Tuesday, June 27, 2006

Ever feel envious about how much your CEO is paid compared to the rest of your company?

Do you ever feel envious about how much CEO's make compared to nearly everyone else at the companies they run? Charlie Munger (Warren Buffett's partner) thinks it's a big problem and talks about it at: Reuters: CEO Pay at Dangerous Levels .

Munger makes a good point about CEO pay leading to dangerous levels of envy, but he doesn’t go deep enough in his analysis. Envy by itself is uncomfortable, but not dangerous. It’s when envy crosses over to outrage which can then be enraging where destructive things happen. Envy may cause stress, but you can still remain focused on your long term goals and become more determined to reach them in a healthy, vigorous way. When however envy crosses over to being outraged, stress crosses over to distress. When that occurs, you lose sight of your long term goals and instead focus on relieving that distress--- most often in destructive or at least self-defeating ways. The most destructive reaction to outrage is to become enraged in which you either strike out at the world (going postal) or at yourself in career and sometimes even life ending actions. When stress crosses over to distress you have four options:

1. Act out
2. Vent
3. Suppress
4. Exhale

1. Act out – this is a knee jerk reaction where you physically strike out and back at the world and is nearly always destructive and triggers fear in others;
2. Vent – this is where you verbally or in print rant, complain, whine, etc. which is less frightening or destructive than 1, but triggers exhaustion in others and yourself and relaxes neither the situation or the people in it;
3. Suppress – this is where you keep a lid on it which is less destructive than 1 or 2, but over time will cause mental and or physical illness;
4. Exhale – this is where you express the fear, hurt, outrage and angst under the more violent expressions in 1 and 2 to someone who understands, empathizes in a way as to “drain the pus” from where you feel wounded. This enables you to relax and it is the only path out of distress where you open your mind to constructive input from the outside.

The take home message: to succeed, much less survive, in a tough, competitive world, you want to raise the threshold where stress crosses over into distress. To do this, find vehicles that enable you to exhale. Only that will truly calm you down, relax you and open your mind to lasting solutions.

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