Making Sense Of It All – Is It Even Possible?

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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

Why Succeeding Is More About Defeating Ourselves Than Others

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Wednesday, 9.04pm

Sheffield, U.K.

I was listening to Amy Porterfield’s podcast today and her guest, Brooke Castillo, said that the first time you do a webinar “your body literally thinks something is about to attack you and that you can die”.

Which made a picture jump into my mind – one that stayed there.

As human beings, we avoid pain. The pain of failure, the pain of rejection – any kind of pain.

In fact, we’re so fearful of pain that it can make us put things off – avoid doing things that will end up being good for us.

It’s a well known fact that we hate losing much more than we like winning. The ratio is something like five to one.

And this is a problem when we try and do anything new or different or better.

You know the old saying – if you’re so smart why aren’t you rich?

The problem, perhaps, is that if you’re smart enough to know all the ways in which things can go wrong, then you’ve got much more to be afraid of.

You create a monster in your mind, a monster that represents what failure looks like. Then, that monster sits in your way and stops you from doing things that you need to do.

And the problem is that this is a physical barrier, not just a mental one. Your body senses your brain’s fear and creates a mix of chemicals that physically cause you to want to run and hide.

To do anything but that horrible task of reaching out and making a cold call or connecting with someone new.

So, what are you going to do. What should one do when faced with a monster in one’s own mind.

Perhaps one could start with looking.

Many years ago, I was taught how to solve problems in engineering. I found analog circuit design hard, and a particular problem just wasn’t making sense to me.

My lecturer at the time just said look at the problem. Just look at it.

And so that’s what I did. For around three days.

All I did was look and think and look and think. And look and think about it. And think about what I could do about it.

And then suddenly, after three days, it felt like a rock had moved, something had shifted and suddenly I could see my way to an answer.

I can’t remember any circuit design now… but I do remember that feeling of being able to push through the fog and discomfort of a problem simply by staying put and looking at it.

And I think perhaps that’s how we can deal with monsters.

Because really, we only have a few choices open to us.

We can turn and walk away.

We can try and go around them… but we’ll probably find that they just move into the path we’re taking or we find new ones in our way.

Or we have a staredown. If we stand their long enough, they’ll get up, shake their heads and walk away.

Perhaps really that’s how we succeed.

Not by being the smartest or the wealthiest or the best connected.

Just by being the one that doesn’t back down.

Cheers,

Karthik Suresh

Why Do Some People Have All The Power?

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Tuesday, 6.54pm

Sheffield, U.K.

It’s easy to assume the world is the way it is and that’s how it’s going to stay.

It’s hard to imagine an alternative to the status quo. Can you imagine Google and Facebook not being as big and powerful as they are now? Doing a search on any other engine?

Logically – it’s possible, even likely. Societies change, regimes fall and companies disappear. All the time.

But, when you’re in the middle of a situation, whether personal, business or political, it’s hard to see where the change is going to come from.

Which is where power theory may help.

This paper by Oliver E. Williamson says that you need to have three things to grab power in an organisation:

  1. You need to control critical resources.
  2. You need to have early access to information.
  3. You need to be strategically positioned to deal with uncertainty.

Technically – he argues that the most critical part of the organisation will get these assigned to them. So, for example, if marketing is the bit of the organisation that makes the most difference, then it will be given these three things to do.

He also says that power theory is not great at explaining things – it’s a bit of a pied piper – because if you have control, why would you give it up? Why wouldn’t you stop power being taken away from you?

Now… I’m not sure I agree with his dismissal of the concept, because it seems to be useful in explaining both how things are and how they might change. Bear with me.

Let’s say you run a big car company in the US in fifties and sixties. The rest of the world has been devastated by war but the mainland US is unaffected and starts to churn out stuff for the rest of the world, supported by natural resources, a big population and abundant industrial expertise.

You’re in control. You make plenty of money. People buy your cars all around the world. Gas is cheap, so your cars are big and comfortable. You’ve got plenty of political support because of all the people you employ and the politicians you support.

You’ve also got all the statisticians and data analysts and government reports you need to see about the industry. Plenty of information on sales and resources and competitors. Nothing really gets past you.

