How to get your timing right

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Why do some people succeed and others fail? Is it because the successful ones were just better? Or were they lucky?

This is a hard thing to take apart. All we have to go on is the evidence of success or failure – we don’t know what would have happened if the situation had been different.

“Luck is what happens when preparation meets opportunity”

This quote has been attributed to Seneca, the Roman philospher, but probably wasn’t said by him. It’s still good, however.

If you get yourself ready, then when you are able to react when the opportunity presents itself, you improve your chances of being lucky.

When it comes to timing investments in markets – this is a good strategy.

In investing – if you decide ahead of time what is good value, and the market comes close to that number – you should buy.

Much too often when prices fall people don’t buy, hoping they can get it cheaper. And when they rise they don’t buy either, hoping they will come down again. That doesn’t work.

Another way of thinking about this is with a surfing analogy. If you’re a surfer, you don’t just go to the beach, scan the waves for a big one and then head out towards it.

Instead, you get in position, and when the big wave comes along it lifts you up and you get going.

It’s all about getting in place before the opportunity starts. If you can see a trend, see the wave, see what is about to happen – then you are probably too late to do anything about it.

This is perhaps why people who take risks, start new ventures, try out new ideas are sometimes regarded with pity, sometimes with scorn by those around them.

Until they succeed. And then it looks like it was inevitable after all and anyone could do it. Except they didn’t.

Can you increase your chances of getting your timing right and being lucky?

A ten-year study by the psyschologist Richard Wiseman suggests there are four things lucky people do more than others:

  1. They create and notice chance opportunities
  2. They use their intuition to make lucky decisions
  3. They have positive expectations
  4. They are resilient – and that sometimes changes bad into good

This study suggests that how lucky you are may be related to how you think and behave.

Perhaps the approach to take is a combination of Oliver Cromwell’s maxim “Trust in God and keep your powder dry”.

In other words – think and act lucky, but also do everything you can to have the capability and tools needed to seize an opportunity when it comes along.

Why body language isn’t enough

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If you have ever attended a team building event or communication seminar or similar training programme, the topic of body language probably came up.

93% of communication is non-verbal, they probably said. How you say something is far more important than what you actually say.

The problem is that this is wrong.

Professor Albert Mehrabian’s research in the late 1960s found that when trying to communicate feelings, 7% of the impact came from the words you used, 38% from the tone and 55% from your expression.

In other words, if you said you were happy when looking sad and sniffling, or said you were fine while looking very angry and snarling, people could work out how you really felt most of the time.

It doesn’t follow that when you try and communicate in general, only 7% of what you get across to someone else is the verbal component.

The research has been misinterpreted for decades – until TED.

TED – a conference on Technology, Entertainment and Design – is now probably the world’s best known repository of great ideas. It has videos of short talks where speakers talk billiantly about an area of interest and expertise.

They don’t just saunter up on stage and perform. The words they use are crucial – their words are used to “tell a story, build an idea, explain the complex, make a reasoned case, or provide a compelling call to action”.

TED made what you said important – because the speakers were talking about great ideas and insights and research that mattered and was making a difference.

Why does this matter to the rest of us?

Virtually any important decision you are involved in will require communication and persuasion. Either someone else has to make the case to you, or you need to make the case to someone else. And people have to agree.

In a connected world filled with information noise, we need to get better at making the case for doing something important.

What you say is just as important as how you say it.

What’s the least you can do?

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There just isn’t time to do everything.

How do you know what you are doing is having an impact? And then, how do you know when you have done enough.

A model from pharmacology may help.

The concept of an effective dose (ED) is a measure of the smallest amount of a drug to produce a desired response in a patient.

Anything more than the ED does not help – having 3 painkillers when one is enough is probably not going reduce your pain by three times.

Much more than the ED can be harmful – that’s why you aren’t sold massive packets of painkillers in supermarkets.

