Get Obsessed About Innovation

5 traits that great entrepreneurs and visionaries share

Summer doldrums got you down? Not firing on all cylinders like you usually do? Well, you’re not alone and it’s better to recognize the signs of mental fatigue than to beat yourself up for missing your lofty goals. Some professionals go to the beach, lake, mountains or Europe to re-energize. But, increasingly high achievers are going to conferences of like-minded peers, even when they start on weekends and are in non-resort destination cities.

 

Case in point. Last week I attended the American Society of Association Executives annual conference in Detroit. More than 6,000 association execs from financial, insurance, health care, manufacturing and education organizations descended on "The D" as locals now call it and they weren’t disappointed.

Keynote speaker and Detroit native Josh Linkner explained that creative thinking is the driver of both disruption and avoiding being disrupted. "Regardless of your job title or industry, all of us in the corner office need an additional unwritten title of ‘Chief Disruptor,’ ‘Business Artist’ or ‘Entrepreneur,’" said Linkner, CEO and managing partner of Detroit Venture Partners and author of the business best-sellers Disciplined Dreaming and The Road to Reinvention. If you haven’t been to downtown Detroit lately, you might be pleasantly surprised.

5 obsessions of successful entrepreneurs

Linkner’s not a think tank guru who’s never run a business. He founded four Detroit-based technology companies that sold for a combined $200 million. After becoming a VC, he became obsessed with the creative thinking methods of great entrepreneurs. After interviewing 200 great entrepreneurs and thought leaders for his book, Linkner said five common traits bubbled to the surface. As an advisor, you should pay heed to each of them:

1. Insatiable curiosity. "The more obsessive you are, the more creative you become," said Linkner. He recommended asking why—not once, but at least five times in a row, borrowing a page from Toyota. Asking a deep question and then repeatedly probing "why" is not just child’s play. It uncovers layers of behaviors and assumptions that are taken for granted and are where the potential for creative disruption lies.

2. Crave what’s next. Even for wealth advisory and financial services firms that are healthy and not facing disruption, Linkner warns that you must constantly look to the future and be willing to reinvent yourself. He shared the example of legendary Duke University basketball coach Mike Krzyzewski, who trains his players to shout "Next play!" after every basket. "Coach K has trained his team to literally shed the pad every 20 to 30 seconds," said Linkner, who added that LinkedIn handed out 8,000 "What’s Next?" T-shirts to its employees the day of its IPO, so they wouldn’t become complacent and spend their days calculating the value of their stock options.

3. Defy tradition. For many companies, including wealth advisory firms, tradition can be a formidable barrier to innovation. So Linkner advised doing a "judo flip" by doing the 180-degree opposite of what tradition or experience would suggest. Rather than immediately dumping money and resources into solving a problem, try throwing imagination at it, he advised.

4. Get scrappy. True innovators like to "MacGyver" their problems, he said, in reference to the popular 1980s detective show about a protagonist who always got himself out of impossible jams with limited tools and resources. "It’s the classic mindset of the start-up, but even large, well-established organizations can adopt it by envisioning how a new start-up firm would try to gain traction in its niche. You can’t think that way without being the start-up," said Linkner.

5. Push the boundaries. Genuine disruption comes from more than just incremental change, observed Linkner. He advocates the "10X" test that his firm uses in evaluating venture investments. Does the idea have the potential for a tenfold improvement over an existing product or service that’s being offered? It could be a tenfold improvement in market size, cost, revenue or some other key metric that you use.

Conclusion

"No matter how good things are going, we can’t become intoxicated by our own success," observed Linkner. How many of these 5 obsessions do you honestly think you have? If you answered three or less, it may be time to reboot your world view.

If the city of Detroit can reinvent itself for the better, so can you.

Our blog has more about this and related topics.

 

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TAGS: Innovation, entrepreneurship, Detroit comeback

Take a Lesson from USA Women’s Soccer—Don’t Write Off “Problem” Employees

Even if you don’t know a yellow card from a yellow cab, you had to be impressed by the USA Women’s World Cup soccer championship victory on Sunday in Vancouver. Led by midfielder, Carli Lloyd, the USA Women trounced Japan 5-2 to reach the pinnacle of the world’s most popular game for the first time since 1999.

Today, the team will be the first women’s sports team of any kind to be honored with a ticker tape parade through the Canyon of Heroes in New York City.

Lloyd, who was cut from the US national team a few years ago, completed a remarkable physical and attitude turnaround with three breathtaking goals in the World Cup Championship game. Lloyd thanked her trainer James Galanis, the soccer guru who took a young girl just cut from the US Under-21 team — who actually considering quitting the sport — and helped teach her how to be a professional.

