1.01.2005

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» TIP: So you've got the job. Now what?
» TIP: Only the paranoid survive
» TIP: Learn to swim, not drown in the metrics
» RANT: When companies outgrow their spreadsheets
» MISC: Meeting with my auto-insurance agent
» MISC: Give your Fear a Purpose
» TIP: Focus Like a Laser for explosive success
» MISC: Sometimes you just can't win
» TIP: "Where do you see yourself in five years?"
» MISC: Your two cents do matter

TIP: So you've got the job. Now what?

via CIO - ...There are three ways to start: You can spend time figuring out what you just got yourself into, or go right in and "fix" everything or continue "business as usual." The right answer is a combination of all three, naturally; it all depends on what you just inherited.

Experience should tell you that if there is no current crisis (if only we could be so lucky) then the right way to get your feet wet is to become an observer and a student of your new environment... This is a time for meetings to understand what is good and bad about your new organization and formulate a go-forward strategy. Spend time with your direct repots and their direct reports, find out what they do, what their skills are, what they think is right and wrong. Since you are the new person, they may not trust you yet, so keep the groups small and make it personal. And don't have managers in with their reports!

Once you have a sense of what your team is feeling, then it's time to talk with your clients. Look first for the business unit leaders and get recommendations from them as to which of their people you should talk with. One school of thought is to do your internal client's business for a day. There is no better way to learn about issues than to experience them first hand. Lastly, talk to you new boss. Now that you have some data points you can have a better, more detailed discussion on what your focus should be...

you ask six questions to everyone you meet. The one that is most relevant is, "If you were me, what would you focus attention on?" The questions you ask should provide you with a starting point for prioritizing the things you need to do and the things you want to do...

  • "What do you want to keep?"
  • "What do you want to change?"
  • "What do you want me to do?"
  • "What are you afraid I'll do?"
  • "What else do you want to ask me?"

But, what if there are problems when you enter the organization - problems that can't wait months to be resolved? Remember, they looked long and hard for you because you had something they needed in the organization. This is when you get your hands dirty and become an instant part of the fix. In other words, go deep toward understanding the issues. Attend meetings you wouldn't normally attend and work closely with the hands-on folks. Use the phrase, "At my last company we did it this way" sparingly because it gets old really fast. This is also the time to use all of your expertise and experience to analyze the situation and make decisions. Remember some of your best decisions are made before you have all the facts because you instinctively know what needs to be done. Take copious notes so that when the crisis is over you know how to prevent if from happening again.

This is also a great time to see what process and/or procedures are in place and how they affect the outcome...

So, that leaves us with "business as usual." There are many things that could be said about this but then I suspect that your predecessor would agree that it really isn't the right way to go. If the people that hired you wanted business as usual, would they have hired you? Understand that you are bringing ideas and methodologies that you have picked up over time. Now is the time to leverage them and create synergistic solutions. Everything that gets fixed isn't necessarily a problem, however: Creating efficiencies or cost effective solutions for things that aren't broken can contribute as much as fixing broken processes.

Your first hundred days will tell your new company what you are all about. It is also the best time to introduce change because that's what you were hired for.

Category: C++ Quant > Land the Job You Want

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TIP: Only the paranoid survive

Business success contains the seeds of its own destruction, former Intel CEO Andrew S. Grove wrote. The more successful you are, the more people want a chunk of your business and then another chunk and then another until there is nothing left. I believe that the prime responsibility of a manager is to guard constantly against other people's attacks and to inculcate this guardian attitude in the people under his or her management.

The things I tend to be paranoid about vary. I worry about products getting screwed up, and I worry about products getting introduced prematurely. I worry about factories not performing well, and I worry about having too many factories. I worry about hiring the right people, and I worry about morale slacking off.

And, of course, I worry about competitors. I worry about other people figuring out how to do what we do better or cheaper, and displacing us with our customers.

But these worries pale in comparison to how I feel about what I call strategic inflection points... a strategic inflection point is a time in the life of a business when its fundamentals are about to change. That change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end.

Strategic inflection points can be caused by technological change but they are more than technological change. They can be caused by competitors but they are more than just competition. They are full-scale changes in the way business is conducted, so that simply adopting new technology or fighting the competition as you used to may be insufficient. They build up force so insidiously that you may have a hard time even putting a finger on what has changed, yet you know that something has. Let's not mince words: A strategic inflection point can be deadly when unattended to. Companies that begin a decline as a result of its changes rarely recover their previous greatness...

