Leon Shivambers Blog

Why I Love This Time Of Year - Happy New Year 2012

2012-01-01T06:00:00.000+04:00

"A Morning Wish" by W. R. Hunt

The sun is just rising on the morning of another day, the first day of the new year. What can I wish that this day, that this year, may bring to me?

Nothing that shall make the world of others poorer, nothing at the expense of others; but just those few things which in their coming do not stop with me but touch me rather, as they pass and gather strength:

A few friends who understand me, and yet remain my friends.

A work to do which has real value without which the world would feel the poorer.

A return for such work small enough not to tax unduly anyone who pays.

A mind unafraid to travel, even though the trail be not blazed.

An understanding heart.

A sight of the eternal hills and unbelting sea, and of something beautiful the individual hand has made.

A sense of humor and the power to laugh.

A little leisure with nothing to do.

A few moments of quiet, silent meditation. The sense of the presence of God.

And the patience to wait for the coming of these things, with the wisdom to know them when they come.

It's a new day, it's a new year! In the blink of an eye, we watched 2011 disappear into the distant memories, and welcomed a brand new year, 2012.

Once again, I got to wondering what it was about this change each year that makes us all behave so differently? Indeed, it's not just the one day. Starting in November and well through the middle of January each year I notice people around me, and even in myself, a kind of reflective, thoughtful, generous sense that is not there through the rest of the year (maybe for short spurts, but not as thoroughly).

Maybe it's because Thanksgiving is celebrated in late-November in the USA. While it was originally a celebration of the harvest and a time to rejoice after much hard work, it has become more broadly a special time for families and friends to get together to give thanks for the many blessings we have received. And it's always a festive occasion!

Or maybe it's because our Jewish friends celebrate Hanukkah, during which 8 days of lighting the Menorah, they give thanks and praises for miracles, wonders and salvation! Truly a blessed occasion.

Or maybe it's because on December 2nd, 2011, we watched the youthful UAE celebrate it's 40th national day with such pride and vigor. The events celebrated independence from the United Kingdom and the eventual formation of the union that is today the UAE. And, is it ever invigorating and refreshing as we had the honor of participating in the 40 days of celebration. Visionary leadership, pride in the history and culture, and a passion for redefining what it means to be a modern Arab nation were all on display. It's really inspiring to see what can be achieved in a short time as the UAE has in just a short 40 years!

Or, maybe it's still inspiring that we celebrate some 2000 years later, the birth of a baby Jesus. The exact date of his birth is no longer meaningful, but the life and death of Jesus has made such dramatic changes to the course of civilization (both good, and in cases due to perversion of his beliefs also bad). Christmas time has grown over the years to be another occasion to reflect on blessings, to spend time with friends and family to celebrate what can be achieved, to give gifts and generally to show care. It's truly a beautiful occasion that so energize the kids, whose enthusiasm has to be infectious to every adult. I have to admit each year looking forward to opening my christmas gifts.

Maybe it's just as simple as the clock and calendar change that naturally occurs as one year fades and another starts. The amazing thing is that it happens each year, and each year it brings an opportunity to wipe the slate clean on the past, and look forward hopefully to the future (the new year). New resolutions, and the belief that we can start over, achieve more, reach farther, is truly infectious and real. I know that every year on January 1, I feel like a new person.

Maybe it's the smart commercial mavens who have figured out how to market to us so that we end up buying more cards, gift wraps, candies and assorted gifts than any other time of the year. Despite the truly commercial aspects of the season, true meaning still comes out, and as a student of economics, I am still awed by the power of demand consumption as an engine for growth. So, any excuse to be generous and spend can't be all that bad if it helps drive commercial growth and economic independence around the world.

Or, maybe it's just that a guy like me needs an excuse each year to reach out to old friends to say I am sorry we have not been in touch more frequently during the year. Thank you for being a good friend and for the part you had to play in shaping my history.

Whatever it is, it does not matter where the inspiration comes from, and I think in fact it is all of the above, it's a fabulous time to pause and take a deep breath, reach out, be generous, be appreciative, be hopeful and plan for even greater successes. I know that I have been blessed with incredible experiences, wonderful friends and beautiful family. It's hard not to look at the world and be awed by the possibilities, especially when looking back at where we have come from.

Let's pledge to make 2012 the best year yet, and I hope that many years from now, we will look back and see that 2011 was the lowest point of a series of successful adventures that followed. Happy New Year!

Why you are likely to lose money if you follow some market analysts!

2011-11-25T15:31:00.001+04:00

There are legions of websites, blogs, newsletters and firms peddling advice on how to trade or invest better in the stock market. They are driven by fundamental analysts, stock chart technicians, behavioral analysts and a variety of others who routinely look to the past, or build models of the future, on which basis they profess some insight on the probability that their chosen investment will either go up or down. They are hard to find, but some of these are quite logical, grounded analysis and worthy of paying attention to. Yet another group sound like astrologists, not making sense, or making promises that are too good to be true. These are the easy ones to avoid. The most difficult group are those that sound quite informed and use rational analysis yet reached flawed conclusions. This latter group will make you lose money, if you confidently follow their approach or advice.