“All this from a woman who looked lost and out of sorts all through the [early round games], turning the ball over and uncomfortably shoehorned into a holding midfield role. She had one assist, no goals and no impact,” opined NY Post sportswriter Brian Lewis.

 

That is, until coach Jill Ellis took Lloyd aside and told her she was going to put another player into her regular midfield spot and push Lloyd up the field and let her lead the attack. Coach Ellis had faith in Lloyd to be the engine of the U.S. offense.

 

What a difference when the person you report to has faith in you in tough spots. Before this Women’s World Cup started, ex-US coach Pia Sundhage (now coaching Sweden’s national team) told the New York Times, “Carli Lloyd was a challenge to coach, by the way. When she felt that we had faith in her, she could be one of the best players. But if she began to question that faith, she could be one of the worst. It was so delicate, so, so delicate.’’

 

Conclusion

In addition to Lloyd’s heroics, the USA women did NOT resort to showboating or trash-talking after jumped out to a stunning 4-0 lead in the first 16 minutes of the game—the soccer equivalent of scoring four touchdowns in the first quarter of the NFL Super Bowl. They held their composure as Japan—like Germany and Sweden in earlier games—become frustrated and grabbed, slide-tackled and otherwise got more physical to try to slow down the potent USA offense.

Kudos also to 35 year-old Abby Wambach, longtime team captain and aging veteran, gracefully accepting a substitute role after leading the team for over 10 years or rebuilding and tinkering. re this:·Facebook23·Twitter4·Google·Whatsapp·Email

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In sports, as in business and client relationships, chemistry and camaraderie can be more important than technical competency, when it comes to determining the right fit for the team you want to build.

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TAGS: USA Women’s Soccer, Carli Lloyd, problem employees, out of the box, ticker tape parade

Are You Ultra-Productive or Ultra Self-Destructive? (Part 2)

As we discussed in Part 1 of this post, Dr. Travis Bradberry, co-author of the bestseller Emotional Intelligence 2.0, shared 11 Things Ultra-Productive People Do Differently in a blog we help publish with our clients New York Society of Security Analysts and Naylor, LLC.

Directionally, we think Bradberry’s tips have merit, but like everything else, should be taken with a grain of salt which we’re happy to supply.

We know most of you are already among the most productive, highly motivated and driven people in our society. So you want to be more productive, not self-destructive, as you strive for a higher and higher bar each day. We commented on the first 5 in our previous post.

6. They Say No

No is a powerful word that ultra-productive people are not afraid to wield. When it’s time to say no, they avoid phrases such as I don’t think I can or I’m not certain. Saying no to a new commitment honors your existing commitments and gives you the opportunity to successfully fulfill them. WE COULDN’T AGREE MORE. We also believe you should try to avoid non-committal words such as “maybe”, “perhaps”, “let me think about it” and “let’s just play it by ear”… especially when you really mean “NO!”

Researchers at the University of California in San Francisco shows that the more difficulty that you have saying no, the more likely you are to experience stress, burnout, and even depression. Learn to use no, and it will lift your mood, as well as your productivity.

7. They Only Check E-mail At Designated Times

Ultra-productive people don’t allow e-mail to be a constant interruption. In addition to checking e-mail on a schedule, they take advantage of features that prioritize messages by sender. They set alerts for their most important vendors and their best customers, and they save the rest until they reach a stopping point. Some people even set up an auto-responder that lets senders know when they’ll be checking their e-mail again. We’d like to add just a few nuances here. It’s OK to keep your email pop-up and instant messaging on all the time—just have the discipline to avoid responding instantly. Again, follow Bradberry’s advice and respond only at designated times of day. Also, make sure you ALWAYS proof your email replies carefully before hitting the SEND button. Once you get into this habit, you’ll be surprised how many errors of grammar (and bad judgment) you’ll prevent yourself from making.

8. They Don’t Multitask

Ultra-productive people know that multitasking is a real productivity killer. Research conducted at Stanford University confirms that multitasking is less productive than doing a single thing at a time. The researchers found that people who are regularly bombarded with several streams of electronic information cannot pay attention, recall information or switch from one job to another as well as those who complete one task at a time.

Researchers found that heavy multi-taskers—those who multitask a lot and feel that it boosts their performance—were actually worse at multitasking than those who like to do a single thing at a time. The frequent multitaskers performed worse because they had more trouble organizing their thoughts and filtering out irrelevant information, and they were slower at switching from one task to another. Ouch.

Our take? You might be able to switch quickly between two, three or even more tasks on your plate. But don’t fool yourself into thinking you’re really working on more than one thing at a time with any sort of efficiency. Be fast. Don’t be foolish.