We live in an age in which the pace of technological change is pulsating ever faster, causing waves that spread outward toward all industries. This increased rate of change will have an impact on you, no matter what you do for a living. It will bring new competition from new ways of doing things, from corners that you don't expect.

It doesn't matter where you live. Long distances used to be a moat that both insulated and isolated people from workers on the other side of the world. But every day, technology narrows that moat inch by inch. Every person in the world is on the verge of becoming both a coworker and a competitor to every one of us, much the same as our colleagues down the hall of the same office building are. Technological change is going to reach out and sooner or later change something fundamental in your business world.

Are such developments a constructive or a destructive force? In my view, they are both. And they are inevitable. In technology, whatever can be done will be done. We can't stop these changes. We can't hide from them. Instead, we must focus on getting ready for them. The lessons of dealing with strategic inflection points are similar whether you're dealing with a company or your own career. If you run a business, you must recognize that no amount of formal planning can anticipate such changes. Does that mean you shouldn't plan? Not at all. You need to plan the way a fire department plans: It cannot anticipate where the next fire will be, so it has to shape an energetic and efficient team that is capable of responding to the unanticipated as well as to any ordinary event. Understanding the nature of strategic inflection points and what to do about them will help you safeguard your company's well-being. It is your responsibility to guide your company out of harm's way and to place it in a position where it can prosper in the new order. Nobody else can do this but you. If you are an employee, sooner or later you will be affected by a strategic inflection point. Who knows what your job will look like after cataclysmic change sweeps through your industry and engulfs the company you work for? Who knows if your job will even exist and, frankly, who will care besides you?...

Category: C++ Quant > Fix the Job You Got > Something vs Nothing

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TIP: Learn to swim, not drown in the metrics

It has been said that what gets measured gets done. But this is not strictly true - managers today are deluged by a sea of metrics that are completely irrelevant to the task at hand, Floyd blogged. In fact, as early as the 1960's, academic researchers were discovering that top executives rarely if ever used or relied upon the stacks of reports that were painstakingly produced and dutifully delivered to their desks each month. Instead they were much more likely to rely upon the news, hallway conversations, rumours and gossip in making business decisions.

The truth is that what gets managed gets done, and choosing which metrics to manage is the most highly levered strategic decision that an organization of any size can make. This indeed is "the hard part". Choosing what is important is both science and art and requires attention to an uncommon mix of disciplines - psychology, business strategy engineering, systems science, finance etc. And you must choose. As a rule of thumb, the human short-term memory limitation of 7 items plus or minus 2 is an excellent guideline. You should choose a total of somewhere between 5 and 9, and preferably 5 metrics for your organization to focus on.

So how do you choose the 5 numbers to manage?...

The bad news is that even by answering these questions, you can still get it wrong - wildly wrong - like the call center in which support representatives are rewarded for increasing the number of calls handled, and thus hang up on their customers as quickly as possible. Here are some characteristics it takes to choose great metrics:

  • Truth telling. There are lies, damn lies and then there are statistics. Do not fall into the trap of choosing numbers that make the situation look better than it is. The more transparent a metric makes your organization, the better it is...
  • Systems thinking. Follow Peter Senge's advice and look for the first, second and third order effects of optimizing your business around a particular metric. In the example above, if call volume is increased at your call center, what will the impact on customer satisfaction be? What will the effect of that change on customer loyalty? What will the impact of customer loyalty be on transaction costs? Etc.
  • Undying curiosity. Understanding why things "are the way they are" is the best way to figure out how to make them better. Sometimes you may want to choose a metric just so that people in the organization will become curious about it. Perhaps the best thing about choosing a particular metric to focus on is that it will inspire passionate debate amongst those who care about making things better.
  • Story telling. Selecting metrics is part of the process of creating a story that explains why the people in your organization should get up and come to work in the morning...
  • Strategic intuition. Often the route to success is not around optimizing an internal operation, but instead requires a complete change in the direction and focus of the organization to access some new dynamic in the external environment...
  • Tolerance for imperfection. Numbers will never tell the whole story; they are merely an approximation of reality. Still, these approximations are incredibly useful in focusing attention, and raising questions that drive organizational learning...

