Topley’s Top 10 – May 03, 2023

1. KRE Regional Bank ETF Breaks to New Lows…50% of Positions in ETF are Shorts.

Dave Lutz at Jones Short interest as a percentage of shares outstanding in the SPDR S&P Regional Banking ETF (ticker KRE) rose to 96% from 74% a week ago, according to data compiled by S3 Partners. When accounting for the synthetic long bets created in each short sale, means almost 50% of positions in the ETF are wagering on a decline. That number climbed from 42% last Tuesday.

2. Regional Bank Market Cap $480B to $100B

3. Nasdaq vs. Small Cap Spread Back to Near Highs.

4. META +100% from Lows…24% Decline in Net Income…2.7% Revenue Growth

What did it report? @Charlie Bilello

2.7% year-over-year revenue growth, a 24% decline in net income, and operating margins moving down to 25% from 31% a year earlier. Hardly anything to get excited about, but all above the low expectations heading into the report.

5. UBER Chart

UBER holds 200day now making run at 2023 previous highs

6. VIX Hit 2021 Lows

7. Vanguard REIT ETF 50week Crossing Below 200week to Downside.

Long-Term weekly chart bearish cross to downside

8. New York vs. San Fran Comeback

New York City subway use is at 70% of 2019 levels, and San Francisco is at 47%, see chart below.

9. Nordstrom Shuts Down in City of San Fran

San Fran Union Square Store Closings

10. The Power of Small Wins

Artwork: Xavier Veilhan, The Big Mobile, 2004, metallic structure, 25 spheres in PVC with diameters from 29.5″ to 137.8″, Exhibition View, 3rd Biennial of Contemporary Art of Valencia

What is the best way to drive innovative work inside organizations? Important clues hide in the stories of world-renowned creators. It turns out that ordinary scientists, marketers, programmers, and other unsung knowledge workers, whose jobs require creative productivity every day, have more in common with famous innovators than most managers realize. The workday events that ignite their emotions, fuel their motivation, and trigger their perceptions are fundamentally the same.

The Double Helix, James Watson’s 1968 memoir about discovering the structure of DNA, describes the roller coaster of emotions he and Francis Crick experienced through the progress and setbacks of the work that eventually earned them the Nobel Prize. After the excitement of their first attempt to build a DNA model, Watson and Crick noticed some serious flaws. According to Watson, “Our first minutes with the models…were not joyous.” Later that evening, “a shape began to emerge which brought back our spirits.” But when they showed their “breakthrough” to colleagues, they found that their model would not work. Dark days of doubt and ebbing motivation followed. When the duo finally had their bona fide breakthrough, and their colleagues found no fault with it, Watson wrote, “My morale skyrocketed, for I suspected that we now had the answer to the riddle.” Watson and Crick were so driven by this success that they practically lived in the lab, trying to complete the work.

Throughout these episodes, Watson and Crick’s progress—or lack thereof—ruled their reactions. In our recent research on creative work inside businesses, we stumbled upon a remarkably similar phenomenon. Through exhaustive analysis of diaries kept by knowledge workers, we discovered the progress principle: Of all the things that can boost emotions, motivation, and perceptions during a workday, the single most important is making progress in meaningful work. And the more frequently people experience that sense of progress, the more likely they are to be creatively productive in the long run. Whether they are trying to solve a major scientific mystery or simply produce a high-quality product or service, everyday progress—even a small win—can make all the difference in how they feel and perform.

Of all the things that can boost inner work life, the most important is making progress in meaningful work.

The power of progress is fundamental to human nature, but few managers understand it or know how to leverage progress to boost motivation. In fact, work motivation has been a subject of long-standing debate. In a survey asking about the keys to motivating workers, we found that some managers ranked recognition for good work as most important, while others put more stock in tangible incentives. Some focused on the value of interpersonal support, while still others thought clear goals were the answer. Interestingly, very few of our surveyed managers ranked progress first. (See the sidebar “A Surprise for Managers.”)

A Surprise for Managers

In a 1968 issue of HBR, Frederick Herzberg published a now-classic article titled “One More Time: How Do You …

If you are a manager, the progress principle holds clear implications for where to focus your efforts. It suggests that you have more influence than you may realize over employees’ well-being, motivation, and creative output. Knowing what serves to catalyze and nourish progress—and what does the opposite—turns out to be the key to effectively managing people and their work.

In this article, we share what we have learned about the power of progress and how managers can leverage it. We spell out how a focus on progress translates into concrete managerial actions and provide a checklist to help make such behaviors habitual. But to clarify why those actions are so potent, we first describe our research and what the knowledge workers’ diaries revealed about their inner work lives.

Inner Work Life and Performance

For nearly 15 years, we have been studying the psychological experiences and the performance of people doing complex work inside organizations. Early on, we realized that a central driver of creative, productive performance was the quality of a person’s inner work life—the mix of emotions, motivations, and perceptions over the course of a workday. How happy workers feel; how motivated they are by an intrinsic interest in the work; how positively they view their organization, their management, their team, their work, and themselves—all these combine either to push them to higher levels of achievement or to drag them down.

To understand such interior dynamics better, we asked members of project teams to respond individually to an end-of-day e-mail survey during the course of the project—just over four months, on average. (For more on this research, see our article “Inner Work Life: Understanding the Subtext of Business Performance,” HBR May 2007.) The projects—inventing kitchen gadgets, managing product lines of cleaning tools, and solving complex IT problems for a hotel empire, for example—all involved creativity. The daily survey inquired about participants’ emotions and moods, motivation levels, and perceptions of the work environment that day, as well as what work they did and what events stood out in their minds.

