Month: September 2018

Thursday, 9.21pm

Sheffield, U.K.

Have you ever noticed that when you sit at your table and look at your glass – I mean really look at it – it turns out that it isn’t there at all?

Of course you haven’t, because glasses don’t act that way.

Electrons do.

You’ve probably heard of the Heisenberg Uncertainty Principle. It’s the idea that you can’t tell where something is and how fast it’s moving at the same time.

With an electron, if you try and look for it – that action will give it some energy, a boost, and it will end up speeding somewhere else. If you get its speed right, it will now be in a new place.

So you end up with this idea that an electron is everywhere at the same time, a sort of cloud rather than something precise.

And this is seems like a passable metaphor for society if we want to make sense of it all.

So we start with a flux of events and ideas, the braided rope of everyday life.

How do we make sense of what’s going on?

Take an approach that Meryl Louis set out in 1980.

She says that we the events we experience result in us making conscious and unconscious assumptions and anticipations.

What these let us do is make predictions.

Then… we experience events as they happen, as they unfold with time.

Some of them turn out like we predicted – but sometimes they don’t. We’re surprised.

That results in us needing to come up with an explanation – something that in turn helps us interpret and attribute meaning to the surprise we’ve just had.

Something that helps us make sense of it all.

So far so obvious – what’s the point of this all?

Well, one point is kind of screamingly obvious. All this happens in our minds. The actual flux of events and ideas doesn’t really care about any of this.

The second is that sense making is closely linked to surprise. We need to be jolted out of the everyday to see and discover something new.

Let’s say you do the same thing every day. You go to work, drive the same route, sit at the same desk, follow the same routine. How likely is it that you’ll experience something different?

Probably quite low.

It’s nice to have a simple life – one with routines. But if you’ve got too much of that, you need to get restless, a little worried, a little angsty about it all.

It’s very easy to assume that what you do is not very good, no one else will hire you, you’re not very marketable or sociable or attractive.

And if you’re in an environment (which you’ve constructed by the way with the decisions you’ve made over time) where your predictions about how things will happen come true all the time – then you’ve created a version of meaning, of sense as a result.

This can happen to individuals, to organisations, to families.

The antidote to the everyday is to get some surprise into your life.

And the thing is you don’t know where that will come from – you just need to create the opportunity for more surprises to enter your life, surprises that force you to re-examine your existing ideas and come up with new ones, ones that have a different kind of meaning.

Perhaps this needs an example. Perhaps not.

Here’s one. The fallacy of centrality.

This is the assumption that if something is important, then you’d know about it. And you don’t, so it’s not.

That leads to all kinds of problems.

Have you ever experienced a situation where someone new came in, promising to sort everything out. You put forward an idea for something that would make things better, but that person ignores you. They’ve never heard of this approach, so it clearly can’t work.

Except they then fail – and your approach works.

The problem is that the way in which they made sense of things failed when they experienced the events you did as well. Perhaps they were surprised, perhaps they learned from it. Perhaps not.

What this means for us is that the world is complex. For us to make sense of it all, we need to be alert to surprises, because that’s how we learn.

And if you’re not being surprised enough, you need to change something. Now.

Cheers,

Karthik Suresh

Sunday, 6.13pm

Sheffield, U.K

There’s a story about how a Japanese company invented the first bread maker that you could use at home to make one loaf at a time.

No one had managed to create one so far. The way in which bread was kneaded by human hands seemed impossible to replicate with a machine. Perhaps it was just impossible.

So, one of the engineers at the company went to work for a bread maker for several months. He learned how to make bread and spent his time learning all the steps – the mixing, the kneading, the rising and everything else that goes into making the perfect loaf.

Then he went back and came up with a design. In the 1986, 84 years after Joseph Lee patented the first bread machine, the first bread makers for home use were released.

This little story illustrates something about how modern organisations work in real life that we often miss.

On the radio a few days back someone described how all organisations are now information processing machines. That isn’t a new concept, however. The Western approach has always seen companies as machines, as things that can be directed and programmed and controlled.

This is because of how much the scientific approach has influenced everything we see. The success of science in dissecting everything around us and explaining how things work according to laws and rules has made it the natural way to think about things.

Which is why you hear people talking about hypothesis and experiments in the context of startups and businesses. That’s straight scientific thinking. Reductionist and absolute and on a search for truth.