Let me give you an example of this kind of analysis:

The author of this blog has identified that this year, the day before Thanksgiving was a losing day. He then conducts an analysis to to see when that happened historically and what the market did on the following trading day. He finds 10 occasions where the day before Thanksgiving was lower, and 3 of those 10 times, the following day the market was also lower, while 7 of the 10 times, the following day the market was higher. One would surmise therefore that there is a bullish bias that this next day upcoming should also be up. After all, 7 of the 10 times when this happened in the past, the market was up the following day. He also indicates that fridays after Thanksgiving historically, not just the ones that follow a down day, have been bullish. Moreover, he circles the two instance where the day before Thanksgiving was lower by more than 1% (which occurred this year), and those suggest that the following day could be very good winners.

The analysis shows that on average, the down days were down by 0.64%, while the up days gained 0.81%. And because there were more up days than down days, the average of all the occurrences was a positive 0.35%. This 0.35% positive return is a good tradable return from a statistical expectancy point of view. But is that the right way to look at this data?

I think not. Let me use an analogy to explore the concept. Suppose you were in the business of flipping coins (the market going up or down each day is equivalent to flipping a coin since it rarely stays the same, which would be equivalent to a coin landing on the edge). And suppose I told you that on reviewing your previous pattern of coin flips, we found there were 10 days on which you had flipped 5 consecutive heads. Further that when we reviewed what happened afterwards that 7 of the 10 times after you had flipped 5 consecutive heads, on the following coin flip you also got heads, while only 3 were tails. Now we have just gone five days in a row where you have flipped 5 heads. Would you bet $2.00 to win $1.00 that the next flip is a heads? How about $1.25 to win $1.00? The pattern analysis suggests you should, if you think there is a 70% chance of winning $1.00 (flipping a head) while there is a 30% chance of losing $2.00. And if you are using that reasoning, then you should be much more amenable to the $1.25 bet. But my guess is that you probably won't take either bet.

The instinctive answer is correct, even though the rationale many people give may not be. Most people, who did not pay attention to the statistics classes, say that after they have seen a streak of five heads that it is more likely that they will see a tails. Some might even be inclined to bet $1.25 to win $1.00 that the next flip is a tails. There is some real cognitive dissonance going on here, and it goes to show why people looking at statistical data or patterns might be misled. The essence of the problem is in figuring out the likelihood of your next flip being heads, or the market going up. And the simple answer is that it is equally likely that the next coin flip will be a heads or a tails (unless of course the coin is weighted on one side more than the other). Similarly, the market is equally likely to go up the next session, as it is to go down.

So what is the likelihood that the market would be up on the day after thanksgiving when it was down the day before? 50%! And what happens to this fine analysis when we look at the expected results based on those probabilities? We know that on average it was down .64% on the losing days and up .81% on the winning days. Therefore, one might surmise that, on average, there is a 50% chance we could be up .81%, and a 50% chance we might be down .64%. The resulting expectancy is .08% up. This is an expectancy so negligible, it might not even pay for the commissions, and certainly is not trade-able.

But, that chart above, and the analysis was so compelling with so many positives and so few negatives. Just as compelling as those five heads in a row pattern should have been to you. Analysis of the past make you more or less confident about rolling a heads next time, when they should not. If the market goes up today, it will be by chance and rarely will it have anything to do with what happened yesterday or two days ago!

Why was the iPhone delayed from the typical June refresh?

2011-09-17T20:10:00.000+04:00

Much has been written about the next version of iPhone, that was not launched in the typical Apple June refresh. Most of the articles written have been rumors and speculation about what the new phone will look like or what technology will be included. I call this the "what" stories. They include stories that evaluate purported component changes or screen saver manufacturer design changes to conjure up new apple specs such as bigger home button, different screen sizes, etc. In the meantime, the more important question (at least from an investor standpoint) goes unaddressed.

Which Version Of Myself?

2011-07-24T00:17:00.000+04:00

I was driving in my car the other day, listening to music piped from my iPod as usual. It's set to shuffle so I always get a changing playlist. Suddenly a tune from David Byrne, an old favorite, came bursting into my consciousness. Now, for those of you too young to remember, David was the brilliant founding member of critically acclaimed "Talking Heads". He is a pure artist know for his quirky sound, mind bending lyrics and collaborations with the likes of Twyla Tharp and Brian Eno. And, if you don't know who they are, then I am afraid you missed a lot of the "New Age," experimental sound and modern dance history.

Anyway, back to my story. So David in his classical style belts out the line: "I am just an advertisement for a version of myself"!

I need better advice!

2011-07-17T21:51:00.000+04:00

I come to my advisors warts and all.

My first advisor points out all the warts that can be seen. I have learned nothing new.

