Monthly Archives: March 2017

Random thoughts – keeping you on your toes

Hindsight

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“If I knew back then what I know now , then I could have ………”. Ah, what a sad lament.  The logic of the statement rings true.  For example if I knew shares In Apple were going to appreciate the way they have before the price began to rise.

Or that Nortel would go bankrupt.  That Bre-X was a fraud.  That Donald Trump would get elected.  The pain I could have avoided, the profit I could have made.

Lamenting the Unknown

The benefit of hindsight is fairly obvious .  There is none.  The probability that you will ever know what the future will bring with absolute certainty is nil.

Recognition that the unknown exists is key to making good decisions.  Attempting to predict the unknown and acting on those predictions can be a risky business.

A better practice is to quantify what you know and where possible what you don’t know.  In some cases of course you won’t even know what you don’t know.   Those cases cannot be quantified.

Knowledge Based Actions

Knowledge is a combination of the things you know and those you don’t know.  That is, you know of them, but don’t know the answer.  (Obviously things you don’t know of at all cannot be included)

Knowledge based decision making is  based on known information (included those with an unknown quantity but which you are aware of).  This method provides better results than hindsight or historical data.

 

Random thoughts – keeping you on your toes

Do it yourself

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One of the hardest task a leader faces is achieving goals and objectives while using the available resources.  Sometimes just doing it yourself can be very appealing.

Leading by example, certainly involves a “do it yourself” element but at its heart, this a  balanced technique to build empathy and set a overall cultural tone.  It is an example not actually doing it yourself.

Undertaking a task and doing it, particulary when the assigned resource is not working out, typically turns out to be unsustainable.  This can be an influencing factor behind  personal “burn out”.

Is It Worth the Effort

For a truly effective leader the ability to use all your available tools, (human, machine, or otherwise) is crucial.  It just takes common sense to realize a single person cannot achieve the results of 3000 by themselves (or even just 10).

This is not just managing resource utilization but most importantly guiding all the resources to success.  That is, after all,  a key function of leadership, creating an environment for success.  Doing it yourself can appear easier, but this is a false view.

How?

The fundamental attributes of leadership are almost exclusively focused on enabling the leader to unleash the power of others.  That is enabling others to achieve their best.

Essentially leaders perform truly a catalytic role.  You are not involved or used up by the reaction but you are instrumental in the reaction occuring at all.  Without a leader the chances for success are diminished.  The risk of failure looms.

I have posted about specific leadership attributes in the past (self awareness, confidence, empathy, vision, achievement orientation, to name a few) and I will post more specifics in the future.

Todays takeaway is an understanding of the linkage between these atrributes and not doing it yourself.  That leads to success.

Random thoughts – keeping you on your toes

Sharing Information

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When I was a child we used to play a game called broken telephone Or some called it just the telephone game.  It was an educational exercise geared to demonstrate how easily verbal communication can go off the rail.

It’s a simple exercise where a group of five or ten people whisper a word or phrase to each other down a chain.  The original information (the word or message) rarely (probably never) survives intact to the end of the chain.

The last person states what was passed to them and everyone has a good laugh.  For example start with lock and don’t be surprised to see it morph through several whispers as clock,block, rock , and finally emerge as possibly love (where did that come from).

The confusion grows with the use of phrases ,for example try ” Two tiny toads ate flat flying flies.”

The point

This exercise  clearly show how small misconceptions can end up making a huge difference.  It is  a fun way to highlight the  importance of active listening.

Most importantly though it shows just how hard it is to share information accurately.  The last person in the game thinks they are replicating the information, it was just the simple sharing of a word or phrase, after all.

Don’t be fooled

You may be positive your information share was clear, however, more often than not this is not true.  Don’t assume the meaning of your message (communication, information share) is interpreted the way you understand it.

There are many techniques associated with good and effective communications but the most important one is restating.  When you have finished communicating, ask the other party to repeat the message.  Don’t be surprised at how often this leads to the need for clarification.

 

Random thoughts – keeping you on your toes

What language do you think in

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Thinking is an individual process centric to the human brain.  Basically the construction or development of a particular opinion, belief, or idea about someone or something constitutes thinking.

Artificial intelligence represents the ability to think without a human brain.  As the description of thinking is very broad, measuring if it is occurring can be a very subjective practice.

Alan Turing, British computer scientist, academic (among other things) postulated a test (the turing test) for artificial intelligence . It is however a somewhat subjective test.

Do you think in language?

Thinking is more a concept, that is thoughts are conceptual (e.g. think of sound or smell).  Language is a communication method associated with the thoughts but some  cognitive experts argue language is used more as an internal monologue tool than as a requirement for thought.

I have a number of multi-lingual friends, colleagues and family within my personal network and the simple question, “What language do you think in?” often leads to puzzlement.