9. They Go off The Grid

Don’t be afraid to go off grid when you need to. Give one trusted person a number to call in case of emergency, and let that person be your filter. Everything has to go through them, and anything they don’t clear has to wait. This strategy is a bulletproof way to complete high-priority projects. As we’ve mentioned before in this blog, we try to take a 24-hour break from all forms of screen and technology every single week. In HB’s case it’s from 12 noon Saturday to 12 noon Sunday most weeks. Try it. It works great and you’ll come back recharged, not hopelessly out of touch.

10. They Delegate

Ultra-productive people accept the fact that they’re not the only smart, talented person in their organization. They trust people to do their jobs so that they can focus on their own. Our take? Hire people not like yourself who are especially good (or at least enjoy doing) things that are not in your wheelhouse. Our client, Gary Klaben of Coyle Financial Advisors in Chicago, has a great piece coming out soon about not being the “HIPPO” at your organization (only the Highest Paid Person’s Opinion counts).

11. They Put Technology to Work for Them

Technology catches a lot of flak for being a distraction, but it can also help you focus. Ultra-productive people put technology to work for them. Our advice—be selective about which new tools, apps and toys can really make you more productive. You don’t want to be a slave to them just to look cool and cutting edge. You also have to factor in time for the learning curve, updates, tech support, etc. before you can really determine if the next “shiny object” in your tool-belt is really making you more productive.

Conclusion

Again, explore any and all habits, tools and philosophies that can make you more productive. But you’ll never get too 100 percent. That’s okay. If you’re reading this post, you’re probably more efficient than the vast majority of your peers, not to mention the average American worker.

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TAGS: David Bradberry, Finance Professionals Post, 11 Things Ultra-Productive People Do

What Professionals Can Learn from Bumper Stickers

I saw a great bumper sticker on the drive to work yesterday:  “Sorry for Driving So Close in Front of You.” If that wasn’t snarky enough, the message was in small type, so you had to be on the verge of tailgating the driver to read it. DISCLOSURE—I have a lead foot at times, but I was at a stoplight when I came across this particular bumper decal.

The point is, things aren’t always what they seem. It’s all a matter of perspective. Depending on whom you ask, your business or practice is  either on the verge of extinction or about to enter a golden age of customer/client engagement, connectivity and profitability. The truth probably lies somewhere in between.

I wrote a story about this phenomenon last week for Association Adviser, published by one of our longtime clients, Naylor, LLC. It's geared for trade association executives. But since many of you belong to associations, serve on boards of associations or partner with associations as you build out your niches, should find it a fun, but poignant read.

Have a great weekend and let me know if you see any great bumper stickers on the road. As the father of a newly minted teenage driver, I had to laugh (and cry) when I saw this one the other day.

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TAGS: Bumper stickers, gaining a new perspective, learn while driving

Are You Ultra-Productive or Ultra Self-Destructive?

Many of you may not know that we publish The Finance Professionals Post – a 45,000 circulation eNewsletter for young Wall Street professionals---in conjunction with the New York Society of Security Analysts and another of our clients, Naylor, LLC.

While we’re mostly focused on business development and sponsorship activities, we thought this week’s lead story, 11 Things Ultra-Productive People Do Differently, might be of interest.

Now, before you go out and try to emulate the 11 traits of hyper-productive people identified by Dr. Travis Bradberry, co-author of the bestseller Emotional Intelligence 2.0, keep a few things in mind.

If you’re really honest with yourself, even doing 5 of 6 of these things on a consistent basis is a significant achievement. And that’s on top of the fact that most of you are already among the most productive, highly motivated and driven people in our society.

So, here are some modifications to the 11 tips. Hopefully they’ll help you become more productive and prevent you from beating yourself up when you fall short for short of the already high bar you set for yourself.

1.They Never Touch Things Twice. Not bad advice, but we recommend the FAT approach. Don’t let piles accumulate (physically on your desk or electronically in your inbox). Take 1 of 3 actions: File It, Action on It, or Throw It Out! Again, you have only three choices.

2.They Get Ready for Tomorrow Before They Leave the Office. Great advice if you can really shut down an hour or so before you need to leave for a ballgame, social event client meeting of child/grandchild’s recital. For most of us, that’s not realistic. Here at HB, we try to come in half an hour early every day. First order of business--review your time logs from the previous day and invariably you’ll capture those pesky items on the to-do list that keep falling into the gray area between urgent and eventual. By now you know what to do with them.

3. They Eat Frogs. We agree with Bradberry that tackling the toughest things first thing in the morning is a great anti-dote to procrastination. But, we don’t believe in sprinting down the field and tackling your nemesis first thing, without being properly warmed up! That's a surefire way to get injured, if not killed. Same goes for your brain. We have a variety of mental warm-up exercises we can suggest and I’m sure you have your own favorites. Please share your favorites with us. Once warmed up, definitely go out and tackle your nemesis and eat those frogs!