The second advisor points out that some of my warts are ugly. I have not learned anything really new, but am now self-conscious.

The third advisor points out my visible and hidden warts. At least I have learned something new, but have not gotten closer to value.

A fourth advisor points out that some of my warts are deadly. Again I have learned something new, but am now scared out of my wits.

The fifth advisor points out visible and invisible warts, identifies those that make me look worse, and those that are deadly and leads me down a path of surgical removal and repair.

Why is it that in business or personal affairs, when we bring someone a proposal or come looking for advice we get one of the first four advisors? Why is it so rare for our advisors to not only diagnose, but recommend a corrective path? That is what a great advisor does.

To be really helpful, contribute a solution, don't just point out what's wrong!

Wow!

2011-05-22T22:30:00.001+04:00

There are some images that have such an effect on you that the only thing you can do is say wow! How did the photographer get such an amazing image? What's your reaction?

Follow the link to see more wow images of the World At Night!

Matt Ridley: Down with Doom

2011-05-21T22:51:00.000+04:00

By then I had begun to notice that this terrible future was not all that bad. In fact every single one of the dooms I had been threatened with had proved either false or exaggerated. The population explosion was slowing down, famine had largely been conquered (except in war-torn tyrannies), India was exporting food, cancer rates were falling not rising (adjusted for age), the Sahel was greening, the climate was warming, oil was abundant, air pollution was falling fast, nuclear disarmament was proceeding apace, forests were thriving, sperm counts had not fallen. And above all, prosperity and freedom were advancing at the expense of poverty and tyranny.

[From Matt Ridley: Down with Doom: How the World Keeps Defying the Predictions of Pessimists]

There is a reason to avoid hospital visits!

2011-05-03T22:19:00.001+04:00

Quote from SuperFreakonomics:

So it may be that going to the hospital slightly increases your odds of surviving if you’ve got a serious problem but increases your odds of dying if you don’t. Such are the vagaries of life.

- Posted using BlogPress from my iPad

Making Sense of Investment Advice

2011-04-30T23:58:00.000+04:00

The miracle of "compound interest" has been well documented. Investing to leverage this power can be richly rewarding if managed properly. Done poorly, one can easily create great damage to a portfolio of assets. And over the last twenty years or so I have done both.

Being the curious type, and like many personal investors, I have been on a quest to find that "holy grail" of investing, the practice, process, method, newsletter, chart or whatever, that would lead to incredible returns. I have read voraciously, analysed, tried, tested, listened to others, and yet the holy grail remains elusive. That said, I have learned a number of important lessons along the way, which are well documented in books written by some amazing students of the market and great investors, like John Bogle, Ken Fisher, Joel Greenblatt and Benjamin Graham. I thought I should share some of these in the hope that you could avoid some of the pitfalls. Here are some of the lessons I have learned:

Our Absurd Budget Debate

2011-04-09T22:09:00.001+04:00

Michael Ramirez via IBD:

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[From Our Absurd Budget Debate]

Gobbledegook Or Just Plain Nonsense?

2011-01-09T20:28:00.001+04:00

Friday, January 07, 2011
Say What?

From an actual Wall Street “research” report this morning—and, before you ask, no, this is not from “The Onion”:

We are upgrading 3M to Neutral as capitulation on the growth story and 2011 estimates should limit relative downside and make 3M once again somewhat of a defensive stock. While the negative dynamic of positive sentiment has turned modestly more favorable, stubbornly bullish consensus estimates for ’12, along with risks at Healthcare, keep us from moving to Overweight.

Anyone care to venture what this means?

Jeff Matthews
I Am Not Making This Up
[From Jeff Matthews Is Not Making This Up: Say What?]

Maybe as I get older, I am less tolerant of long convoluted explanations. Or maybe I am beginning to really understand the plain beauty of a KISS ("Keep It Simple Stupid") strategy. But after reading this one, I have to admit that I could not understand what the writer intended.

Globalisation: The redistribution of hope | The Economist

2011-01-09T20:12:00.000+04:00

The redistribution of hope
Optimism is on the move—with important consequences for both the hopeful and the hopeless
Globalisation Dec 16th 2010 | from PRINT EDITION

“HOPE” is one of the most overused words in public life, up there with “change”. Yet it matters enormously. Politicians pay close attention to right-track/wrong-track indicators. Confidence determines whether consumers spend, and so whether companies invest. The “power of positive thinking”, as Norman Vincent Peale pointed out, is enormous.

For the past 400 years the West has enjoyed a comparative advantage over the rest of the world when it comes to optimism. Western intellectuals dreamed up the ideas of enlightenment and progress, and Western men of affairs harnessed technology to impose their will on the rest of the world. The Founding Fathers of the United States, who firmly believed that the country they created would be better than any that had come before, offered citizens not just life and liberty but also the pursuit of happiness.

Not that the West was free of appalling brutality. Indeed, the search for Utopia can bring out the worst as well as the best in mankind. But the notion that the human condition was susceptible to continual improvement sat more comfortably with Western scientific materialism than with, say, the caste system in India or serfdom in Russia.

