New Year’s Resolutions: The Morning After

| Insights

Anyone who has ever made a resolution knows that the strength of their determination fades over time. The important thing is not that your resolve never wavers but that you never quit.

Every January, sales at Lifesum, a weight loss app in which NGP Capital is an investor, jump 3-5 times over December sales. Within thirty days, over half of paying subscribers drop off. Health clubs see a similar jump in memberships in January and an equally predictable decline in usage rates over the next three months.

According to a Marist Poll, 44% of surveyed US adults made New Year’s resolutions in 2015. Nearly half of those goals relate to improved health and reduced weight, with under 50% success rates on these resolutions.

No alt text provided for this image

Are New Year’s resolutions an exercise in futility? Not so fast. Polls focus on recidivism, as it is more eye catching and easier to measure. However, according to a 2010 study by the Journal of American Medical Association of 1869 overweight participants, nearly one third were able to lose 5% of their body weight. Of those who did, 34% were able to maintain at least 75% of their weight loss over five years.

New Year’s resolutions involve two imperatives: the goals, and the habits that reinforce those goals. Ultimately, we are the sum of our habits. In The Science of Self Discipline, Peter Hollins introduces the power of habits in achieving our goals. Good outcomes and high achievement emerge from habits formed at the outset. In his study on How Children Succeed, Paul Tough observes that grit and perseverance are better predictors of success than intelligence. Grit and perseverance emerge from good habits.

"Good outcomes and high achievement emerge from habits formed at the outset."

In his annual letter to investors last week, BlackRock CEO Larry Fink issued the corporate equivalent of a New Year’s resolution: “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.” This mirrors the call last August by The Business Roundtable, a consortium of the CEOs of 191 leading US companies, in its “Principles of Corporate Governance” to serve all corporate stakeholders. Its revised policy highlights a “fundamental commitment to all stakeholders,” including “investing in employees,” “delivering value to customers,” “dealing fairly with suppliers,” and “serving our community,” alongside the principle of “generating value for shareholders.”

This month, two of my portfolio companies reported notable milestones. Xnor sold to Apple, delivering a great return for NGP Capital. I am delighted in this well-deserved result for a superb, highly innovative Xnor team. Another company achieved a major milestone amidst a turnaround that could save up to 2,500 jobs. While the Xnor acquisition may prove more remunerative, the company turnaround would be more personally satisfying and meaningful from a societal perspective.

I am proud to be an investor in several companies that describe themselves as mission-driven enterprises. Juvo offers innovative credit facilities for the unbanked, which comprise nearly half the world’s population. Workfusion makes employees more productive, augmenting their work by automating complex rote tasks. Gigwalk expands employment opportunities through crowdsourcing. Lime, Moovit, Scoop, and Zūm improve commute options making work more accessible and workers more productive.

"I am proud to be an investor in several companies that describe themselves as mission-driven enterprises."

As you develop your personal goals for 2020, reflect on the mandate offered by The Business Roundtable. What can you do within the auspices of your company to make a positive contribution to society? And how can you develop healthy habits and company processes that reinforce your mission?