So, when you get consultants, especially those with a scientific or engineering background, coming into an organisation to improve things – you get a very strict, scientific approach to things.

I’m guilty of this. I saw many problems as technical ones – ones that could be solved with the right application of logic, mathematics or programming.

The thing that people like us miss is that human situations are not like scientific ones, especially stuff like physics.

The difference is that when you come up with a theory about how the earth and moon move around the sun, the sun, earth and moon don’t really give a damn what you think and don’t change how they act.

When Trump comes up with a theory about how to solve the U.S trade deficit, you get a global standoff that turns into history in the making.

The difference is what happens when people are involved.

So, as a consultant, you really enter into a real world problem situation carrying some ideas you have, perhaps a framework and methodology that you think you can apply here.

Like the guy learning how to make bread, you also take part in the situation, doing things, working on things, changing things.

The difference between you and everyone else is what happens next.

This action also enables you to reflect on your involvement and learn from what is going on.

Now, you could be an armchair consultant or book writer – advising from a safe distance.

But, almost by definition, what worked for you in another situation is not going to work in this one, because the people involved are different.

You can’t step in the same stream twice.

The Japanese have a view on this – they believe that you learn through direct experience as well as from other sources – learning with your body as well as your mind.

As a consultant, you learn more through experience in the problem situation, because your reflection then lets you pull it all together, perhaps presenting your findings to the company and peers.

Importantly, it also helps you refine your own ideas, framework and methodology, giving you more that you can use the next time.

This model is adapted from Peter Checkland’s writing on action research, and is something many consultants do without realising this is what is actually happening.

Some, unfortunately, are too blinkered to realise that this is how the real world operates and instead try and ram through solutions that are based on reductionist and engineering principles.

Those people… you just have to wait for them to fail and leave.

Real change happens not just with the mind, but when you immerse yourself in reality – the reality of the company you are working with right now.

It’s about being open and prepared to learn, rather than an impartial provider of expert advice.

That’s how you’ll probably fix the real-world problem your client is facing.

Cheers,

Karthik Suresh

Thursday, 9.24pm

Sheffield, U.K.

Of course you are. Why wouldn’t you be?

If you’re running a large organisation, putting the systems in place to help your team work anytime anywhere has been a top priority for your IT team.

It’s also been the priority for the last tech giants for the last decade. And now you can run your entire business from the cloud.

If you’re a newish company, that way of working must just seem natural.

But here’s the challenge, as I see it.

A Google funded study in 2010 found, perhaps unsurprisingly, that collaboration and innovation are closely correlated.

So, encouraging the first should help with the second.

So, how do you go about that? Well, you start by providing the tools that organisations like Google sell – according to them anyway.

And that raises other issues, and perhaps some of these are familiar to you as well.

In most organisations, the balance between having room to create and innovate and the need to be secure and locked down usually ends with everything being locked down.

You’re free to do anything you want, as long as it’s in Microsoft Excel or Google Docs.

And that is increasingly not very much. In the online version of Excel, for example, you can’t really do much with macros or automation. Getting started is harder in Google docs.

Many employees in companies are probably frustrated.

Frustrated because they know what good should look like, but they’re working with tools that are so limited for security reasons that they might as well be working with a typewriter for all the increased productivity they get.

Now, that’s not an easy circle to square. Yes you’d love to give all employees a free rein to do whatever they like. But you don’t want your system crashed or open to anyone, especially someone who decides to delete all your data because they have a grudge.

I know of many organisations that still struggle with simple tasks – like doing a mail merge. They still have to edit and send out documents one by one.

At the other extreme – you have some who say that what you need in a company to be innovative is people that wear t-shirts that say things like “Safety third”.

The first time someone actually has an accident, however, the lawyers will come in and close everything down.

It may be that we’re in the middle of trying to reconcile and understand this new way of working.

Or – more likely – we’ve simply had this problem all the time. How do we get people and machines to work better together.

And the place to start is – we don’t.

Machines are good at repetitive, mechanical tasks.

People are good at creative and social tasks.

We should start by getting machines and people to do what they are good at.

It’s only when we have to get machines and people working together that we should, very reluctantly, put them together.

Does that sound bonkers. Completely unreasonable?