Twenty-six project teams from seven companies participated, comprising 238 individuals. This yielded nearly 12,000 diary entries. Naturally, every individual in our population experienced ups and downs. Our goal was to discover the states of inner work life and the workday events that correlated with the highest levels of creative output.

In a dramatic rebuttal to the commonplace claim that high pressure and fear spur achievement, we found that, at least in the realm of knowledge work, people are more creative and productive when their inner work lives are positive—when they feel happy, are intrinsically motivated by the work itself, and have positive perceptions of their colleagues and the organization. Moreover, in those positive states, people are more committed to the work and more collegial toward those around them. Inner work life, we saw, can fluctuate from one day to the next—sometimes wildly—and performance along with it. A person’s inner work life on a given day fuels his or her performance for the day and can even affect performance the next day.

Once this inner work life effect became clear, our inquiry turned to whether and how managerial action could set it in motion. What events could evoke positive or negative emotions, motivations, and perceptions? The answers were tucked within our research participants’ diary entries. There are predictable triggers that inflate or deflate inner work life, and, even accounting for variation among individuals, they are pretty much the same for everyone.

The Power of Progress

Our hunt for inner work life triggers led us to the progress principle. When we compared our research participants’ best and worst days (based on their overall mood, specific emotions, and motivation levels), we found that the most common event triggering a “best day” was any progress in the work by the individual or the team. The most common event triggering a “worst day” was a setback.

Consider, for example, how progress relates to one component of inner work life: overall mood ratings. Steps forward occurred on 76% of people’s best-mood days. By contrast, setbacks occurred on only 13% of those days. (See the exhibit “What Happens on a Good Day?”)

What Happens on a Good Day?

Progress—even a small step forward—occurs on many of the days people report being in a good mood. …

Two other types of inner work life triggers also occur frequently on best days: Catalysts, actions that directly support work, including help from a person or group, and nourishers, events such as shows of respect and words of encouragement. Each has an opposite: Inhibitors, actions that fail to support or actively hinder work, and toxins, discouraging or undermining events. Whereas catalysts and inhibitors are directed at the project, nourishers and toxins are directed at the person. Like setbacks, inhibitors and toxins are rare on days of great inner work life.

Events on worst-mood days are nearly the mirror image of those on best-mood days (see the exhibit “What Happens on a Bad Day?”). Here, setbacks predominated, occurring on 67% of those days; progress occurred on only 25% of them. Inhibitors and toxins also marked many worst-mood days, and catalysts and nourishers were rare.

What Happens on a Bad Day?

Events on bad days—setbacks and other hindrances—are nearly the mirror image of those on good days. …

This is the progress principle made visible: If a person is motivated and happy at the end of the workday, it’s a good bet that he or she made some progress. If the person drags out of the office disengaged and joyless, a setback is most likely to blame.

When we analyzed all 12,000 daily surveys filled out by our participants, we discovered that progress and setbacks influence all three aspects of inner work life. On days when they made progress, our participants reported more positive emotions. They not only were in a more upbeat mood in general but also expressed more joy, warmth, and pride. When they suffered setbacks, they experienced more frustration, fear, and sadness.

Motivations were also affected: On progress days, people were more intrinsically motivated—by interest in and enjoyment of the work itself. On setback days, they were not only less intrinsically motivated but also less extrinsically motivated by recognition. Apparently, setbacks can lead a person to feel generally apathetic and disinclined to do the work at all.

Perceptions differed in many ways, too. On progress days, people perceived significantly more positive challenge in their work. They saw their teams as more mutually supportive and reported more positive interactions between the teams and their supervisors. On a number of dimensions, perceptions suffered when people encountered setbacks. They found less positive challenge in the work, felt that they had less freedom in carrying it out, and reported that they had insufficient resources. On setback days, participants perceived both their teams and their supervisors as less supportive.

To be sure, our analyses establish correlations but do not prove causality. Were these changes in inner work life the result of progress and setbacks, or was the effect the other way around? The numbers alone cannot answer that. However, we do know, from reading thousands of diary entries, that more-positive perceptions, a sense of accomplishment, satisfaction, happiness, and even elation often followed progress. Here’s a typical post-progress entry, from a programmer: “I smashed that bug that’s been frustrating me for almost a calendar week. That may not be an event to you, but I live a very drab life, so I’m all hyped.”

Likewise, we saw that deteriorating perceptions, frustration, sadness, and even disgust often followed setbacks. As another participant, a product marketer, wrote, “We spent a lot of time updating the Cost Reduction project list, and after tallying all the numbers, we are still coming up short of our goal. It is discouraging to not be able to hit it after all the time spent and hard work.”

Almost certainly, the causality goes both ways, and managers can use this feedback loop between progress and inner work life to support both.

Teresa M. Amabile is a Baker Foundation Professor at Harvard Business School and a coauthor of The Progress Principle. Her current research investigates how life inside organizations can influence people and their performance, as well as how people approach and experience the transition to retirement.

Steven J. Kramer is an independent researcher, writer, and consultant in Wayland, Massachusetts. He is a coauthor of “Creativity Under the Gun” (HBR August 2002) and “Inner Work Life” (HBR May 2007). Their book The Progress Principle: Using Small Wins to Ignite Joy, Engagement, and Creativity at Work is forthcoming from Harvard Business Review Press.