Now hope is on the move. According to the Pew Research Centre, some 87% of Chinese, 50% of Brazilians and 45% of Indians think their country is going in the right direction, whereas 31% of Britons, 30% of Americans and 26% of the French do. Companies, meanwhile, are investing in “emerging markets” and sidelining the developed world. “Go east, young man” looks set to become the rallying cry of the 21st century.

[From Globalisation: The redistribution of hope | The Economist]

I grew up reading "The Economist". I remembered looking forward to the addition of each new edition of the magazine to the library of my school in Guyana. It was the source of unbiased world news, analysis and opinion. Back then, there were not many choices, but the thing that impressed me most, was the way they covered the stories that mattered. An unbiased, well written, thoughtful analysis of the events around the world. Since then, I have only grown fonder and more appreciative of this journalistic "tour de force". I don't always agree with their viewpoint, but have never felt they were pushing an agenda. All this to say, "The Economist" is among one of my most highly recommended readings. Click on the link above to see what I mean by a well written article. As an unabashed optimist, I just love the last paragraph. You will just have to check it out yourself!

Happy New Year!

2011-01-01T00:30:00.000+04:00

Happy New Year! Three words oft repeated during the holiday season. A greeting to friends, family, and even strangers, it is heard so frequently as to appear vacuous or inane. Yet, upon reflection, there is so much more going on here psychologically. At least it appears that way to me.

The new year seems like a wonderfully refreshing reset. A time to take score, to reflect in the past, and to consider the future. The optimism it engenders always invigorates to further success, be it world peace, more regular additions to a blog, weight reduction, a new job if one has been unemployed, better investment returns, or myriads of other personal wishes. Amazingly, it does not seem to matter, the kind of year just ended. It could have been a lousy or an outstanding year, yet the season wishes and impressions are so powerfully motivating that it's easy to feel that the following year can be even better.

I know that the reality bug slips in quietly and quickly after the season has run it's course, bringing with it a dampening effect, trying to deflate our optimism. And I know that many resolutions frequently end up forgotten. Nevertheless, the potential for goodness is so great, and the opportunity for success so awesome, that it is worth going through this uplifting process. After all, success is better achieved through optimistic action than pessimistic inaction.

So, to all I say, Happy New Year! May you do something that makes this year your best yet!

- Posted using BlogPress from my iPad

Elightened service - Wining a customer for life!

2010-05-03T01:25:00.001+04:00

I have written previously that service as a discipline appears to be under seige. Airlines charging for a checked bag, and considering charges for carry-ons or using the toilet on board, are all signs of this trend. The race is on to penny-pinch the most valuable asset of any business, it's customers.

Like me, you have probably taken your car to a repair shop or dealer to have something small fixed, only to be told of the myriad of other things wrong. And many of the repairs sound dire, as if you should not dare get back in your car, for the mortal danger you will face. After one repair shop suggested replacing my windshield wipers, one week after they had been replaced and were in perfect condition, it became evident that some of these recommendations were commercially motivated, and not intended to save my life, or what I really needed. Have a few of these experiences, and you begin to question every piece of advice or service interaction. Are they really thinking about what is best for you?

A recent experience though, has restored my faith in enlightened management and service approach to customers. Some companies really do get it, and they are carving out massive equity with their customers.

I took a trip to Dubai recently. When we landed and I took my Tumi bag out of the overhead, the handle fell off. On my return home, I took some photographs and sent a note one evening, around 9pm, to the folks at Tumi. By 11am the next day I had a reply from the Director of Marketing. Mikal had looked up where I lived, where their stores and service center were in relation, and laid out three options for me to have my bag sent to be repaired. It would be my choice of what was most convenient for me! My bag was shipped to the Tumi service center, and I had several very pleasant conversations with Sharon, who runs After Sales Service. Sharon and I talked about my travel habits and use of the bags and she helped me upgrade to a newer bag, with a design more suited to handle the rigors of my travel schedule. Even though in short supply, Sharon was able to secure and ship the bag to me that day. I got the new bag in time for my next international trip.

Time to think about shortages?

2010-02-26T09:19:00.001+04:00

Despite their pivotal role in the high technology value chain, electronic components are essentially a cyclical industry akin to older markets like steel and housing. As with steel and home building, growth expansion requires significant skills and capital expenditures, thus additions and reductions tend to be uneven and disruptive. And, like those industries, the willingness to get caught up in trend extrapolation has a powerful allure. Every participant in the chain gets caught up in the frenzy, thus the acceleration to the top and the inevitability of the cycle.

What happened to service?