Well… let me ask you this.

If you weren’t able to get to your mobile phone all the time – perhaps you left it at home – just how much more work would you get done without being interrupted?

Cheers,

Karthik Suresh

Wednesday, 9.42pm.

Sheffield, U.K.

Would you want the top job – to be in charge – to be the one with the responsibility?

Shakespeare said it best – Uneasy lies the head that wears the crown.

The thing is… even if you never want to be the CEO of a massive multi-billion dollar organisation, you’re still the CEO of something. Your own life. Your family – even if it’s a joint role.

And it’s worth taking the effort to think like a CEO – to think like a person who has the responsibility for making decisions, allocating resources and deciding strategy.

Because… as the saying goes, you’re either working towards your own goals, or you’re working towards someone else’s goals.

So, what are the key things you need to know – distilled from this McKinsey interview guide?

1. What’s your direction of travel?

All strategy comes down to this question – which path are you going to take, which road will you follow?

Is it the one with the footfall, or the one less travelled by?

You can dress this up as vision, mission and lots of other buzzwords, but the first decision you make is to look around and point in the direction that you think is the right one.

2. Where did you start?

You’ve heard the saying, if you don’t know where you’re going, how do you know when you’ve reached there?.

Well, if that’s point 1, the point following closely behind is knowing where you started from.

The ambition of the vast majority of professional managers is to manage their numbers.

They need to set and meet targets – they’re under enormous pressure from the markets and investors and stakeholders and those kinds of people.

Beware of people who always make their numbers. As Warren Buffett wrote, people who always make their numbers will at some point be tempted to make up their numbers.

If you want to make real, meaningful change, you need to be clear on where you started.

That’s your baseline. And that is fixed. Although, as we know from painful experience, nothing is really fixed. A number can be anything you want it to be.

I read a story of a young person who went to his family accountant to be trained. He did the accounts as the rules said, and showed them to the accountant.

The accountant laughed, called his uncle and asked how much profit they wanted to report this year. Then, the accountant reworked the numbers to make that figure work, staying within the rules.

So, perhaps it’s best not to worry too much about accounts.

Cash flow, on the other hand, that’s another thing altogether.

3. Culture – what’s that?

Well, chasing point 2, culture is about the belief system that builds around you as the CEO.

A CEO that encourages gaming, like in the accounting example below, will end up creating an organisation where gaming is considered a normal way of operating.

Bernie Madoff anyone?

On the one hand, creating a good culture is pretty easy – just treat people as they would like to be treated.

On the other hand, it’s a chaotic and constantly evolving function of social groups, and organisations are more about politics than about achieving any real rational purpose.

And because most of us know what we want but find it hard to appreciate what others want, we’re sort of blind to what needs to happen.

But that’s something you can learn by simply opening your eyes and ears. As Yogi Berra said, you can observe a lot by watching

4. Then, it’s all about you

This is simple. What skills are needed to do the top job.

Then, do you have those skills?

5. What do you need if you’re not going to fail?

Many people think that being the CEO is about being the boss – having final say in everything.

That only happens when you also have control – when you’re the founder or have a controlling share or both.

The rest of the time you have people breathing down your neck. You’ve been hired to fix things, or grow the business, or make money. So why aren’t you?

You need to be clear on the non-negotiables, the red lines of your career as the boss.

Do you want final say on hiring? Do you get to tell the Chairman that his or her kid can’t just get a senior job?

You need to be clear on what you need to get the job done – no questions asked.

6. Are you going to make friends with everyone?

As the boss, you’re going to be the face of the company, inside and outside.

You’ll need to be friends with the cleaning crew, the administrators, the consultants, the contractors, investors, shareholders… the whole bunch of people that all want some time or attention from you.

Are you the kind of person that likes that? Or can at least cope with that? Or be really good at that?

You really need to be the kind of person that goes and sees what’s happening at the front line. That mucks in. That has facetime with as many people as you can.

They won’t come to you – you need to go to them. At least that’s what you need to do if you see your job as CEO as serving and enabling your team to do their best work.

Because… when it comes down to it you don’t actually do anything as the CEO – whether you succeed or not depends on whether everyone else around you has the tools and ability and drive to do their best.

So, perhaps the most important thing you should do as CEO is remove the things that get in the way of the people you rely on.