So, there are three things to figure out when thinking about what needs to be done:

  1. What’s the baseline – the normal level or business as usual?
  2. What’s the least required to produce a required result?
  3. At what point should you stop?

It’s very easy to do a lot and look very busy, but it’s more interesting and useful to be effective.

And being effective means doing just enough – not too much. Doing too much is a waste of resources.

In the startup world, this model is referred to as a Minumum Viable Product (MVP).

The MVP is a product that has the least amount of features that make it viable and usable by a customer.

Once you have that, find a customer, get them to use it and use their feedback to improve and make the product better.

Many companies spend too much time and money building a perfect product, only to run out of both just at the point when they are ready to ship.

Take another example – one that many of us face – how to change a behaviour?

Whether it is exercising more, eating better or doing something more, just how long does it take to create a new habit?

First – its obvious that if you select too punishing an exercise regime or too strict a diet, the chances of you giving up increase. The right behaviour is one that you can sustain over a long enough period.

Then if you do that minimum daily behaviour every day it turns out that it takes between 18 and 254 days to make that a habit.

That’s quite a wide range. If you’re at the top end of that range, the less you have to do and the easier you make it on yourself, the more likely it is that you will be able to stick it out.

Once you start to look around, you can see applications of this approach everywhere.

Do you really need to check your phone 46 times a day to stay informed? How much news do you really need to watch every day to know what is going on? How much time every day do you need to spend checking out markets to be aware of trends?

Paradoxically, by doing less you may find you have the time to do much more.

As Antoine de Saint Exupéry, the French aviator and author of the Little Prince wrote, “It seems that perfection is attained, not when there is nothing more to add, but when there is nothing more to take away.”

Would you stick your neck out?

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What would you do when faced with a situation that poses a risk to you personally or professionally?

Are you risk averse – preferring to deal only with certainties or do you plough ahead and accept whatever happens as a result?

Neither approach is particularly effective.

At a talk at Sheffield University Sir Peter Middleton, a former Chancellor of the University and Group Chairman of Barclays, made the comment that outside of number theory, everything is probabilistic.

And that is something that is quite hard for us to get our heads around – it’s just not the way human brains are wired.

Take the army life, for example. That is a profession where sticking your neck out could quite literally result in a very unpleasant outcome.

If you were a risk averse soldier, would you ever go first around the corner?

The US military, which helpfully publishes a lot of its leadership training material, talks about the concept of prudent risk in its Mission Command Doctrine.

Prudent risk is defined as “deliberate exposure to potential injury or loss when the commander judges the outcome in terms of mission accomplishment as worth the cost”.

It’s not gambling, rushing in hoping to win big without thinking through what might happen to your team if you fail.

Instead, you weigh things up, in essence working out the probabilities involved, and make a prudent decision.

Take another field – investment management.

Risk is defined in rather arcane terms because it sounds better when you try and sell it to clients. Volatility or beta sounds much more knowledgable than saying some days prices go up and other days prices go down and most days there isn’t really a clear reason.

Warren Buffet talks about risk in simpler terms – he defines risk as the potential for loss.

If you buy a particular stock, or do a certain transaction, what are the chances that you will lose money on the deal?

If you only deal with certainties, and keep your money in cash under the bed, you returns will be low.

If you go for exotic and complex deals that you don’t understand but are assured are “no-brainers”, you may strike it rich, but in many cases you will not.

Remember the old saying – when a person with money meets a person with experience, the person with experience ends up with the money, and the person with the money ends up with the experience.

The key to succeeding in investment is taking prudent risk – taking action when the opportunity outweighs the cost and you have a greater probability of success than failure. And then doing that again and again.

When it comes to personal or business success, the same approach applies.

You can’t replace personal initiative, responsibility and cooperation in the workplace with automation. It’s hard to get a robot to do anything outside the limitations of its programming.

Instead, businesses succeed when the people in them assess situations clearly, weigh up the pros and cons and accept that any significant decision is going to involve risk – and take the crucial decisions where the opportunities outweigh the costs.

