November 5, 2017 JV

The Value of Values

RATS – that’s what the major mining company’s cross-functional team affectionately called their Rejects and Tailings Project in 2010.  From a mine closure perspective, managing processing plant rejects and tailings is critical.  Whether to bury rejects and tailings in pits or to store them above ground in ever-growing dams or “black mountains” is a very serious decision.  Not only does in-pit disposal of rejects and tailing sterilise any remaining reserves, but if potentially acid-forming, they could also pollute aquifers, causing long-term environmental damage.  However, the only viable option at the time seemed to be the status quo, postponing a final decision.  Although the mining company’s values included environmental responsibility, the final decision was driven by value; Net Present Value (or NPV) to be more specific.

NPV is the sum of all cashflows (revenues and costs) discounted into the future to present them in today’s dollars.  The problem with NPV is that even a massive cost (such as environmental provisioning for mine closure) virtually disappears with the discounting process when pushed far enough into the future.  When the only form of future liability is considered to be financial, NPV has the power to make it seem like chump change.  Does the NPV calculation represent a systemic issue with how we view what is important in life and what is not?  Will such short-term decision-making remain the default or can we learn to grapple with truly long-term issues?

What is really important in business?  A survey of performance measures used in various businesses provides a useful summary.  Revenue, cost, quality, productivity, and speed to market are prime performance measures.  These have recently been balanced by employee safety, environmental compliance, community perception and employee morale.  The purpose of business is to produce goods and services that customers are willing to pay money for.  What is telling though, is that when people are on their death-bed, no-one ever wished they spent more time in the office.  Instead, they all had regrets about not spending enough time with loved ones.  So, although we’d all agree that business is essential for earning a living, it’s no substitute for living itself.  The latter requires a different concept of value.

What is really important in life?  When business leaders are given the ability to define what’s valuable, they invariably create situations that favour one party over another.  I guess that’s what’s called enterprise.  But how do we create an environment that ensures a level playing field and prevents corporations such as Enron, Lehman Brothers and Volkswagon betraying investors, destroying Billions in value and affecting millions of lives?

Lives.  That’s what’s important; or is it?  Now one group contends that all lives have intrinsic value and that all people should be respected as equals, while others say that they are tasty and should be eaten.  The only way to avoid this kind of subjective bias is to have value externally set.

The United States Declaration of Independence from Great Britain was framed by founding fathers who had a keen appreciation for human rights.  The second sentence from this epic work states that “we hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”  This has been called “one of the best-known sentences in the English language”, containing “the most potent and consequential words in American history.”  It was the fact that the truths were self-evident that gave the fledgling nation the inner strength to form and become the nation that has led the modern world.

However, over the past two hundred years or so, these self-evident truths have come under attack.  In fact, the very notion of “truth” has been questioned (as discussed in  The term “values” came into vogue as the truth of an externally-given set of objective morals began to be rejected; but at what cost?  Modern man is now encouraged to challenge, deconstruct and redefine what each think is important to them.  As a society, we then debate and vote on what we believe to be true and important and redefine what we no longer like.  It’s no wonder that after thousands of years of civilisation, debates are still being held to answer the question “what does it mean to be human?”

I’d like to share a story before offering a suggestion for how to combat these collective issues that mess with our priorities in life.  Over the past three months, I have been burning the candle at both ends, attempting to service the needs of two separate clients while also preparing for two major conferences.  I’ve been working so may hours that I haven’t even had time to write a blog since mid-September (and I really enjoy writing these things).  About a month ago, I drove to Caboolture Railway station and upon arrival, realised that I did not have my wallet.  While searching my car, I couldn’t help wondering how I could be here without my wallet.  I couldn’t remember when I last used it.  How could I leave home without it?  Why didn’t I notice its absence?  I phoned my wife and asked her to check the usual place I leave my wallet.  When not found, she walked around the house and looked in the kitchen, the bathroom, on my desk etc.  No wallet.  My heart sank.  I had no fuel, I had no cash and obviously, no wallet, so I asked Cheryl to wake my son and drive to Caboolture with some cash.  At this point, still not remembering when I had last used my wallet, I began to wonder whether it had been stolen.  I dreaded the idea of cancelling and then replacing every card.

Thankfully, before I began to make the necessary calls, my son got hold of me.  He had my wallet!  Apparently, I had left my wallet on our coffee table and thinking it was his, my son took it to his room.  Why did I not remember going to the petrol station the night before and leaving my wallet in the living room?  Why did I not put it back in its proper place (as I always do)?  Why did I forget all of these things and think that I’d lost it the night before?

I had been so busy with work that I’d let the margins in my life shrink to almost nothing.  I only had time for work and as a result, I got so tired that I was running on empty.  I left my wallet in the wrong place, I didn’t realise that I left it behind and I forgot what I did the night before.  All of these were symptoms of the choices I was making in my life.  How long was I able to keep it up?  Just how long can we live with very little margin in our lives?  Not very long, without creating harm in our lives or in the lives of those we love.  I thought that I’d lost my wallet and all that comes with that when all I did was lose a few hours.  I’m so glad that I did not get mad at my son for taking my wallet.  What he did actually helped me to reassess my priorities.

Since that event, I’ve begun clawing back the margins; making more time for family and leaving some work for another day.  I decided that if I didn’t begin to do this, I may end up with something worse that a lost wallet.   Like Adam Sandler in the movie “Click,” I felt that I may fast-forward through life, only to wish that I’d not spent so much time in the office.

Comments (4)

  1. W Strudwick

    Great to get your post John, I enjoy your snippets of wisdom.
    There is a big difference between Intelligence and Wisdom, for instance, knowing that a Tomato is a fruit is a sign of intelligence.
    Knowing not to put it in a fruit salad is a sign of wisdom !
    I am a little over a month into retirement, not bored yet so enjoying it so far.

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