June 2015

Fatherhood, Present Value and How to Raise a Book

This post as well as the expanded and refreshed pages of the rest of this site is being published on Father’s Day and instead of the long and somewhat technical post I was planning on Personal Rates of Discount, I have decided to talk instead about Fatherhood and how it and Present Value are intimately connected. Specifically, it seems to me that one of the essential aspects of fatherhood is the need to advise and guide children in making good life choices affecting their future and in many cases having to make those decisions for our sons and daughters before they are old enough to make their own way in the world.

And if we use Present Value to make those decisions, all that we are really doing is making decisions in a way that takes into account not just the present moment, but all the possible future moments that might exist as well. We all agree that taking the Now into account is something that is best done holistically, completely and deeply. Well, my view is that you should have the same respect for those future moments as well, and Present Value is simply a really good technique and approach to help you be as complete, deep and thorough as possible in the consideration of those future moments.

Obviously, what I am saying can be equally said of motherhood, but I would suggest that genetics, culture and maybe even biology means that different decisions will be guided or made by fathers versus those made by mothers. I will leave it to others to debate whether one set of choices is more or less concerned about the future and therefore more amenable to Present Value thinking

While today is a day for me to honor my father and the difficult Present Value decisions he made that are still benefiting me, I also want to discuss fatherhood in a much more generalized way and acknowledge all the other “fathers” in my life.

Almost all of us have people in our lives, maybe a favorite teacher in school or a mentor at work, from whom we have received the kind of guidance, support, protection, advice and role modeling that one hopes to get from a father. I am no different, and many of the actuaries who I worked for and whose stories I tell in “What’s Your Future Worth?” were very much father figures for me. These days I am also probably viewed as kind of a “father” to some of the younger people who I work with and/or interact with in other contexts. For quite a while I have gradually been losing my own “fathers” to retirement and worse while at the same time picking up more “sons” and “daughters” along the way. This is the natural way of things I guess, but every once in a while you get surprised

It’s been a long time since I acquired a new “father”, but a little over a year ago, that’s just what happened, though in this case it was more than a single person, rather it was a whole company that adopted me. If authors “give birth” to their books, then the question naturally arises “who is the baby’s father?” For my book the answer is very clear – it was my publisher, Berrett-Kohler.

Berrett-Koehler is a unique publishing company and its mission and values reflect this. They are driven by a desire to publish books that will “help create a world that works for all”. They take that mission seriously and I was surprised and grateful when the Company decided that my ideas and the manuscript that eventually became “What’s Your Future Worth?” could be part of that mission. Part of my surprise was due to the fact that I didn’t even know in any explicit way how my ideas could actually improve the world. Rather I just thought it a shame that the powerful concept of Present Value was understood and being used by such a small group of people (i.e. actuaries) and in such a narrow way. To BK’s credit, my editor Steve saw beyond that and throughout the editing process kept encouraging me to keep paring down and focusing the message in a way so that in the end people could actually use the concept to improve their lives as well as that of the companies they work for and the communities in which they live.

Beyond helping me produce a better and more useful book than I had originally written, I am also grateful to have been taken in by BK because they have a unique philosophy when it comes to relating to the authors that they publish. Specifically they not only treat their authors more as partners and collaborators (vs vendors from whom they are purchasing “content” or worse as customers to whom they are selling “publishing services”), but they actively seek to tap into their authors’ knowledge and expertise, to learn from them, and to incorporate that knowledge into their own company. It no longer surprises me when someone from BK asks me how I would suggest incorporating Present Value into a specific decision that they or BK itself is facing. I have seen them do the same with the ideas of many other of their authors and I truly believe that is one of the key aspects of their business model that allows them to stay ahead of their competition and thrive in an incredibly difficult business that is undergoing dramatic and lightening fast change.

The irony is that while BK may have decided to publish my book because they saw the value of incorporating Present Value thinking into their business model, the fact is that they had been using Present Value well before they ever read my manuscript; manifested in how they choose and relate to their authors, in how they manage and reward their employees and in how the company sets its overall course and strategy. In the end, I expect that I have learned far more from my association with BK than they have from me.

So for all you authors out there hoping and dreaming that one day your book will help make the world a better place, seriously consider Berrett-Koehler as a potential father for your baby (www.bkconnection.com). They will provide great pre-natal care, make sure that the birth is natural and will feed and clothe your child well until he or she is ready to walk, run and maybe fly on their own.