immediately reduced her stress level and served her well with the CEO and management team. She retained her position and continues to repair her reputation as a trustworthy leader in the firm.
These vignettes are real-world examples of what psychologists have been learning about stress management in well-controlled experiments. If you can reappraise stress as a constructive hint that you should seriously reorient your thinking and behavior, then the stress can diminish and steer you toward a renewed sense of purpose and growth.
I felt calm as I sat on a blue couch for my close encounter with the nascent field of financial therapy. I watched as Joel Reimer, a fit, 50-something man in a golf shirt, put sensors on my thumb and fingers.
I was in the middle of Kansas, in one of the exam rooms at the Financial Therapy Clinic, a counseling and research center run by the Institute of Financial Planning at Kansas State University. The clinic was on Poyntz Avenue, the main street in Manhattan, Kan. The office, like the town, the street and the building, was clean, spare and quiet.
“So I appreciate you coming in today,” Mr. Reimer said. “I’m just going to ask you some questions. Some background questions first and some financial goal-setting questions. Do you have any questions?”
I didn’t. He began by asking about my marital status, children and employment. Then he went into questions about my family’s finances and about our goals.
Which of the following best describes your financial situation at the end of the month: Do you have several unpaid bills, do you break even or do you have some money left over?
We have money left over, I said.
Suppose you were to sell all of your possessions, including your home, so you have turned all your assets into cash and you were going to try to pay off your debt. After doing that, would you be in serious debt, break even or have a lot of money left over?
I asked him what he meant by a lot since that was a relative term. He wouldn’t say, but I chose it anyway, since we would have money left.
When he got to my financial literacy, I gave myself high marks. I took a moderate grade for my willingness to take risk on an investment. And I spoke in detail about our financial goals for the year.
After 30 minutes or so, he unhooked me from the machine. “That’s it for our questions at this point,” said Mr. Reimer, with the same friendly but unreadable expression he had evinced since the start. “We’ll let you go on out and answer some additional questions.”
The written questions should have been easier. They were focused entirely on basic financial concepts, responsibilities and anxieties around money. But they asked for actual numbers, like our monthly housing costs and income after taxes. I had been honest up to this point. But I felt uncomfortable revealing this information, even though Mr. Reimer was a complete stranger.
I shouldn’t have worried. The researchers didn’t care about any of my answers. They cared about my stress level when I answered the questions.
“Do you think you were stressed or not stressed?” asked Sonya Britt, the chairwoman of the personal financial planning department at Kansas State.
“I don’t think I was stressed,” I said. “I think I was cold.”
“Hmmm … you actually were quite stressed,” she said. “It doesn’t matter what the room temperature is. After about two minutes, you should be able to adjust and go back to your homeostasis level. You got more stressed as you went on.”
She then showed me a graph of temperature at my fingertips. It started at 74 degrees and dropped to 72 during the questioning. The ideal temperature, she said, was 92 degrees. Most people who were relaxed were around 82 or higher.
“This has nothing to do with the temperature of the room?” I asked.
“No,” she said. “What’s happening in that situation is your blood is going back to your heart. It’s the fight or flight response. There’s no blood left in your fingers.”
As if that were not bad enough, she added that my “skin conductance level” — science-speak for sweaty fingers — doubled during questioning. I was cold and clammy.
“The purpose of that experiment was to see how people reacted to talking to a financial adviser,” Ms. Britt said. “It is stressful. And it’s more stressful having to answer questions about your goals, which is not that surprising.”
It may not be surprising, but it is problematic. Getting people to be less stressed when thinking, talking and making decisions about money should be any adviser’s focus. In financial therapy, it is the goal, but it can be a tricky sell.
Financial therapy is a lot like what it sounds like, a combination of psychology and financial advice, but centered on people’s relationships to money. Practitioners have to be part therapist and part financial adviser to be successful.
They are not to be confused with accredited financial counselors. While the two fields have overlap, a counselor usually comes in at a point of crisis — like bankruptcy or intractable arguing between spouses. Both financial therapists and counselors are small in the universe of advisers. There are about 250 members of the Financial Therapy Association, formed by Ms. Britt and others in 2010 during a breakaway meeting of the Association for Financial Counseling and Planning Education, which administers the accredited financial counselor designation. That number is a fraction of the 1,100 accredited financial counselors, whose numbers are dwarfed by the more than 71,000 certified financial planners and more than 300,000 advisers in the United States, according to Cerulli Associates.
A financial therapist’s role is to understand the stories we tell ourselves, true or not, about money — or in the parlance of the field, our “money scripts.”
Brad Klontz, a financial psychologist in Hawaii and an associate professor at Kansas State, thought up the phrase. In his research, Mr. Klontz has found four basic scripts: money avoidance, money worship, money status and money vigilance. Each has its own complications.
People with money avoidance tried to distance themselves from money. The result was predictable: They undermined their financial well-being.
Those who worshiped money believed it would cure all their problems, if they only had more of it.
People with a money status script seemed similar to money worshipers, except they connected money to their sense of well-being. Or as Mr. Klontz put it, self-worth was linked to net worth.
The last script was money vigilance. These people did not flaunt what they had; they paid their debts on time and were generally cautious about overspending. If anything, they were the ones who could deprive themselves for no rational reason.
Like mental health problems, these money scripts often existed outside of people’s consciousness and were formed in reaction to events that occurred in their lives.
One example Mr. Klontz gave was of a family on the verge of losing its house because of past bad decisions. In one case, a grandparent comes in and saves the family. In another, the parents save the house themselves. In a third, the family loses the house.