4. They Fight the Tyranny of the Urgent. We agree with Bradberry that “productive people are willing to ignore or delegate the things that get in the way of their performance.” We’d like to see more concrete examples of how to do this. Here are a few things we recommend: Turn off you email, cell service and instant messaging. Route your phone calls to voice mail and try putting tasks into certain hours of the day in your calendar—and leave yourself plenty of cushion between tasks.

5. They Stick to the Schedule During Meetings. Volumes have been written about this. Just make sure you’ve allotted enough time for EVERYONE at the meeting to speak up. Too often, the quietest people in the room have the most valuable things to say. They won’t step up to the plate if the meeting organizer is a time-Nazi who didn’t consider others when setting up the meeting agenda.

Conclusion

Next week, we’ll weigh in on Tips 6-11 from Bradberry’s hyper-productivity list.
Our blog has more, as does the FREE Resources page of our website.

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Is Modern Technology Overrated?

We know it’s not cool to suggest that the tech revolution is overhyped. But, that’s how many professionals feel sometimes regardless of age.

I just spent two days unplugged from the grid over the long weekend. No email. No texting. No downloads from the cloud. Guess what? The world didn’t end. It was actually pretty liberating. I used a landline phone with no problem. I took some notes with a pencil and paper and actually looked at a paper map while driving and made all the right turns without GPS, Siri, or the reassuring voice of an anonymous female voice with her fake British accent. And when I returned, my email inbox was full, but no excessively.

I’m no Luddite. It’s just my patience wears when all the new tech tools and gadgets supposedly making my life easier don’t work—or constantly need upgrading. Sometimes it’s just easier to use your brain in an ad hoc fashion than let technology solve your problems.

Real world examples

I frantically finished an essential piece of work Friday afternoon, diligently saved to my hard drive, cloud and external drive. I prepared to shut down the computer for the long weekend when I got the infamous warning that essential upgrades were needed on my PC--27 in all—“Don’t shut down or turn off your machine.”

Finally out of the office, already late, I had a small auto malfunction. No big deal except I accidently accepted an app upgrade on my Smartphone while trying to get AAA roadside assistance. It took 30 minutes for the upgrades to load—which meant 30 minutes I couldn’t call, email or text for help or let me family know where I was or what was going on.

Then I had to find directions to my niece’s out of state wedding at an obscure bed and breakfast on the New England coast line….Mapquest, Google Maps etc. kept forcing me to GPS connect to all the local hotels, restaurants and gas stations in the area, when all I really wanted was turn by turn directions. The Smart security alarm in my home malfunctioned while I was away, so the fire department apparently came by for a midnight false alarm. I didn’t score any points with my neighbors for that won and it cost me $250 to boot.

Is tech really making us better off?

As Times columnist Paul Krugman observed yesterday, the new technologies are “more fun than fundamental. Information technologies that excites the Twittering classes may not be a big deal or the economy as a whole.” What’s more, “the new technologies have yielded great headlines but modest economic results,” continued Krugman. And they aren’t really making us more productive, just more wired, he implied.

While computers, artificial intelligence and robo advisors are creeping into our lives more and more each day, there are certain things that the pliable, creative human brain can do that machines simply can’t. Robert Shiller, the renowned economist and Yale professor, noted the other day we need to teach students to outsmart robots. In other words, we need to make education more “business focused” and teach about the “creative entrepreneurial process that presumably computers cannot duplicate.

Many of you are financial advisors, attorneys or CPAs. Let machines and other technologies handle the repetitive, low-margin, uncreative aspects of your work and free up your brain for the high margin, creative solutions that your clients expect from you.

Conclusion

As our client Gary Klaben of Chicago-based Coyle Financial Advisors noted in a blog post that we helped him with last fall, “Use each competitive threat as motivation to “up your game” and further refine your target market and the value you provide to your clients—and your clients’ heirs.”  Also see Derek Markham’s post for more Overrated Technologies and Their Overlooked Alternatives.

Our blog has more, as does the FREE Resources page of our website.

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The Aging Process Hits Us All

It’s hard to figure out what the best age is. 20? 30? 39? But, at some point in life you go from wishing you were older (think teens, and new entrants to the workforce) to wishing you were younger (almost everyone over 40).

If you or a client are worried about memory loss or diminished mental “processing speed,” just know you’re not alone. As Jane Brody noted in her new series about aging, memory issues become more apparent in the Medicare years, but gradual changes in cognitive function actually begin decades earlier.” What tends to happen, she explains, is that these changes are often masked by the brain’s excess of neurons and the ability to lay down new connections throughout life.

What to do?

You can laugh about misplacing your cell phone or forgetting where you parked the cars. That’s a normal part of the aging process. Or you can be a good Boomer and fight the aging process till you die.