That does mean sometimes sticking your neck out.

What do you think of when you hear hoofbeats?

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What could possibly be the cause of a problem you are facing? How would you diagnose it?

Medical students are taught to be careful about making diagnoses of rare illnesses.

It is easy when you see a patient to remember the unusual illnesses you have encountered that caused the same symptoms as now and jump to the conclusion that your patient has the same disease.

It is likely that there is a simpler reason.

Perhaps this is why many doctors ask you to take a couple of painkillers and come back in two weeks. The chances are that whatever you have isn’t actually that serious.

Dr Theodore Woodward came up with the aphorism “When you hear hoofbeats, think of horses, not zebras” to remind his students to beware of making exotic diagnoses.

But you can use this outside medicine too. Take markets, for example.

Markets are places when buyers and sellers come together. Prices are created through the mechanism of supply and demand and the actions and decisions of participants.

If you want to get a good deal, you need to know what it takes to produce and supply the item you need and calculate its value.

In a one-to-one sale, you may be able to negotiate a good deal. In a financial market, you need to be ready to move when the market price is at a level that is low compared to your calculation of value.

Many things move the market price on a daily basis, but usually a few big things impact how prices work over the longer period – and they boil down to supply and demand.

The trouble most people have with markets is that they feel that they should be active rather than putting a strategy in place and letting it run – the simple passive approach seems too easy, but time after time it produces better results.

In any field, operations, human resources, sales, writing, programming, marketing, research – it is likely that the reasons for a problem are down to common causes.

Before you decide that your phone is knackered or that your computer has been infected with a virus and that’s what is making it slow, you should turn it off and turn it back on again and see if that fixes the problem.

If your marketing isn’t working – the chances are that you are not taking to the right people, or not saying the right things to interest them.

If your writing doesn’t flow, it’s likely that there are four or five main reasons that repeat time after time.

This aphorism also applies when you think about larger issues.

Is it possible that climate change is an elaborate scientific hoax, or is more likely that the current U.S administration’s antipathy towards mitigating climate change is because powerful organizations with a vested interest in the status quo are trying to protect themselves?

That said, context matters.

If you are on safari in the Masai Mara and you hear hoofbeats, you are quite likely to see zebras.

In addition, although you should not reach for an exotic reason immediately, you should also not rule it out until you have evidence to the contrary.

We just need to make an effort to think through the problem as clearly as possible.

Why we should spend more time thinking upside down

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How you look at a situation usually defines how you analyze it and the kinds of solutions you come up with as a result.

The problem is that quite often it is only after you have spent some time on the analysis that you find out that the way you were looking at the situation in the first place was wrong.

The maxim “Invert, always invert” was a favourite of the German mathematician Jacobi who believed you could solve many hard problems by thinking about them upside down.

Take a famous example from Edward de Bono about the problems of pollution. Factories along a river were taking in water, using it and putting their polluted water back into the river. The last factory received the most polluted water.

The question asked was how to ensure that factories cleaned their water first before putting it into the river. Did it need a legislative solution? A technical one?

de Bono’s simple idea was to invert the input and output and require all factories on the river to have their water intake pipe downstream of their output. This means that they would be the first to suffer from their own pollution and give them a strong incentive to clean up.

Charlie Munger, the Vice-Chairman of Berkshire Hathaway, has talked about the importance of inversion in making investment decisions.

The secret to being smart, he says, is to avoid doing dumb things.

If you avoid doing dumb things for long enough, like taking drugs and racing trains to the crossing, then eventually the decisions you do take will result in good outcomes, and you will look smart as a result.

Inversion, or upside down thinking, can be applied to many situations in life and business.

If you have a goal you want to reach, thinking about the things that will stop you achieving that goal can help you take the right decisions on what to do and what not to do.

If you are facing a business challenge, re-stating the problem may create new approaches that you hadn’t thought of before.

For example, if your car park is too full, you might consider how to increase its capacity – and that leads to solutions like buying more space, expanding and investing more money.