Cheers,

Karthik Suresh

Monday, 9.25pm

Sheffield, U.K.

It’s easy to fall into the trap of thinking that what you do is unimportant – to get intimidated by the very visible success we see others having all around us in a connected world.

Let’s say you’re starting a business and it’s in a pretty competitive industry like software development? How are you going to compete against everyone else out there?

You see this all the time, especially in new areas. For example, there is an emerging literati of blockchain, big data and machine learning specialists that seem to be doing very well, if you look at their presence on social media.

And you inevitably get marketers who come along and ruin everything.

Take reciprocation, for instance. That’s the idea that if you do something nice for someone else, they’ll feel obligated to you and do what you ask.

The basic idea is a sound one – be a nice person. Do things for others without being asked.

What this turns into is a series of posts that tag an influencer, praising them, with the aim of getting the influencer to thank the praiser and lift them into the limelight.

You’ll find a number of methods like this that promise to help you “growth hack” your way to success. Need content – just reach out to a hundred influencers, get their thoughts on the subject, compile that into a book and you’re on your way.

There are two fallacies at work here, and a knowledge of investing principles will help you identify and step around them.

The first is this – if you’re finding something out for the first time on the internet, the chances are that you’re too late to profit from it.

Many people invest in stocks the wrong way.

They see a stock going up and up, and get excited. They see it being covered in the paper – on the news – in tips in newsletters. They pile in, eager to ride that baby up.

Then, it turns and sinks. They’re sitting on a loss, panic and sell.

Buying high and selling low is not a good investment strategy.

But somehow it becomes the default strategy of many people.

If you don’t think you’re one of them, check to see if you sell much on Ebay. Do you buy (or does someone in your house buy) lots of nice things that they never wear and then sell them on Ebay later?

Do they calculate the loss they’ve made on buying new stuff and selling it second hand? Or are they overjoyed over the amount they’ve made selling on Ebay?

If it’s the latter, perhaps you shouldn’t let them manage your investment portfolio.

The point here is this. By the time the general public realises that something is happening with a stock, the thing that is happening is well on its way and close to petering out.

For a dramatic demonstration of this, just check out what happened to crypto last year and then what’s happened this year.

Most of the stuff on the Internet tries to get you to empty your wallet in return for learning how to make money on the Internet.

All the hacks you’re picking that rocketed others to success are ones that are unlikely to work as millions of others like you try and take advantage of them as well.

As Warren Buffett wrote about poker, “If you’ve been in the game 30 minutes and you don’t know who the patsy is, you’re the patsy.”

Don’t be that guy.

The second fallacy is thinking that you can predict the future and call the next big thing.

Many investors try and call sectors. Blockchain is the next big thing. A VC is going to raise a $50m blockchain fund. A startup has raised $30m in 31 minutes. So, it must be hot and worth investing in.

It’s incredibly hard to outperform the general market. You’re going to fail over 90% of the time.

Yet people persist in trying to do that. They argue that active investment adds value, even though the majority of active managers lag the market once their fees are taken into account.

The only people who get wealthy from actively managing your money are the managers.

So, what can you do to hold on to your money?

Most successful strategies are a variation on sticking to your knitting. Buy the whole index. Put the same amount of money in each month. Keep it simple.

Focus on your behaviour – not on what the market is doing. The market is there to serve you, not to guide you.

Okay… so what does that mean for me?

The point is that you can look at what’s happening around you and decide that the way for you to succeed is to do what other people are doing.

But – the chances are that kind of thinking isn’t going to work.

It isn’t going to work because by the time you see how the trick is done, the magic is gone.

Instead, you’re better off focusing on the work – the stuff you do that makes you feel like you’ve had a good day at the office. Or the workshop. Or the shed.

If you focus on the work, then one day it may lead to people getting to know your work, appreciating your work, spreading the word and eventually result in a raving fanbase who follow your every word.

If you try and build the fanbase without putting in the work – by trying to do stuff that you think will appeal to them – you’ll end up creating a shallow and insipid copy of someone else’s magic.

Real investors don’t chase trends.

They get in position, do the research and get ready. And then a trend comes along and lifts them up.

Do work that matters to you.

Then it won’t matter whether you get anything else. It’ll be gravy.

Cheers,

Karthik Suresh