2009-08-24T07:18:00.000+04:00

Your most unhappy customers are your greatest source of learning. - Bill Gates

It's not the employer who pays the wages. Employers only handle the money. It's the customer who pays the wages. - Henry Ford

More business is lost every year through neglect, than through any other cause. - Jim Cathcart

There is only one boss - the Customer. And he can fire anybody in the company from the chairman on down, simply by spending his money somewhere else. - Sam Walton

In the early ‘80s, Scandinavian Airlines (SAS) was having a tough time competing. Jan Carlzon, then president of the airline wanted to focus on improving services among other areas he found broken. In 1984 he coined the phrase “moments of truth,” in a book of the same name, to describe those incredibly valuable service interactions customers have with companies. His strategy was to manage, in a unique way, those “never-to-be-repeated opportunities” to distinguish SAS from its competitors. And it worked; SAS was turned around in record time and became one of the best-run airlines around the world. Moments of truth became the mantra of those focused on customer service. Companies like Nordstrom became famous for their fabulous treatment of customers, and their results showed the benefits of service as they were able to generate better than average profit and revenue growth than their competitors.

Nearly two decades later, after Billions of investments in new Customer Relationship Management (CRM) and other service systems, it seems like many of the important lessons learned have been forgotten or ignored. Interactions with companies today feel much more like “moments of denial” than opportunities to win a customer for life. What happened? Was Jan wrong? Is customer service irrelevant in this seemingly impersonal internet era?

Reverse Auctions and Supplier Relationships

2009-05-31T08:50:00.000+04:00

Reverse auctions are almost ubiquitous and are being used daily to drive purchasing costs down in a variety of categories of products and services. And, the results are stunning. That is why its use has become a standard in many North American procurement organizations.

Recently I was attending a meeting of senior procurement executives during which the discussion topic focused on “myths of Reverse Auctions”. The presenter postulated that the belief “reverse auctions damaged supplier relationships,” was a myth. Members of this august group, including the procurement leaders of some of the largest and most influential North American companies, generally agreed. Rationale given included auctions were merely a device to discover “market price”, auctions are not just about getting the lowest price, in fact auction algorithms have been created to factor in other variables such as service and quality in addition to cost. And, incumbents typically win 70% of the auctions anyway.

As the lone dissenter on this question, I wondered whether the facts would support the point of view that relationships were not hurt with auctions. After all, every one in the group agreed that they did not want their company to be subject to auction by a customer.

Do you believe what you see, or see what you believe?

2008-11-16T21:51:00.000+04:00

My teenage daughter, like most kids her age, loves the look of fast sports cars. She is particularly amused by the fact that she shares the same name with a Lotus sports car, the Elise.

One morning recently, as I was driving her to the school bus stop, she excitedly pointed out the car in front of us. "Look dad, it's an Elise." Until then, she had only seen the car in magazines and online. I gently pointed out that the car was not an Elise, but a Corvette. But she was not to be deterred, as she insisted it was an Elise. That is, until we pulled up next to the car and she could clearly see the Corvette badge.

Later I reflected on this incident and wondered what it was that made a teenager who had never seen (or had a live experience with) a Lotus Elise, believe her own mental image of the car more than the feedback from someone three times her age, who has actually seen (had an experience with) the car in question. Was it youthful self confidence, or worse? And, I wondered how often the same phenomena occurred in business settings. I have seen managers reviewing market data and completely disagreeing on the potential opportunities. I have seen financial data which suggested financial deterioration, interpreted in a favorable light. And I wondered, were these people really seeing the same things?

New Age Job Survival

2008-09-30T06:45:00.001+04:00

Daniel H. Pink has written a terrific book called "A Whole New Mind - Why Right-Brainers Will Rule The Future". I recommend it to anyone who is concerned about job survival in this new age.

Daniel postulates that the world has evolved through three distinct ages over the last 150 years - The Agricultural Age, The Industrial Age, and The Information Age. More importantly, he speculates we are entering what he calls The Conceptual Age. One which favors "Right Brainers" (creators and empathizers) over the traditional "Left Brain Skills" (analysts).

We have arrived at the new Conceptual Age, due to three major forces which have essentially changed the rules of competition. These forces are Game changers on a global scale, which Daniel describes as Abundance (excess of available choices), Asia (dramatically lower cost), and Automation (machine driven productivity). To survive in this new age, Daniel argues, you must ask yourself three questions:

1. Are you doing something that cannot be done cheaper by someone overseas?

2. Are you doing something that cannot be done faster by a computer?

3. Are you offering something that is in demand (differentiating) in an age of abundance?

If you answer yes to these three questions, then you are safe (for some time). Answer No, and you are in deep trouble.

I have argued on this blog ("Lifetime Employment - Apply Here") that only employees and companies capable of changing faster than customer choices are changing will survive. The fact is, low cost labor (Asia), and massive productivity improvements (Automation) have created far more choices (Abundance). And, the information age has enlightened consumers as to the availability of these abundant choices. The result is a need for more differentiation. Products have to stand out, they must have soul ("Are you obsessed about Quality? Do your products have soul?"). Similarly, new skills are required for you to stand out.

Read the book to find out which skills Daniel Pink believes will be more important in the future!