Instead, asking how you can reduce the number of cars in the car park may result in different solutions – encourage car sharing, moving to other locations or encouraging home working, getting to the same point but with less investment.

In investing, after you have come up with all the reasons why you should buy something, it is a good idea to list out the reasons why it is a bad idea to buy it as well.

Looking at things the wrong way round, or upside down, can expand the way in which we think about problems and create a richer set of solutions for us to pick from – increasing our chances of making good decisions time after time.

Should you get everything done?

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You know the old saying – if you want to get something done, give it to a busy person.

But what if you are that busy person, how are things working out for you?

John Cutler takes an interesting approach to this issue, using the word “promise” instead of action to describe what we commit to doing every day.

You probably take down lots of actions every day. Even a few a day quickly mounts up. In a year, you might commit to 600-900 action items.

Even if you get 20% of them done, that still leaves hundreds left incomplete at the end of the year.

This is the problem with productivity systems such as David Allen’s Getting Things Done. You could collect everything that has your attention and get it onto a list and out of your mind. But very quickly, the overhead of collecting and listing and processing can get overwhelming.

When the difficulty of managing the list outweighs the benefit of having it, you have two options. Either abandon the system or get very tired.

This isn’t how things were meant to be.

John Maynard Keynes, writing in 1930, imagined a future where technology would be so advanced that people would have little to do. They might work just because they wanted to, and surely no one would want to work more than three hours a day – and so he projected a 15 hour work week for most of us.

Instead, we now work longer hours than ever. Why is this?

There are two reasons.

First, some jobs don’t pay enough to live. Some people are trapped in low wage jobs where they are paid by the hour and so they have to put in the hours to get enough to get by.

The second is that some jobs pay too much. For many people, being paid a lot per hour makes it hard to give up that hour of work and the associated money that comes with it.

For example, you could perhaps work two days less and live comfortably. If the lost day’s pay is high enough, however, you might be reluctant to lose it and so the amount of money creates a real disincentive to working less.

Going back to John Cutler, one way to manage life better is to be more choosy about the promises you agree to. Make less. Keep more.

A more radical solution is Rutger Bregman’s proposal to give everyone a minimum basic income and change the rules to a 15 hour working week and open borders and let anyone move anywhere.

You may instinctively shy away from such ideas, especially the part about open borders. But many people, including Elon Musk, support initiatives like a minimum basic income and it is being trialled in places.

The thing to notice is that the way we live and what we do is results from choices we make as individuals and societies.

You can choose what to get done.

Do you have what it takes to live on Mars?

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The best way to prepare and plan for life on Mars is to try living like you are already there.

That is what they do at HI-SEAS, the Hawai’i Space Exloration Analog and Simulation habitat, on the slopes of the largest volcano on earth, Mauna Loa on the Big Island of Hawaii.

Teams of volunteers, selected for their astronaut-like capabilities are selected from hundreds of applicants and spend four to eight months in a small solar-powered dome that can house six people.

The domes have a living room, sleeping quarters, kitchen, bathroom, laboratory, simulated airlocks and “dirty” work areas. Team members spend the time in close proximity and can only go outside wearing a space suit.

The team can communicate and access the internet, but with a 20 minute delay to simulate how communication will work between Mars and the Earth. Communication with mission control is only through email and posts – not real time.

So, is this your idea of heaven or hell? Being cooped up with five other people living and working in close proximity and little privacy and alone time.

The researchers have learned a few things about managing such a social environment over the different experiments they have run.

Boredom is the enemy. You need to have something to work on and occupy you. Lots of books help.

The mix of the crew is crucial. You need a balance between introverts and extroverts. Distasteful jobs, like cleaning out the toilets, earn rewards like extra time in the shower.

Experiments like these are a hot-bed of innovation. For example, the mission to get us to the moon resulted in inventions such the CAT scanner, cordless tools and scratch resistant glasses.