As you might expect, Brody advocates getting enough sleep, being physically active, exercising regularly, drinking in moderation and keeping your brain sharp.

Here are some other tips that may surprise you:

1. Be well educated. Even if you missed out on a good education early in life, experts say it’s never not too late to engage in intellectually stimulating activities. Take courses online or at a community college. Read books, participate in discussion groups, and attend lectures and other cultural activities.

2. Learn complex new tasks like woodworking, home brewing or digital photography, which can improve cognitive performance. Just make sure these activities are personally rewarding or meaningful, not frustrating or just busy work.

3. Stay active in leisure or volunteer activities as social interaction is a strong predictor of healthy aging.

Finally, leverage certain aspects of the brain that actually get better with age. Medical experts say the older brain retains “plasticity” and can actually have better depth of comprehension and widsom gleaned through experience than a younger brain.

Conclusion

Aside from getting your AARP card at age 50, no one is going to send you a memo telling you that you’re officially old. Just as you and your client has a magic retirement number, you should take steps to figure out your cognitive impairment number. Like Brody and others, we recommend “Staying Sharp: 9 Keys for a Youthful Brain Through Modern Science and Ageless Wisdom,” by Henry Emmons and David Alter.

Best, HB

Our blog has more, as does the FREE Resources page of our website.

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Writing Without the Letter "E"

I once had a great swim coach named Doug Stern. Doug was an aquatic innovator who liked to use the principles of “reduction” to help us get a feel for the water. While most coaches encourage their swimmers to use hand paddles, pull buoys, elastic bands and weight training, Doug had us swim with tennis balls in our hands. Then we tried to swim a few laps with our eyes closed. Then we swam a few laps with our hands in the karate chop position and finally with our hands balled into a fist. Finally with our eyes open, we’d start swimming with our normal motion and guess what? Our hands felt like enormous paddles. It seemed we had incredible sensation in each finger with three times the power of before.

“Notice what you notice!” Doug would always roar above the thrashing in the pool. It seemed like we were swimming downhill as we sliced confidently through the water using muscles and senses we never knew we had.

Make the writing process less painful

Sometimes you have to do without certain crutches or senses to understand what you’re truly capable of. Let’s take writing. Some of you love the process, many of you hate it. But, like paying taxes and getting “the pipe” exam once you turn 50, we all have to do it. Whether you’re communicating with clients, churning out a blog post, penning a short article or muscling through an e-book, we all know we tend to get lazy. We could be more precise when we put pen to paper, but it’s too easy to fall back on our tried and true sayings, or our small arsenal of adjectives and famous quotes.

My 6^th grader was staying up way too late the other night on the verge of tears over a writing assignment. Turns out he had to write a 500-word story based on the picture below. The only catch? He couldn’t use the letter “E.” He was stuck at 411 and fading fast. How hard can that be, I thought to myself. I smith words all day long. I love baseball. I don’t get writer’s block.

Turns out pretty hard.

Sure there are 25 other letters to choose from, but without “e”—the most common letter in the English language--you can’t use “the.” That means can’t use often vague pronouns such as "he," "she," "they,” “me”, “her” and “them.” You also lose out on common functional words such as “when”, “where”, “these”, “those” and “every.” You not only have to flex your vocabulary muscles, but you must be painfully more precise.

Try going a day without using the letter “e” in any of your an e-mails or client communications. Can’t be done, you say? Well, you should read Gadsby, the 1939 novel by American author Ernest Vincent Wright—50,000 words without “e.” Click here for more on e-less writing.

As my colleague, Mark Klimek points out, writing without your favorite words and letters "is a maddening exercise in many ways, but it’s also a good reminder of the importance of really thinking through what you want your communication strategy to convey.”

Conclusion

Notice what you notice about yourself and the reaction to your written communications when you take away your language crutches and force yourself to be more precise. Once you have your “e” privileges back, it will be like getting a double dose of creativity. Chances are you’ll glide through your next project in a more streamlined and confident fashion.

Our blog has more, as does the FREE Resources page of our website.

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TAGS: Writing without using “E”, Gadsby, Ernest Vincent Wright

Out Top 5 Posts of 2015

Hard to believe, but the year 2015 is already one-third in the books. If nothing else, our big prediction for 2015—be ready for anything, and don’t stop getting ready—has turned out to be fairly prescient. Obviously, few could have predicted the earthquake in Nepal, the riots in Baltimore, the record snowfall in Boston or the New York Mets having the best record in Major League Baseball. But, by the same token, some things we expected to happen didn't. How many economists and Wall Street pundits really predicted that four months into the new year, the Fed still wouldn't have pulled the trigger on interest rates?