Most, in fact initially everyone I asked was not sure what the question meant, hence the puzzlement.  On the whole, my conclusion is language is not required for thinking.

That being said, the ability to communicate is a key requirement for assessment  that artificial intelligence (thinking without an organic brain) exists and that thinking is occurring.

Still I wonder?

  • Can thinking exist without language, even if that is sign language
  • does a computer or device need to be able to communicate to prove the presence of intelligence
  • does thinking require the ability to comprehend and is language required to do this
  • if  I am multi-lingual and having a internal monologue, which language do I use.

And the questions continue.

 

 

Random thoughts – keeping you on your toes

Governance – an exploration

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Very generally,  governance refers to undertaking processes and practices by which others actions/activities are controlled and directed.

In effect these processes and practices start with guidelines, laws and rules  and end with enforcement to ensure they are adhered to.  For example, speed limits are a law most of us are familiar with.

This law is a governance practice intended to reduce the risk of accidents (or it represents a government money grab) . Speed cameras are one enforcement practice associated with this law.  Fines are another.

Governance, Yuk

A typical reaction to governance is distaste.  Like most things though  governance has associated pro’s and con’s.  Low levels of governance  usually result in:

  • faster completion
  • greater flexibility/ innovation
  • simpler solutions
  • lower quality
  • greater risk of error
  • inconsistency across repeated activities

Clearly high quality, consistentency and low risk are better attributes than the opposite listed above.  Yet higher governance is usually less flexible, slower and lacking creativity.

What to do?

Both approaches to governance (a lot and a little) have pro’s and con’s generally exactly the opposite.  The best way to achieve the highest results (best of both worlds) is “surprise,surprise” through a balanced approach.

Too much or too little governance is not a one size fits all balance.  It is very contextual.  For example, as an investor you probably desire strong governance to be in place around your investment.

The intent is to risk your reduce of loss.  However if the regulations are too onerous the investment can be strangled by them.  You might not lose but you might not gain either.

An example of this is Trumps approach to reducing regulations put in place during the last financial crisis.

In his view the risks mitigated by these outdated regulations have subsided in the current economy and the regulations are holding back economic and job growth.

I am not sure I agree with his assessment but the principle of balancing governance practices to get the best result really does resonate with me.

Random thoughts – keeping you on your toes

The obligatory drum solo

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In the late sixties and early seventies rock concerts typically had a 10 to 20 minute drum solo while the other musicians rested.  During this era the freeform and artistic touch were hallmarks of the heavy music scence.

The obligatory drum solo came to mind as I was wondering if I would comment on the recently announced annual Canadian Federal budget.

There is not much to comment on but like the psychedelic era drum solo, I felt the need for an obligatory comment.  It is an annual obligation, but this year I wondered if there was a point.

Spending Money you Don’t Have

The theme of the Canadian liberal government is announced as “Building a stronger middle class” but the reality is “Spending money we don’t have so the middle class in the future will be worse off (and everyone else too)”

Why does the government spend more money that it takes in revenue?  The only explanation is “because they can”.   The economic harm to furture generations and to the basic economic principles which enable our current lifestyles is insurmountable.

Unfettered spending destroys the basic model of suppy and demand ( in the long term) and is unsustainable.  I am neither against, nor for using the budget as a tool of political policy, but spending money that does not exist is unjustifiable by any rationale.

And in summary, my obligatory comment, basically the same as last year, is cut spending, raise income or both.   Think of our children, stop destroying their future.

Random thoughts – keeping you on your toes

Emerging Markets

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Less developed countries or the more politically correct term,  Emerging markets, refer to  countries that have some characteristics of a developed market, but do not meet standards to be a developed market. Frontier market is used for developing countries with slower economies than those of emerging countries.

This is a bit of a subjective classification.  What are generally considered to be obvious examples of each category are:

  • Developed – U.S., Japan, Canada, U.K., France
  • Emerging – India, Russia, Brazil, china
  • Frontier – Kenya, Cote de Ivoire, Nigeria

Capital Investment Opportunities

A colleague and I recently had a fascinating discussion about the advantages and disadvantages of investing in Emerging and Frontier economies.

The number one benefit is the opportunity for outrageous returns.  Return on capital of 1000% is not unknown – this over a short term of 5 to 10 years.

Of course the risk of losing everything is very high.  The more “frontier” the economy the greater the risk.   In short investing in emerging or frontier markets follows the basic axiom; high risk, high reward.

Mitigation

A key driver of the potential for poor results or significant losses arises from the environmental unknowns.   Things like political maneuvering, cultural norms (e.g., are bribes allowed, even expected), material constraints and so on.