The precipitating event was the same in all three cases, but how people in those scenarios will feel about money will be quite different. And those different feelings are what make helping people overcome money disorders difficult for advisers.
Edward Horwitz, a former insurance executive who now works as a financial therapist and instructor of financial planning at Creighton University’s Heider College of Business, is consulting with a company that administers employee retirement plans. The company, which did not want to be named because it was in the early stages of the program, has hired Mr. Horwitz to provide financial therapy to plan participants as a way to get more employees saving in their retirement plans but also to distinguish itself in a crowded field.
Mr. Horwitz has eschewed the traditional 401(k) approach of talking about fund choices, contribution limits and income-replacement targets — difficult to imagine for someone thinking 30 years out.
“We’re trying to go in there and work more from the emotional and behavioral aspects to help them first connect emotionally with what their retirement is going to look like,” he said. “I use emotional triggers that tap into the sensory experience that people want to have in retirement. We have them understand retirement with no quantitative aspects involved.”
The experience is not exactly like lying on a couch. But as with traditional psychotherapy, the message is not always what people want to hear, and that is when the real work starts, Mr. Horwitz said.
“When people face the numbers, it may come at a price that is more than they can possibly afford,” he said. “But at least they know that. Then they’ll say, ‘O.K., what can I afford?’ They’ll have a better expectation.”
A big challenge with financial therapy, greater in some ways than financial advice or counseling, is that it lacks formal accreditation, like the certified financial planner or accredited financial counselor designations. (Mr. Horwitz has a doctorate in personal financial planning.)
And that creates the risk that people will just call themselves financial therapists and start delving into someone’s psychological feelings around money by simply offering lessons from their own lives. The results could be far more damaging than underfunding a retirement plan.
“You see a lot of financial planners who say we care about the emotions,” Ms. Britt said. “Are they doing it in a way that is helping the client or a way that is only going to bring up problems later?”
Ms. Britt offered an example in which a man was always trading securities and attributed his appetite for risk to his grandfather, who was a successful risk taker. But then, she said, the adviser asks something about the man’s father and learns that the relationship was an abusive one.
“And do you say, ‘Oh, well, I’m sorry about that,’ and you move on about this day trading business because you think that’s what your competency is?” she said. “Maybe the adviser is the first person this person has disclosed that information too. As a financial therapist, you’d be trained to set up an appropriate referral and address it for the rest of the meeting and get that person to a safe place.”
In private practice, financial therapy is a time-consuming process that can be difficult to charge for. It is far more intensive than a quarterly portfolio review, but when it comes to paying for it, financial therapy is an out-of-pocket expense that can be more difficult for investors to grasp than paying a management commission.
Mr. Horwitz said he charged $200 to $1,000 an hour, but he said not everyone he pitched therapy to understood the value.
Anthony Canale, chairman of the Financial Planning Association of New York, has taken financial therapy courses and has incorporated it into his planning business. He charges about $1,000 to $2,000 for a financial plan and includes therapy, if needed, in the fee.
“I felt financial planning should be available to everyone, but it’s hard to make a living when you work with clients who are of modest means,” he said.
He recalled a case where a woman was playing what he called “credit card roulette” to keep herself afloat but still supporting two sons in their 40s. This was a straightforward case to counsel. But he did not take her on as a paying client when he realized she couldn’t even give him a monthly list of expenses.
Unlike psychotherapy, where determining the effectiveness of the advice is difficult, financial therapists have tried to quantify the impact of their work. In a clinical trial published in The Journal of Psychological Services, Mr. Klontz and four other researchers found that in two key areas — psychological distress around money and ratings of financial health — people who underwent financial therapy maintained the gains three months after treatment ended.
Financial therapy is meant to get people thinking about the financial decisions they make — and not about their investment returns. These methods of addressing clients could help give people of various income levels the financial security that only the wealthy enjoy.
And there is an interest in this sort of financial work beyond a small niche. Large financial firms are making a push to talk to clients more explicitly about broader investing biases drawn out in the field of behavioral finance, which looks at the ways predispositions influence and distort financial decisions.
“All of these biases that you find in investors is a direct result of their experiences and their preferences that they’ve had in financial markets,” said Barbara Reinhard, chief investment officer of private banking Americas at Credit Suisse. “Asking ‘What’s your bias?’ doesn’t get you anywhere. It’s, ‘Mr. Smith, tell me, what’s the fear?’ ”
As I sat there that day at Kansas State, I knew if I had answered the questions again, knowing what I now knew, I doubt I could have masked my stress any better. Being open and honest about money, even around complete strangers, is hard.
“My stress isn’t, ‘I’m not going to be able to pay my bills,’ ” I told Ms. Britt and Mr. Reimer. “My stress is, ‘I know how people perceive money.’ It was more stressful filling out the money parts of this survey. …”
“Just divulging the numbers,” Mr. Reimer said.
“Exactly,” I said.
As I was leaving I asked Ms. Britt who had the lowest stress level in this experiment. She turned to Mr. Reimer, and they agreed it was a chatty teacher.
“Basically she had never talked to anyone about her finances before, and she wanted to keep talking,” Ms. Britt said. “We felt bad that we had to move her along.”
Maybe the teacher didn’t know enough to worry. Or maybe she knew that she had a pension, had saved some money and would have no worries. Either way, she was living a financial life with an openness that could be a model to others.
Correction: February 9, 2015
An earlier version of this article misidentified an accrediting organization for financial advisers. It is the Association for Financial Counseling and Planning Education, not the Association of Financial Counseling, Planning and Education.