You have a perfect power triangle – you’re in the strongest shape of your life – and it looks like nothing can ever challenge your dominance.

Until it does.

The Japanese car producers, who you’ve dismissed as makers of small, cheap, tinny cars that the American public will never buy, start to make better cars.

More importantly, however, there is a oil crisis. The Middle East creates a cartel and sends prices sky high. And suddenly all your big cars are hugely expensive to run, you don’t know how to make small economical cars and the Japanese have an opening – and people start to try their cars and like them.

Your problem is that you weren’t strategically positioned to deal with this kind of uncertainty.

And that’s because it’s really hard to predict such a dramatic shift in circumstances, especially when things are going so well.

Let’s take another example.

Microsoft was unchallenged in the PC operating system world. It ran most machines. The rest hardly made an impact.

The thing that they weren’t strategically positioned for was the Internet – and that let Google in.

What this shows us is that power is temporary – it’s a function of control, information and positioning.

At a point in time.

There’s no point in controlling critical resources if they become irrelevant. Just ask the coal industry as it wilts in the face of renewables.

There’s no point in having early access to information, for example through leaks from the government, when the Internet doesn’t give a hoot what politicians think and lets anyone talk to anyone else in the world.

And there’s no point being positioned behind a big wall if there’s a big tunnel forming right under it.

However fixed something seems to be, however powerful the current people in charge appear to be, there’s another power structure forming behind them, invisible to them – but getting ready to replace them.

Let’s hope it’s a better one.

Cheers,

Karthik

What Does It Mean To Be A Consultant Or Real-Life Researcher?

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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

What Do You Do When Things That Are Obvious Are Also Wrong?

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Friday, 8.48pm.

Sheffield, U.K.

I’ve been having a few thoughts about the purpose of this blog.

Why do I write it? What’s the point? What am I trying to do or sell or achieve or become?

The sensible answer, the one that is most Zen, is that writing is a practice. A practice like meditation or learning to play an instrument, or running. When you’re doing it, there is just you and the words and nothing else really matters – not the world, not readers. You write for you.

A different answer is that some of us just have to write – we just do. Anne Lamott, in her book Bird By Bird, writes about famous writers and why they write – because they want to, because they’re good at it – because God made them that way. Whatever works for you.

And then there is another reason – sometimes it’s by writing that we figure out what we think. And it’s by reading other people’s writing that we learn new things. And this whole writing and sharing thing just helps us all get better at dealing with the world around us.

Because… not everything we think is true is.

Like I found out today.

The kids, let’s call them A and B, were arguing over a toy. B had the toy all day and A wanted it now. So, one grabbed it from the other, the dispossessed screamed, there were tears and fighting and lots of noise.

All very normal really.

So, what would you do to make things right? Well… get them to share perhaps? Read both the riot act and tell them that they’ll each get it for a set amount of time and that’s that. Get the timer out and on.

I’ve done that before. Several times.

But, there has always been something odd about the result of this approach. They don’t seem too happy about it. A, in particular, has always been really unhappy about using a timer.

And I wondered why – surely it’s the obvious and fair thing to do – what other way would you go about doing this?

So, I typed these words into Google “why don’t some children like sharing toys using a timer” and came up with a blog article by Heather Shumaker called Throw Away your Timer: Why Kids Learn More when they Don’t “Share”.

Here’s what happens when you tell a child to give up a toy that he or she is playing with because the timer has gone off.

You’re forcing them to give up something when they’re not ready to do so. The good act of sharing that you’re trying to teach is associated with feeling bad as they lose something when they’re not ready.

It’s obvious really. You’d feel cross if someone took something away from you before you were ready to give it up. It’s like being mugged. Hardly a pleasant experience.

Heather says that what you should do is let the child that has the toy keep it until he or she is done with it. Wait till they are ready to give it up willingly as they move onto playing with something else.

The other child will need to learn to wait – and that doesn’t feel great either. Waiting – or deferred gratification – is, however, one of the most useful skills you can teach your child.

That’s the basis of the marshmallow test where kids that could wait when they were small went on to achieve much more later.