The Mars experiments may lead to a better understanding of what we need to live in low-power, off-grid environments without sacrificing comfort entirely.

If nothing else, it will make camping with the kids a lot more interesting if you can pretend you are living on Mars.

How to avoid the success trap

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Did you know that the chances of your company still being successful in 50 years is probably just 10 to 15%?

Just over 12% of companies that made up the Fortune 500 list of America’s largest corporatations in 1955 were still around in 2014.

A staggering 88% had failed, merged or fallen from fortune, without enough revenue to be listed.

This is the impact of the “success trap” that lies in wait for strong and profitable companies that dominate their markets, like dinosaurs lumbering towards a tar pit.

Bill Gates once said that “Success is a lousy teacher. It seduces smart people into thinking they can’t lose”.

And from Robert Kiyosaki, “The biggest trap, the biggest dungeon in life is isn’t laziness or bad luck, it’s comfort.”

Great companies got there by doing something different. Ford Motors is named after a man who changed the entire structure of transportation using new techniques of mass production and creating a practical affordable car for the masses.

He didn’t get there by listening to his customers. If you had asked them what they wanted, they would probably have said “a faster horse”.

By creating something completely different in the mass-produced car and making it possible for many people to afford it, Ford sounded the death knell for horse-drawn carriages, stagecoaches and buggies.

Yet now, a hundred years later (the Model T came out in 1908), an upstart electric car manufacturer that should not need naming is valued at more than the venerable automaker.

The main problem is that successful companies got there by being good at doing something new. So, they focus and improve those aspects of their business until it becomes business as usual.

They are also under pressure to deliver results, so they focus on the decisions that will produce immediate and visible returns.

In doing so, they forget that what made them successful were the innovative things they did in the past. If they stop innovating, then someone else will come along and do that instead.

When that happens, the market changes around the company, even though it still looks like it’s doing just fine. But eventually, things have changed so much that the company just becomes irrelevant.

So, how do you deal with the success trap?

First, if you are already in it and want to get out, you have a job ahead of you. You need to transform your company, cutting costs and pruning back heavily to the core of your capability. Then you need to invest in the future, innovating and exploring.

It’s not easy, but you can do it. Lego went from being a moribund toy producer in 2003 to taking significant portions of parents’ disposable incomes with its product launches such as Ninjago and tie ups with film franchises such as the Avengers.

To avoid the trap altogether, you may want to reflect on the title of a book written by Andy Grove, a former CEO of Intel, called Only The Paranoid Survive.

How to create innovation using teamnets

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The challenge for many organizations is how to move from managing people to managing knowledge.

Countries from the UK to India see services as a crucial part of their economy.

Managing services, especially services based on knowledge work, requires a different approach from managing organizations based on machine and physical labour.

In particular, when it comes to innovation, what an organization is capable of doing depends on what the individuals in it have learned over time, the know-how they have developed, and the extent to which they have the ability to understand what they are doing.

“Understanding”, the ability to be reflective, creating meaning and sense, is crucial for innovation, because that is what enables the framework for new insights, creativity and change.

Managing knowledge is different from managing information. Just writing down everything that needs to be done may capture information – but that is not enough.

Managing knowledge is more about creating the right conditions, an environment that encourages people to create, show, share and collaborate to provide better services to their customers.

In addition, any single organization may not have all the knowledge required to meet the needs of a customer.

Jessica Lipnak and Jeffrey Stamps used the term “teamnets” to describe clusters of organisations that work together to serve customers better.

Teamnets are formed of groups of individuals that come together, share knowledge and create new and better organizational capabilities.

This can be done even more effectively with virtual teams that are made up of people in different time zones, geographical locations, distances and cross over organizational boundaries.

The term “teamnet” was coined in 1993. Twenty four years later, we have the internet and an array of tools to help us collaborate and work together better.

Many organizations, however, still trap people in organizational silos with management controls based on hierarchy and authority with inflexible systems and hidebound communications.

That needs to change before they can become more innovative.