Tuesday, 21 March 2023 05:45

Why envy never builds business empires

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What emotion can cause the most trouble in your business and your career? Envy. That insight comes from Charlie Munger, billionaire investor and vice chairman at Berkshire Hathaway where he's worked in partnership with Warren Buffett for 45 years.

It's an insight Jeff Bezos should have considered before launching the ill-fated search for a second Amazon headquarters, nicknamed "HQ2."

Munger, born in 1924, started life during the Great Depression and he remembers the privations of that time, he said during a shareholders meeting of the Daily Journal in Los Angeles, where he is a director.

Since then, he said, "with all this enormous increase in living standards and freedom and diminishment of racial inequities and all the huge progress that has come, people are less happy about the state of affairs than they were when things were way tougher."

There's a simple explanation for this, he said. "The world is not driven by greed, it's driven by envy." Instead of caring about or appreciating their own welfare, he continued, people focus only on what others have that they don't.

That certainly seems to have been the case for Jeff Bezos, when he initiated the search for a second headquarters city, after Seattle, for Amazon.

Instead of selecting viable locations based on their geography, available real estate and local pool of tech talent, the company invited cities and counties to compete for HQ2 by offering packages of financial incentives.

Two hundred and thirty-eight cities and counties sprang into action, offering ever more lucrative incentives to lure Amazon to town. Eventually Amazon declared a winner – only it actually didn't.

Apparently too greedy to accept only one ginormous bid it decided to accept two ginormous bids, splitting HQ2 between Long Island City, a neighborhood in Queens, New York and Crystal City in Virginia, where it already had a sizable and expanding presence. 

That's when things started going south. Amazon in effect became a victim of its own success at pushing New York City and New York State into granting lavish incentives.

When word got out that the city and state would give the company a total of $2.5 billion in subsidies and tax breaks, many New Yorkers were outraged and they took to the streets in protest. Spooked, Amazon quickly pulled out of the deal.

That left it with half of HQ2 in Northern Virginia, a place where it was already building new offices before the contest for HQ2 began. After all the fuss and fireworks, the hunt for HQ2 achieved very little, other than to damage the company's reputation.

And then the truth came out. A year after Amazon announced it wouldn't build in Queens, Bloomberg published an investigative report. The whole HQ2 debacle, it said, was a result of envy.

Specifically, Jeff Bezos' envy of Elon Musk, whose company Tesla had just gotten a $1.3 billion incentive from the state of Nevada to build a gigafactory there. Amazon was getting incentive offers in the tens of millions, not billions.

That made Bezos angry, anonymous Amazon sources told Bloomberg and so the company wrote wrequest for proposals for HQ2.

The RFP mentioned the word "incentives" 21 times. In other words, the richest man in the world put his employees and 238 cities and counties through a lengthy and troublesome exercise that proved to be futile, all because he envied the second-richest man in the world.

Envy does seem to be universal among humans and even animals. In a hilarious experiment, two capuchin monkeys happily trade rocks for cucumbers, until one of them starts receiving grapes instead – a much more delicious food from the monkeys' point of view.

The second monkey, who had been perfectly satisfied moments earlier, sees her colleague receiving grapes and reacts with a spectacular show of envy, flinging the cucumber back at the researcher and rattling the wall of her enclosure in outrage.

According to primatologist Frans de Waal, when a similar experiment is done with dogs or birds, they react the same way.

Does this mean that envy is hard-wired into us and that we are destined to feel resentful  any time someone else gets a better deal than we do?

Unfortunately, the answer is probably yes. But if we're doomed to experience envy, probably many times in our lives, that doesn't mean it has to control us. There are many things we can do to cope with our own envy and keep it in its place.

1. Acknowledge that it's a universal emotion

If you're feeling envy, that's OK -- it's perfectly normal. Just remember that you aren't the only one. Everyone, from the poorest beggar to the loftiest billionaire feels it too.

If Bezos – the richest and perhaps most successful entrepreneur in the world – isn't free of envy, there's no hope for you or me.

2. Remember that you don't know the whole story

How often have you felt deeply envious of someone and then gotten to know them and realized that they had more problems than you ever imagined? Most of us have had an experience like this at least once. 

Next time you feel envious of someone, bring that experience to mind. You may not know someone well enough to know their foibles and vulnerabilities. But you can be sure that they have some.

3. Practice gratitude

A regular gratitude practice may be the best antidote to envy there is. This can take many forms. For me, it's my longstanding habit to mentally list three things or people I'm grateful for when I first wake up, before I reach for my smartphone.

For you it might be writing in a gratitude journal or making the effort to thank one person you're grateful to every week. There are many effective gratitude practices out there.

The important thing is to pick one and turn it into a habit – because the more gratitude you feel about the good things in your life, the harder it will be to feel envy for anyone else.

Envy may be a feeling that you can't avoid but you can keep it from dominating your life, and especially the decisions you make about your businesses and your career.

That's an important thing to do. Because, as we've seen from Jeff Bezos and HQ2, if you let envy guide your actions, it will take you in the wrong direction.



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