Our most popular posts of 2015

1.What We Can Learn from the Costa Ricans

2. The Power of Doing Your Own Research Studies

3. Do You Want Young Hires Well-Educated, Adaptable or Self-Sufficient?

4. I Do My Best Thinking in a Tube

5. Don’t Penalize Intelligence

More importantly, at a time when volatility and disruption is the “new normal,” learn to enjoy life no matter what it throws at you. “Pura Vida” as they say in Costa Rica, where my family and I visited over the Holidays. It’s one of the few places I’ve found that lives up to the hype. Incredibly diverse topography. Endless beaches. Active volcanoes. More species of plants and animals than any country in the world. Adrenalin-pumping zip-lines. Some of the happiest, healthiest and best educated populations in the world despite being far from the wealthiest. Makes you think twice about burning the candle at both ends chasing some elusive number of gross income or retirement “nut” that you and your clients think you need to be happy.

Burnout worries aside, you also showed that you’re highly inquisitive. As we discussed in our #2 ranked post, The Power of Doing Your Own Research Studies, having your own branded research report is one of most powerful weapons you can have in your credibility marketing arsenal. After word of mouth referrals, it’s hard to beat the power of “according to YOU!”

Speaking of inquisitive, now is the time of year that many recent grads are flocking to your door or checking you out online. Do You Want Young Hires Well-Educated, Adaptable or Self-Sufficient? Well, apparently you want adaptability as we discussed in our third most popular post of 2015. Again, we don’t necessarily need people who know everything. We need people who know what they don’t know—and how to fix that--in these highly unpredictable times.

As our No. 4 post (I Do My Best Thinking in a Tube) taught us, great ideas can come to you at any time, any place and anywhere. Just make you’re not hopelessly distracted so you can capture them. Find a way to carve out time every day to do nothing else but think for a few minutes. It’s not easy most days, but you’ll be amazed at what you come up with.

Finally No.5 Don’t Penalize Intelligence. When everyone in a highly competitive marketplace has access to the same information, it’s not about how much you know or how smart you think you are--it’s about how quickly you can adapt to a changing landscape. From baseball to investing, any new edge in intelligence or tools will be fairly quickly absorbed by the wisdom of the crowd. How quickly can you and your organization pivot?

Conclusion

Do your own research, carve out time to think, seek people who are adaptable and most of all enjoy life. That’s it in a nutshell. Have a great second third of 2015.

Our blog has more, as does the FREE Resources page of our website.

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Don’t Penalize Intelligence

Slowly but surely spring is coming to the Northeast. There are no leaves on the trees. It’s raw and rainy most days. But, Major League Baseball is underway and soon high schoolers, Little Leaguers and softball teams will be doing their best to play ball in the cold, mud and slop.

About this time every year, you start to see articles, posts and tweets lamenting how the game has changed. Depending on whom you ask, today’s players are either faster, bigger, stronger and smarter than they used to be. Or, they’re lazier, softer, more coddled and less committed to the game than “back in my day.”

One thing’s for sure—the game’s a lot more measurable. You don’t need to be a sabermetrician (empirical analyst of baseball) to see that since testing for performance-enhancing drugs began in the mid 2000s, home runs and scoring are way down, batting averages are also plummeting and strikeouts are way up.

Getting the edge when everyone’s playing “Money Ball”

Hitters are certainly facing more fresh-armed specialist relief pitchers than they used to. And, thanks to the Big Data revolution of the past 15 years, when hitters do make contact, more of their hits are turning into outs. Just look at their “Babip” (batting average on balls in play). Are the fielders really that much better? Probably not. But players and their coaches have a lot more ways of anticipating where balls will be hit….and batters have fewer opportunities to “hit em where they ain’t.”

According to Baseball Info Solutions (BIS), teams in 2011 used fewer than 2,500 “shifts” on balls in play…..Yes, there are folks who’ve made a business out of keeping track of things like that. Last year, BIS said Major League team used more than 13,000, and the company said its software actually “recommended” about 40,000 shifts. So expect to see more.

You’re certainly seeing it in the college game and it’s creeping into the high school game according to my older son who plays at that level. I’ve even seen it used against my 11 year-old’s team—he’s a lefty who likes to go “oppo” on outside pitches and don’t think the other teams don’t notice!. More youth coaches using iPads to keep score with a Game Changer app that can stream kids’ games pitch by pitch, to parents who are caught in traffic or stuck at the office.

As Steve Kettmann observed earlier this week in The New York Times, “as baseball managers get younger and better educated, much of the fresh energy in baseball today comes from putting analytical tools to work in rethinking old assumptions.”

Our take? Substitute the word “portfolio” for “baseball” and “market” for “game” and this argument should start to sound familiar to many of you. As Detroit Tigers president Dave Dombrowski quipped last week, “I don’t think you should penalize intelligence.” The burden is on hitters and their coaches to adjust, he added.