"A Whole New Mind: Why Right-Brainers Will Rule the Future" (Daniel H. Pink)

Where does talent come from?

2008-09-16T08:48:00.001+04:00

Ericsson and his colleagues have thus taken to studying expert performers in a wide range of pursuits, including soccer, golf, surgery, piano playing, Scrabble, writing, chess, software design, stock picking and darts. They gather all the data they can, not just performance statistics and biographical details but also the results of their own laboratory experiments with high achievers.

Their work, compiled in the "Cambridge Handbook of Expertise and Expert Performance," a 900-page academic book that will be published next month, makes a rather startling assertion: the trait we commonly call talent is highly overrated. Or, put another way, expert performers — whether in memory or surgery, ballet or computer programming — are nearly always made, not born. And yes, practice does make perfect. These may be the sort of clichés that parents are fond of whispering to their children. But these particular clichés just happen to be true.

Ericsson's research suggests a third cliché as well: when it comes to choosing a life path, you should do what you love — because if you don't love it, you are unlikely to work hard enough to get very good. Most people naturally don't like to do things they aren't "good" at. So they often give up, telling themselves they simply don't possess the talent for math or skiing or the violin. But what they really lack is the desire to be good and to undertake the deliberate practice that would make them better.

Excerpt From A Star Is Made - New York Times referencing the research of Dr. Anders Ericsson

When we first moved to Florida in 2004, our good friend Barbara Wall, who runs the local Prudential office, invited us to lunch at the Eau Gallie Yacht Club. While there, she introduced our daughters (then 6 and 9) to a wonderful young girl just ten years old. Bre was friendly, charming, beautiful and made it really easy for our daughters to make the transition to their new home. It turns out, Bre Morgan is also a very talented young artist. In 2006 she won a national singing contest, and has recorded her first album at age 13.

The same year we first met Bre, my cousin Wilfred and Juliet welcomed their first grandchild. Kaitlyn is a lovely young girl born to wonderful parents, Allison and Reuben Maher. It's 2008, now just four years later, and this last week, Kaitlyn was selected to be among the top 10 of the popular show America's got Talent.

Ten years, four years, charming, beautiful and loaded with talent. But, where did the talent come from? Was their talent born, or made? I suspect these two young ladies were born talented, but the good news for the rest of us can be found in the work of Dr. Anders Ericsson. He attributes most expert performance to something he describes as "deliberate practice". In other words, "practice does make perfect". Turns out, you are more likely to practice something if you enjoy doing it. In case you are wondering, these two young ladies, they love what they do, and they practice a lot.

Want talented performance at work? Then your teams must love what they do, and they must practice at getting better!

Importance of Education to your future

2008-09-16T07:39:00.001+04:00

Education is the key to prosperity. There’s simply no way to sugarcoat that fact. Communities without a strong educational foundation — good public schools, community colleges, a local college or university — are at a severe disadvantage in the competition for good-paying jobs with a future.

Employers need intelligent workers who can grasp new ideas and concepts quickly, who can think for themselves, who can visualize the big picture. It used to be that a high school diploma was the ticket to the middle class. Nowadays, one in four adults over the age of 25 possesses at least a bachelor’s degree, and in some metros — Boulder, Colo., for example — that figure exceeds 50 percent.

From Research Studies: Knowledge Worker Quotient

Are you obsessed about Quality? Do your products have soul?

2008-09-07T23:31:00.001+04:00

The Japanese are particular about things; they understand the "soul" of things.

We aim to develop products with soul. The idea that products have soul is perhaps only understand by the Japanese, the French and the Italians. The reason why the Japanese understand it is, I think, because they have such a long history of tradition. There are Japanese craftsmen who spend years perfecting lacquerware. Others protect the 1,500 year tradition of using red dye from the safflower. Others still are attempting new experiments using 21st century technology with traditional colors. And there are many people who are called "living national treasures". The Japanese are particular about things. They like to embark on new adventures and think about the next idea while still retaining the soul of things. Of course, not all consumers are "living national treasures". But this kind of thing is understood at DNA level. The Japanese are sensitive to things. They understand the goodness of our products, beyond their appearance or brand image. And for that reason, I think they are an important market for us.

Let's say you buy a garment and a thread comes out of it. The French would cut the thread off themselves, then wear the garment. An American would wear the garment without noticing the thread. The Japanese would take the garment back to the shop and complain that it was damaged. Japan is a market that makes such demands.

Richard Collasse, then President of Chanel, Japan addressing the Tokyo International Forum

Japan is roughly the size of Montana in land area, and has about 127 million inhabitants (roughly one-third of the USA). And, the Japanese are obsessed with luxury goods. They consumed 41% of the worlds luxury sales in 2006. Thus, when the Japanese customer is not satisfied with threads hanging from their newly purchased outfits, it makes sense for the luxury goods companies to pay attention.