My colleague suggested  these risks can be easily overcome by employing locals inhabitants or management firms who can guide your  investment past the trip wires.

My question was, why would I take these risks when my North American investment capital could return me 100% over 5 to 10 years with none of the environmental risks or unknowns?

Simply put why venture into the unknown when the known works just fine.  I guess ultimately it boils down to your appetite for risk.

 

Random thoughts – keeping you on your toes

The Sales Rant Continues

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One of the foundations of our economy is sales.  It is a very simple equation.  On one side is a producer with a product or service to sell and on the other is the consumer who needs the product or service.

When the price the producer wants equals what the consumer wants to pay a sale occurs.  No sale, no economic activity.  The buy and sell transactions can be linked in chain.

In these cases, failure to sell at the bottom of the chain can impact a long string of financial activity.  For example, the steel sales falls through, the car is not built, so no gas or oil need be purchased.

Sales are Good for All

Logically then, from this perspective, sales are good for everyone and important for a growing and/ or thriving economy.  Yet sales people have a bad reputation.

Many feel, don’t sell me, if I want to buy it I will seek you out.  The problem with this is the fact sales are a fundemental driver of our economic prosperity and the submit and hope approach really doesn’t cut it.

In short, the economy needs  sales activities and not just neccessities like food but unnecessary things like junk food sales are a key factor in vibrant economy.

Valuing the Sales Person

Over the years my wife and I have bought and sold seven homes.  We paid for the services of a professional sales person in every case (i.e.a real estate agent).

If we had not recieved value from these agents we would have stopped using them.  However, seven times without fail they helped us get better faster deals, with less effort on our part.

A service well worth paying for.  Like most I don’t like dealing with sales people, but I sure see the value.

 

Random thoughts – keeping you on your toes

Banks Sell Services – OMG what a surprise!

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The recent negative publicity afforded to the TD bank about aggresive sales practices has raised questions about Financial Services employees selling their companies products to customers.

Seriously

These stories make me laugh out loud.  The banks in Canada are not altruistic institutions, don’t kid yourself, they are in it for the money.  As a shareholder of almost every major financial institution in Canada, my view is, go for it, sell your products and services for a profit. The more sales the better.

A paid employee is complaining about their employer setting sales gaols and monitoring their progress.  And some are sympathizing with the employees and chastising the employer, really, give your head a shake.

Lets Get Real

When you ask a financial advisor for assistance, whether it is to buy insurance, get a loan or make an investment, or even just give advise, don’t kid yourself, they are not helping you out of the goodness of their hearts.

Probably, selling you a product or service (e.g., advice) to satisfy their performance goals or increase their compensation (like a commission,bonus or tip) is the prime motivator.

That is not to blanket all financial services employees with a single brush stroke.  Of course most do want to be helpful and viewed to be such.  That can after all drive both referals and repeat business ( more sales, commissions bonuses, etc).

That being said, they are still ultimately going to try and sell you something, after all that is what they are paid to do.

Am I schocked TD employees are complaining about sales targets?  Not really, getting paid while not having to work hard is probably easier.

Am I surprised that the public does not seem to be aware that employees working for a company that makes money from product and service sales are expected to be sales people?  It does make me wonder.

Speaking from Experience

Full disclosure, I worked in Financial Services for more than 37 years and sold a lot of products while providing exceptional service and I don’t feel guilty at all.  It was a job I chose and was good at.

It never occured to me to try and figure out if the customer needed the product, only if they wanted it – which really equates to need.  That is, if you want it, you need it. Who am I to question that?

 

Random thoughts – keeping you on your toes

International Day of Happiness

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March 20th is the International Day of Happiness,  unanimously adopted by  the United Nations 193 member states in 2012.  This day is intended to highlight the need to recognize the pursuit of happiness as a human right and a “fundamental human goal.”

Not New

There is no question this is a noble goal albeit not a new one.  Throughout the ages since dawn of civilization humans have philosophized about the pursuit of happiness.

Philosophers  such as Bhudda, Socrates, Confucius, Aristotle, Plato, Epicurus, Mencius, Abu Hamid al-Ghazali, and religious figures like Jesus, Abraham, Moses, and the prophet Muhammad have all comptemplared the definition of happiness, and how to achieve it in some shape an form.

My own personal philosophy of life stems from the work of plato.  I consider my happiness founded in the belief I can persue my own maximum pleasure as long as I don’t impinge on that of others.

Making it Happen

Sadly creating a worldwide environment of happiness and joy for all, while a noble objective, is hard to do.  A simple poll in my workplace today revealed few (actually I found none) aware this was International Happiness Day.

The need to declare such a day, to bring attention to the basic human requirement for global happiness is in itself unfortunate. Happiness should be endemic, the norm rather than something to strive for.

Ah, Utopia.