Conclusion

Over the long-term, batting averages like stock market returns, will always regress to the mean (.268 and 8%, respectively if your keeping score). Any new edge in intelligence or tools will be fairly quickly absorbed by the wisdom of the crowd.

Our blog has more, as does the FREE Resources page of our website.

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TAGS: sabermetrics, Baseball Information Solutions, Dave Dombrowski, Detroit Tiger, Steve Kettmann, don’t penalize intelligence

March Method or Madness, Part 2

As we discussed in Part 1 of this post, the annual NCAA men’s basketball tournament is a great way to build office camaraderie and glean new insight into your co-workers’ risk tolerance, competitiveness, decision-making strategies and data crunching skills. Sorry HR, softball team and Christmas party planning committee—you just can’t beat the March Madness office pool for bringing everyone together to have a great time and some friendly trash talking and competition.

I should know. I’m getting my share of it right now.

As NY Times columnist, Neil Irwin observed, the other day, “The [NCAA] tournament is a fun way to test your predictions in a system that, like financial markets and most forms of sports betting, reward you for taking an against-the-grain pick that proves accurate."

Our take? The tournament seedings—like many financial data services—have a number of “mispricings” and other aberrations you can try to exploit. Big brand names tend to be over-valued and lesser-known growth teams tend to be undervalued. Thanks to March Madness, millions of people in the Northeast will stay up till the wee hours of the night sweating out the final score of the North Dakota State vs. Gonzaga University game.

Personally, I've learned you can also turn to the Las Vegas odds for each game, use the Ratings Percentage Index (RPI), “points per possession,” or “turnover differential” or other advanced metrics. You can also go to the ratings services like FiveThirtyEight, Jeff Sagarin and Ken Pomeroy – think Morningstar, Fitch and S&P for hoopsters. You can also throw darts at the bracket or go with the trusted brand names like my wife always does--UCLA, Indiana, Michigan State, Kansas and North Carolina. They’re the large cap stalwarts of bracket-dom. They’re perennial returnees to the tourney even if the 2015 squad is not likely to return back to campus with the trophy. My wife uses the “brand name” strategy every year and usually cleans up in our family pool and at her work. I don’t think she even knows which state Butler and Valparaiso are located (hint it’s the same one).

No analysis paralysis for my better half

According to Irwin, March Madness is a lot like investing. It is easy to invest in flashy companies that are widely known and whose products you use. But often the highest-return investments are “value stocks,” companies that are more obscure and less popular. In this metaphor, Butler, Harvard and U.C.L.A. are the Google, Facebook and Apple of the N.C.A.A. tournament. Wichita State and Oklahoma State are the obscure industrial companies that aren’t talked about on the financial pages very often but offer high potential returns.

Personally, I have a crude, but effective model that usually puts me in the top 10 or 15 percent of any pool I enter. I rarely win, but it keeps me in the game till the very end of the tourney. This year, I had a very hectic month leading up to the tourney. I didn’t stick to my discipline and went with my gut rather than my head. BIG MISTAKE.

Villanowhere?

I second guessed myself and selected Villanova to win it all. On the surface, not a bad pick. The Wildcats were one of the top four seeded teams. They boasted a 33-2 record coming into the tournament, had a 17-game winning stream and were champions of the highly competitive Big East Conference.  O.K. That’s the analytical part. But then I let my emotions get in the way of logic because I grew up near the Villanova campus. My folks and extended family still live there. Nova’s head coach, Jay Wright, was a classmate of mine at Bucknell University. All the stars were in alignment.

Unfortunately, Nova went down to a red-hot NC State team 71-68. Season is over. My brackets are “busted” and I’ll have to endure two more weeks or razzing at the office and several more days of getting dissed by my wife and kids at home.

This year, I’ll take my lumps like a man and go back to basics in 2016. No more watching games or getting emotionally attached to any of the teams. Just run the numbers, play the index, check the scores the next morning and pencil in the winners.

Our blog has more, as does the FREE Resources page of our website.

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TAGS: March Madness, office camaraderie, Neil Irwin, Villanova, Jay Wright, busted bracket 

March Madness or Method? Part 1

In many parts of the country, there’s still too much snow on the ground to hear lawn mowers humming or baseball bats cracking. But trust me, spring really is here. I know because the annual NCAA men’s basketball tournament—a.k.a March Madness—is underway. Just don’t expect a highly productive month around the office.

Depending on your point of view, the three-week long hoop-fest is either the biggest office productivity killer of the year, or a fascinating window into human behavior, biases and predictive modeling. March Madness is also pretty good for building camaraderie, even if the HR wonks will complain that it’s an unsanctioned company event, that it’s male- and jock-biased and that it’s basically an illegal gambling operation conducted on company premises, using company time and computers. Again, review the previous sentence about “camaraderie.”