The Japanese define quality in two ways - atarimae hinshitsu and miryokuteki hinshitsu. The first term atarimae hinshitsu, refers to the expectation that the item works the way it was intended. Miryokuteki hinshitsu means "bewitching" or "enchanting quality" and refers to the desirability or aesthetic appeal of the product. In essence, by focusing on both, you ensure your product works the way a customer wants and is also desirable to have (it has soul).

If your customers won't tolerate hanging threads, should anyone on your team? Learn from your most demanding customers, and ensure everyone in your organization is focused on exceeding those changing expectations. This is the only way I know to drive long term sustainability.

Fix your shrinking knowledge quotient

2008-09-06T23:13:00.007+04:00

Every hour of every day I'm learning more

The more I learn, the less I know about before

The less I know, the more I want to look around

Digging deep for clues on higher ground

From UB40 - Higher ground Lyrics

I love listening to UB40, a British reggae band formed in the 70's. Their songs are usually light hearted affairs sung to a catchy melody which reminds you of being on a Caribbean beach vacation. Then I listened to the lyrics of the song "Higher Ground". Now that was more serious stuff than I was accustomed to. I did not know what to make of it.

Over the years though, the meaning has become clearer to me. Friends warned me that, the more I learned the more I would not know. Recently I came across some stunning statistics on knowledge expansion and information overload. Did you know for example, that:

It is estimated that one weeks worth of New York TImes contains more information than an individual would have encountered in a lifetime in the 18th century.
IDC estimates 160 Exabytes (160 Billion Gigabytes) of data was generated in 2006, more than was generated in the previous 5000 years.
It’s estimated that the amount of stored information is growing at a rate of 30 per cent a year and that the US generates about 40 per cent of that. The researchers estimated with a world population of 6.3 billion that would mean 800Mb of data each and less than 10 per cent of the world’s population have access to computers or the internet.
Technical information is doubling every 2 years.

The stunning result of this exponential information explosion is that your personal knowledge quotient (and mine) is shrinking.

Fortunately, there are ways to ensure your knowledge does not become obsolete. An important action you must take is to continue to develop what you know personally. More important, you need to recognize that the rate of information growth is exponential, while your personal information growth is more likely to be linear (based on what you read, touch, experience etc.). Therefore, you should focus on capitalizing on the network effect. In our increasingly connected world, your network knowledge quotient is perhaps more important than your personal knowledge quotient. For it is your network, what it knows, and your ability to leverage that knowledge which is becoming increasingly important.

The most effective ways to build your network knowledge quotient is effectively increasing your network. Stuff it with the smartest people you know and tap into their knowledge a much as you can. Somewhere out there is n answer to any question you might have. Do you know how to find it?

Lifetime Employment - Apply Here

2008-08-29T07:42:00.004+04:00

Since the 1950s, Japan's labor markets have been characterized by several distinctive features. Perhaps the most notable among them is "lifetime employment," the practice at large firms of hiring workers directly out of school and retaining them until a mandatory retirement age (originally age 55, now around 60 for most companies).

From Job Security in Japan: Is Lifetime Employment on the Way Out? - Brookings Institution

Lifetime employment used to mean staying with a company until retirement. However, as the workplace has evolved, few workers are interested in staying at a single company until retirement. The chart below shows how dramatically this effect has played out in different countries around the world (with Americans staying on average only 4 years per job).

The question of lifetime employment has therefore shifted to the possibility of being employed (at any company) until expected retirement. The challenge of staying relevant in the workforce has been exacerbated by concerns over the rapid shift of manufacturing and service sector jobs to lower wage regions around the world.

What can you do to stay employed, and not become a victim of these dynamic shifts in the global economy?

For my answer, I build on my three fundamental beliefs, except replacing company with employee. Thus:

1. Customers always choose the best available

2. The best is always changing

3. Only employees capable of change are sustainable.

In simple terms, your company can't guarantee you a job, your government cannot, not your union rep, nor your boss. Only customers guarantee jobs, and only so while you are creating value for that customer.

Who is your customer? Today? In the future?
What does that customer want? Will want?
What skills do customer needs imply are necesary and how will they change over time?

To stay relevant and experience lifetime employment, you must have answers to these questions and a personal development plan that allows you to change faster than your customers (employers) are changing. That I argue is the only way to ensure you have lifetime employment!

Fundamental Beliefs - Guiding principles for strategy

2008-08-26T07:01:00.005+04:00

I am frequently asked about the most important factors that shape my views on strategy. And to that question, my answer is always simple. I am driven by three fundamental beliefs:

1. Customers always choose the best available

What is best is defined by each customer. It could be price, availability, specifications , or some other variable. Whatever the utility curve the customer is using to determine their preference, they will choose the best they can afford, from what's available, wherever they can find it.

2. The best is always changing

The best changes over time because customer preferences change, what competitors offer changes, or because what companies provide to their customer changes.

3. Only companies capable of change are sustainable

The inevitable conclusion is that companies must change. And, they must change faster than the customers are changing in order to stay relevant.

For me, the only constant is change!