So, rather sceptically, I tried this approach. Kid A, who hated timers, was happy with this and let B play with the toy – although a little sad and convinced B would never give it up.

Ten minutes later, however, the two were sat playing happily together and A had the disputed toy.

So… in this experiment this approach worked. And it worked better than the sharing approach which seemed like the obviously correct way to proceed.

So back to the purpose of this blog.

The articles are about stuff that is interesting – to me anyway. Sometimes it’s management, sometimes it’s marketing, sometimes it’s about parenting skills.

There’s a lot of pressure in this world to be defined, to have clean edges, to be very specific about who you are and what your brand is all about.

But the real world isn’t like that. It’s messy and there are weeds and cracks and all kinds of unstructured, undefined and generally messy things.

IBM on LinkedIn said something like 80% of all data will be unstructured by 2020. Well, duh, the vast majority of data must be unstructured now. Think of all the words ever written and films and poems. Structured data is probably a minority of what’s actually out there.

Life is complex and obvious things are not always right.

And I think this blog is just one way to help me figure things out.

And if I’m lucky, like Heather’s article, it might help other people if they happen to have a similar question one day.

Cheers,

Karthik Suresh

Are You Preparing For The Changing World Of Work?

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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

What Do You Need To Know To Be A CEO?

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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

What’s Going To Happen To Our Investments After BREXIT?

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Tuesday, 10.35pm

Sheffield, U.K.

It’s probably time to start thinking about markets again.

We’ve had years of plenty. Since the lows of March 2009, where the FTSE fell below 4,000, we’ve had steady increase in its valuation.

And, ten years later, seven months from now, the UK will leave the European Union. What do markets think about that?

It’s a strange thought that there are people in work who started after the financial crisis of 2008. For them, the world has only become better.

For those of us who experienced the crisis, it seems like a long road to recovery and now we ask whether we’re going to encounter potholes, speedbumps – maybe a sinkhole or two. What’s going to happen?

Also, what tools do we have to look at what’s going on and what we can do about it?

For a start, too much information is probably a bad thing.

There’s a study by Paul Slovic looking at the relationship between information and effectiveness in decision making.

No information means you’re just taking a punt – your chances of success are pretty random.

Some information, say 5 -10 pieces, results in a decision that is sort of in sync when it comes to effectiveness and your confidence. Say you’re right 22% of the time based on this information and you’re 20% confident – that’s in line.

Much more information will not radically improve your hit rate – your accuracy. But it will dramatically increase your confidence.

And that’s a problem. More information may well make you more confident – but more because you look for information that confirms your biases than what is actually happening in reality.

I don’t really take in much news. On the rare occasions that I do, I’m not sure that I get anything more than a mass of conflicting opinions masquerading as fair and objective journalism.

Let’s go to where the truth is.

And the truth is in the markets. That’s where people show how they really feel about what’s going on.

Two countries, the U.S and the U.K are both pursuing isolationist policies. How are the markets taking it?

Well, the U.S appears to be taking it well. The S&P 500 is on a steady uptrend.

Perhaps the U.S is fundamentally sound. It’s the largest market in the world, with abundant and cheap natural resources. It’ll do just fine on its own.

The U.K is in a less fortunate position. It’s smaller, cannot dictate terms to its neighbours and can’t rely on support from China or further afield.

Its success depends on how well it negotiates and how well it engages with the rest of the world.

And the politicians so far appear to be doing a pretty poor job of it.

Or so the markets seem to suggest. The FTSE is heading down. Lots of euphoria in May, it seems, with a nice bull run, but since June that’s evaporated and we’re seeing a down trend.

I think this is something to watch carefully. It looks like things have turned.

And not for the better.

Personally, from an asset allocation point of view, I’ve ended up being quite UK light – around 8% in the UK actually and 82% U.S weighted with the rest scattered around the world.

I don’t see anything that’s going to make me change my mind yet.

I’m not looking forward to seven more months of this.

Cheers,

Karthik Suresh

Why Trying To Respond To What’s Going On Is A Bad Idea

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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

Why Using Force Multipliers May Be The Smartest Thing You Do

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Sunday, 9.40pm.

