The economics of seasonal serenity

I PROMISED some advice for an efficient and effective Christmas season. I am delighted to report that the Germans have this covered.

Bernd Stauss, an economist and emeritus professor of service management at the Catholic University of Eichstatt-Ingolstadt, has provided a gift to the world, a short volume titled Optimiert Weihnachten: Eine Anleitung zur Besinnlichkeits-Maximierung.

Sadly, no English translation is available, but if one is ever published, I might suggest the title Optimise Christmas! A Guide to Maximising Seasonal Serenity. (No? Well, we can workshop it.)

Prof Stauss outlines the problem: The demands of the Christmas season are so time-consuming and stressful that they leave neither space nor emotional energy for what really matters – the peaceful enjoyment of Christmas spirit and seasonal goodwill.

Thankfully, he also proposes a solution: The use of management and business analysis ideas, explained using a case study method that would be familiar to any newly minted MBA. If you are finding this confusing, a couple of examples may help.

Let us say that Monika (wife and mother in our case study family) wishes to buy a tie for her husband, Eric. She knows not just any tie will do. Thankfully, the market research technique of conjoint analysis was made for this problem.

Monika simply needs to consider the possibilities – fabric, shape and pattern – and use her knowledge of Eric’s preferences plus software to perform a little fancy mathematics. The software spits out the answer: It doesn’t much matter if the tie is slim or wide, polyester or silk, as long as it has a golf-ball pattern on it. Management science to the rescue.

Another example uses the familiar economic method of maximisation subject to constraint – specifically, that across December, Monika wishes to maximise the pleasure of scoffing marzipan fruits and dominosteine (chocolate-coated marzipan, jelly and gingerbread), subject to the constraint that she consumes no more than 26,000 calories’ worth of them.

More fancy maths and the conclusion emerges: Across the Christmas season, Monika needs to limit herself to a total of 500 marzipan fruits and 236 dominosteine.

I used to have a German boss who explained to me that “in Germany, jokes are not a laughing matter”. Nevertheless, you could be forgiven for believing that Prof Stauss is joking.

Of course, he is joking. But there is wisdom behind the humour.

In the context of corporate strategy

Consider his advice for dealing with Christmas card lists. He suggests adapting Boston Consulting Group’s (BCG) four-quadrant “growth share matrix”. In its usual context of corporate strategy, one axis of this diagram measures growth potential and the other measures market share. These two qualities are used to divide up different business lines into “stars”, “cash cows” and the rest.

In the context of the Christmas card list, Prof Stauss suggests an axis for the growth potential of a friendship, and one for the importance of the relationship.

Then simply place every prospective card recipient in the correct quadrant. Friendships that are both important and flourishing are “stars”, deserving of an expensive card and a long handwritten message.

Nascent but promising friendships are “question marks”, worth investing some time to develop. Then there are the “card cows” – stable friendships to be kept ticking along with minimal effort.

The final quadrant includes relationships that are neither important nor promising; these “dogs” should simply be struck off the list.

All very silly, and yet there is a serious idea behind this madcap analogy.

BCG was trying to help corporate strategists think clearly about conglomerates that owned a sprawling array of businesses, some of which had enormous but neglected potential, while others were loss-making or at best a distraction.

The four-quadrant diagram might be an absurdly simplistic way to deal with dozens and dozens of human relationships, but then it was also an absurdly simplistic way to set corporate strategic priorities.

No matter. Sometimes, we fallible humans need a process and some kind of simple intellectual scaffolding.

I’m not sure I’d advise unleashing the growth share matrix on your Christmas card list, but most such lists need prioritising. Writing and addressing cards take time, money and organisation, yet we all know that many cards are barely read, and simply perpetuate an endless, joyless cycle of reciprocal card exchange. If a silly four-quadrant diagram helps you decide that some people should get a handwritten note or a phone call, while others should quietly be removed, then a silly four-quadrant diagram has made the world a better place.

Satirical, but useful

Three other satirical suggestions from Prof Stauss have hidden depths.

First, a fixed budget for Christmas gifts. Many people rely on “layaway” clubs to help them save for Christmas in a disciplined fashion.

Unfortunately, such clubs create a captive audience who can be overcharged, and are subject to collapse without compensation (as happened in the case of Farepak in 2006).

Other households, as the economist Joel Waldfogel notes in his book Scroogenomics, rely on credit cards or other expensive forms of consumer credit. The social pressures to spend money at Christmas are enormous, and one way to contain those pressures is to use a strict budget.

A second useful idea from Prof Stauss is that family members should get together for a pre-Christmas goal-setting session. What are people actually hoping will happen?

Some may want to indulge in the pleasures of food and drink, and others will turn to the spiritual dimension of carols, candles and worship. Some people are looking forward to socialising and partying, while others yearn for quiet hibernation.

Many of us somehow want to cram in all these contradictory moments. There is a lot to be said for a conversation in which every member of the family gets a chance to explain their desires, rather than leaving it to someone – usually mum – to try to guess.

Even better, and easily forgotten: an after-action review. It may be nothing more than five minutes’ reflection with pencil and paper, but it is more than worth sitting down in early January and thinking about what went well and what could have gone better. Put those hard-won lessons somewhere you’ll see them in 11 months’ time.

You may not optimise this year’s Christmas, but at least there is a chance that you’ll improve next year’s. FINANCIAL TIMES