Innovation

2008-08-25T09:10:00.001+04:00

Innovation is not about fixing what is broken, it's about breaking what is "fixed"!

Reinterpreting Drucker

2008-08-25T07:21:00.002+04:00

Entrepreneur's define tomorrow and understand today. They live both forwards and backwards. Entrepreneurs invest themselves in making the tomorrow they care about. They imagine a reality and expect more than others think possible.

From Elizabeth Edersheim Blog

How many people do you know could reinterpret Drucker, and make his work relevant again? You would have to be brilliant, and my friend and former partner Elizabeth Edersheim is one such person.

I first met Liz when I joined McKinsey in 1986. She was already a storied "thought leader" in Operations. Armed with a Ph.D. in operations research from the Massachusetts Institute of Technology, she was shaking up traditional thinking in the world of operations strategy. I later joined her, as we partnered to build New York Consulting Partners into a world class transformation advisory service. We served some pretty amazing clients such as market leaders Arrow Electronics, Colgate-Palmolive, Clairol, Motorola and Symbol Technologies and the Thomas H. Lee portfolio companies - First Alert, Healthometer and Mr. Coffee, among others.

Analysis comes easily to Liz. She is fact-based, hypothesis driven and a brilliant thinker. To top it all off, every word she writes (and she has written several highly acclaimed books) has been honed many times before it gets committed. I know from personal experience working with our then editorial team, through whose hands every client review had to be filtered, that great communication was at the heart of every successful change management program.

If you want a sense of how brilliant people think, check out her blog, or read one of her books:

"The Definitive Drucker" (Elizabeth Haas Edersheim)

"McKinsey's Marvin Bower: Vision, Leadership, and the Creation of Management Consulting" (Elizabeth Haas Edersheim)

The Benefits of Color blindness

2008-08-25T06:33:00.005+04:00

Color blindness, a color vision deficiency in animals, is the inability to perceive differences between some of the colors that others can distinguish. It is most often of genetic nature, but may also occur because of eye, nerve, or brain damage, or due to exposure to certain chemicals.

Color blindness is usually classed as disability; however, in selected situations color blind people have an advantage over people with normal color vision. There are some studies which conclude that color blind individuals are better at penetrating certain camouflages.

WWII teams that analyzed aerial photographs were looking for unusual patterns, so a color blind person could prove useful. From an evolutionary perspective a hunting group will be more effective if it includes a color blind hunter (one in twenty) who can spot prey that others cannot.

Excerpts From Color blindness - Wikipedia

I discovered I was color blind early on. It wasn't hard to think of this condition as a disability. Art was a difficult class, and my hopes of becoming a doctor were not likely when during biology I could not really discern some of the key points the teacher was trying to highlight.

Over the years though I have found my affliction to have more benefits than deficits. Not just in the ways identified through technical studies, but in many less obvious ways:

An appreciation for the subtler shades
Uncolored perception
Recognition that what what I see may not be the same as everyone-else
Discovery of facets of humanity that were more important than color

So you see, if you are trying to innovate, solve problems bigger than your current thinking, you may need some color blindness. Don't always focus on the most obvious colors, but look at the subtler shades, and embrace diversity of thought!

Think Different - The Fosbury Flop

2008-08-22T06:57:00.004+04:00

You may have seen the recent Visa Olympics commercial featuring Dick Fosbury. He is famous for what is now known as the Fosbury Flop - a high jump made backwards over the bar, with which he won the Gold medal in Mexico, 1968.

Innovation requires looking at the problem from a completely different angle than previously used. When you are stuck, and can't think of a solution to an impossible problem, try the Fosbury Flop.

Talented Marketing Executive

2008-08-22T06:10:00.004+04:00

During my years at Arrow Electronics, I met and became friends with Tom Thorson, an incredibly talented Marketing Communications Executive. He ran some of the most creative meetings (which were especially important when you are trying to Jazz up over 1000 sales people during a merger kick-off).

More than his keen marketing eye though was his sense for music, graphics and an eye for a great photograph. Every few days I get an email from Tom with several shots he had taken recently. They are always beautiful, well composed and worth soaking in. I always look forward to seeing what he has done lately. Here is one he sent me recently:

He can be found at Tom Thorson Marketing and Design Consulting. Salute Tom!

Places I Have Visited

2008-08-21T01:51:00.005+04:00

I travel a lot and wondered how much of the globe I had actually covered. Fortunately, I found this tool online. The result? Still many places to see.

visited 50 states (22.2%)
Create your own visited map of The World

Proud

2008-08-21T01:20:00.008+04:00

An appropriate title for my first post.

The word reflects how I felt when our thirteen year old returned from her mission trip and informed us over our dinner about her new endeavor. She had seen a movie about the children of Uganda - "Invisible children", and was so touched, she was compelled to do something for them.

She would use her talents to make jewelry and sell to her friends. All profits would go to the children. She built her own website: Jewelry for Joy and she recruited her little sister. They are making some beautiful stuff and are off to a great start!