Sheffield, U.K.

I got in touch with a few people some weeks back – a cold outreach for a service offering.

The details aren’t important – the point is that I was making a cold contact.

What are the success rates for that kind of thing?

Let’s look at what mailchimp says about email – it looks like open rates hover around 20% and click rates around 2%.

This approach had a 71.43% response.

Which was kind of a holy crap moment.

It also got me to thinking about what happens next. Clearly, when someone is courteous enough to acknowledge you then you have a responsibility to go back with something that is relevant to them.

This is something professional salespeople disagree with violently. On some social media platforms anyway.

They argue that it isn’t their job to do any research into a customer. No – once someone puts up their hand and expresses an interest, the salesperson’s job is to engage with that customer, have a conversation, understand their needs and move towards a close.

I think the real reason for their displeasure is simpler.

Doing research is hard work. It’s boring and time consuming.

Wouldn’t it be easier to have a research assistant go out and collate all that boring stuff and highlight the good bits so you can flick through it while waiting in the reception for your prospect to come and get you?

Let them do the hard work of educating you?

I did the research instead. And it took an hour for just one prospect. Multiply that by the number in your pipeline and the hours stack up pretty quickly.

which finally brings us to the idea of force multiplication.

It’s very much a military concept, the idea that you can “fight with limited resources and win”.

What do you think a consultant setting up a sales function would advise me to do?

Well – they’d probably say we needed resources. A CRM to track the prospects and everything associated with them. Trained salespeople to engage with prospects. Admin and research staff to help the salespeople.

You’d need a budget – probably a few 100k.

That’s sound strategy. It’s the application of overwhelming resource to the specific problem that you have. And it will fail.

It will fail because big strategies need a number of things to go right – as explained here – and the changes of that are slim.

A better strategy is to look for force multipliers. And there are three that stand out.

Systems that automate the right stuff

What do we do when we carry out research?

These days, it’s all about Google. Type in the term, read the first page of results and you’ve got a pretty good idea of what the prospect is all about.

You could do this manually – click, read, click back.

That’s how I spent the first hour.

Then, I wrote some code.

That goes off, gets the results and pages and sticks everything into a single file, which I can read quickly and pick out the main bits.

The result – research time down from an hour to around 5 minutes.

Cost = $0.

The right kind of information

Information is the key to winning these days, not resources.

Take the response rate I started with.

The only reason for that is because I reached out to the right segment. A group of people that had a good chance of being interested in what I put in front of them.

And the problem many of us face is that we’re swimming in information and don’t know how to extract the important from the rest.

But again, that’s possible with the right systems. With a little bit of code I can figure out which companies are similar, which ones are worth going after and who is the right person to contact.

All that stuff is available now – often for free.

Anyone who doesn’t bother to spend the time getting the information they need is going to going to the next stage much harder.

Network based operations

Networks are interesting. Very interesting.

Take a typical large company. It’s going to be hierarchical – mostly. Orders come down. People do what they are told to do.

The typical company ossifies as it grows – it becomes slower, less responsive, less receptive to feedback.

A network operates differently – and many professional services firms use a model where they bring together the right group of people to work on a project, rather than just giving it to a department where it’s probably going to be done badly.

Modern armies do this – operate with a mission based approach rather than an orders and directives based one.

Let’s say you’re a graphic designer. If you team up with a copywriter and reach out to marketing directors, you’ll probably be much more effective than if you’re trying to do it all by yourself.

If you want to scale, then perhaps you need to bulk up your team with artists on Upwork, and focus on designing and selling propositions and outsourcing the artwork.

You could, all on your own, have the same impact as a large agency, but with a fraction of the overhead.

That’s a force multiplier.

The aim is to win

The problem with many strategies is that they’re about getting in position, getting resources aligned and deployed.

But that’s not the point.

The point is that you want to win – win your battle with the fewest casualties and fewest resources deployed.

The first approach is just the mindless application of force.

What you want to do is to look for opportunities where you can multiply what forces you have already.

Cheers,

Karthik Suresh