Level playing field

It’s also one of those rare times when Ted from sales, who’s 6-foot-6 and played power forward in college, can get schooled by 5-foot-2 Mary from accounting, who’s never set foot on the hardwood, much less played the game. How? Because she knows how to fill out her brackets.

The format is simple; 64 of the best college basketball teams are invited to play each other in a single-elimination, winner take all tournament. Win and you advance to the next round. Lose and you go home. No best of seven, no do-overs. No bonus points for giving it your best. You could be 34-0 during the regular season, like Kentucky, and have an off night against unheraled Hampton University and that’s it. Season over. See you in November.

In most office pools, you print out the entire tournament “bracket” before the games begin. You predict which team you think will win each matchup and throw a few bucks into the pot. Most folks can fill out their bracket in 10 minutes or less, whether using pencil, pen or an app. If you end up winning the pool, you can make anywhere from 20- to 1,000-times your money back. If you lose, the max downside is usually less than $20, so you don’t even need puts or stop loss orders. Either way, it’s a pretty good ROI for three weeks of fun.

So how hard can it be to win? Everyone has access to the same information--they even give you each team’s won-loss record as well as their seeding (i.e. ranking) in the tournament. Just pick the team with the better record or higher seeding and you’re good to go, You don’t even have to guess the score or the point spread. Just who will win.

So why does Warren Buffet offer a $1 billion cash prize (that’s with a “B”) to anyone who can pick a perfect bracket and guess the outcome of all 63 games correctly?
Because, it’s almost impossible to predict all the upsets. It’s like trying to pick which early stage startup company with no revenue or earning is going to go public next year. In fact the odds of winning March Madness are worse than the lottery--about 4.3 billion to 1. The odds are beyond stacked against us, but tens of millions of us can’t help ourselves from filling out at least one bracket every March—even if we don’t follow college basketball or never played the game.

Conclusion

In our next post, we’ll tell you about some of the research services, rating agencies and indices you can use to help you along. Hint: It’s pretty hard to beat the wisdom of the crowd? Any of this sounding familiar?

Our blog has more, as does the FREE Resources page of our website.

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TAGS: March Madness, wisdom of the crowd, brackets, office camaraderie

I Do My Best Thinking in a Tube

I had an MRI the other day. Not sure how the results will turn out, but it was probably the best 30 minutes of thinking I got done last week. With multiple deadline shifts, rescheduled appointments galore and several late season snow/ice storms wreaking havoc here in the Northeast, the "tube" was a welcome respite from the daily grind.

Some people get freaked out in the claustrophobic confines of an MRI machine, but I find it relaxing. There’s something about the rhythmic humming and clanging in the background, with ear plugs and decent music in the headphones that helps me relax and block out all the “real noise” in life. You can’t move. You can’t talk. You can’t even cough, sneeze or scratch your nose. But most importantly, the MRI tube is a very tight space. You wouldn’t be able to reach for your smartphone or tablet if you got bored and somehow managed to smuggle it into the exam room under your gown.

So, you lie there and think…and think some more.

I’ve never had the patience for meditation, deep breathing or yoga (it's like a 90-minute warm-up for a game that never happens). But, the MRI tube literally forces you to block out the world and all the distractions of email, cell phones, meeting reminders, unexpected calls from your spouse or kids and impromptu “pop ins” from a work colleague who’s bored.

Here’s a passage from the Focus Manifesto blog written by Leo Babauta, author of the book Focus: a simplicity manifesto in the age of distraction--“Never have the distractions been so voluminous, so overwhelming, so intense, so persistent as they are now. Ringing phones are one thing, but email notifications, Twitter and Facebook messages, an array of browser tabs open, and mobile devices that are always on and always beeping are quite another. More and more, we are connected, we are up to our necks in the stream of information, we are in the crossfire of the battle for our attention.”

What to do? Kevin Daum had some good suggestions in a recent Inc. Magazine piece: How to Clear Your Head in 15 Minutes.

Conclusion

We’re not suggesting that you schedule unnecessary medical tests just to clear your head. But, think about all the ways in which you’re distracted during the day—and how much more you could get done (in less time) if you could really find a way to focus.

Try this exercise for a month. Once a week, find a time and a place where you can really think and focus uninterrupted for 20-30 minutes…..Do it at the same time or place every week.

I know several of you have had success with this technique in the swimming pool, the steam room or the sauna. After a month, review your progress and see how many mental blocks you’ve been able to bust through. You might be surprised. We’d love to hear from you about how you did.

Let’s have a great week.
Best, HB

 

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