Category: C++ Quant > Fix the Job You Got > Strength vs Weakness > Achilles' heel

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RANT: When companies outgrow their spreadsheets

via CFO - (When are spreadsheets alone not enough?) ...Midsize companies have relied on spreadsheets and manual budgeting and forecasting processes since the earliest days of personal computers, and spreadsheets remain the de facto standard for day-to-day quantitative analysis. Indeed, well-crafted spreadsheets may be all the technology a new company needs to get up and running quickly. They are easy to understand and use; nearly all staff have some proficiency with Microsoft Excel.

However, large enterprises in recent years have migrated from spreadsheet-dependent processes toward more sophisticated automated planning, budgeting, and forecasting tools. These tools promise a greater level of operational detail for analytical purposes, more robust financial reporting, quick consolidations of financial data, and more input by business managers. The tools also liberate finance departments from the mundane manual processes of "racking and stacking" data to focus on a more robust understanding of the real drivers of business.

...A recent survey by CFO Research Services (a sibling of CFO.com) asked finance executives at midsize companies about their efforts to transform their planning, budgeting, and forecasting processes... This study found, across the board, that survey respondents believe they spend too much time on forecasting, budgeting, and planning. When asked about the most acute problems with their current planning process, more than 60 percent said it "takes too long." Nearly 43 percent said "not enough time to analyze data," ... What are the root causes of these problems? Respondents indicated that human factors such as collaboration among planning participants and uneven technical proficiency were primary causes. "Overdependence on key personnel" was cited by nearly 50 percent of respondents, "version control" by more than 35 percent, and "collaboration, consolidation of users' work" by nearly 35 percent of respondents. These issues add time to the planning, budgeting, and forecasting process, thereby reducing the amount of time left to actually analyze data on operational performance.

Interviews with CFOs at midsize companies confirm these survey findings and shed light on the real world problems that companies face when running their enterprises off a mosaic of spreadsheets... "With our spreadsheet model, I was unable to do 'what if' scenarios or work flow management," Green says. "I spent more time building and managing the model, and making sure none of the links were broken, than I did managing the data and analyzing it to ensure it fit the strategic plan. Aligning the spreadsheets was a nightmare. A simple change like someone adding an account threw the whole template [of operating expenses] out of whack. But the real drawback was my inability to do an analysis of data to make better decisions, to re-forecast or otherwise plan accordingly." ... And the company's struggle to build and maintain accurate analytical models distracts finance staff from higher value, analytical activities. "It's a hellish process that gets more complex every year,"... "If we take an annual salary for someone and spread it over 21 business days in a month, a simple change to 22 business days requires us to change a ton of formulas. We've also had to endure errors, where we've added up sales for all the branches, but we're undermined by the one branch that didn't extend the formula to reach enough rows and missed a whole person's salary." McArthur says that each year the model gets more complex, and "we introduce more potential for error. We need improved clerical accuracy on the budgeting side, where the numbers always add up. And on the forecasting side we need better analysis tools for looking at the business."... "We hit the month of May and realized there was no way we would make the forecast and cut our sales plan back almost 10 percent." C.F. Martin's executive team needed to immediately determine the overall financial impact of the reduced sales plan. "I spent a week without sleep trying to forecast the impact," McNair says. "Unfortunately, our spreadsheet-based systems were inadequate to successfully provide this analysis in a timely manner. I couldn't take all 50 budget centers and blow down the sales impact quickly to each individual budget, so I ended up doing this top-down, with a new operating plan focused on executive level budgets. We spent the next six months trying to drive the changes down to the responsibility managers who needed the appropriate metrics for measuring their performance against the revised plan. For the rest of the year, we were not as effective as we could have been." Had he used an analytical application for the re-forecasting, McNair says, "none of this would have happened & I would've hit a couple buttons and budget managers would have instantly realized the impact of the re-forecast on budgets, allowing them to make decisions accordingly."

Interview subjects say poor data integrity and accuracy affect their satisfaction with planning, budgeting, and forecasting...

Category: C++ Quant > Fix the Job You Got > Opportunity vs Trap > Success Breeds Failure

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MISC: Meeting with my auto-insurance agent

I confessed that I'd been comparing rates on the Internet and had gotten a quote that was 30 percent less than his.

"Tell me, Chris," he responded, "when you have an emergency, who do you want to deal with, a man or a mouse?" - via RD

Category: C++ Quant > Random Walk > Jokes

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MISC: Give your Fear a Purpose

Fear is not something we can conveniently bury or wash away, Change Consultant Kashmir Birk blogged. It is inside us and all around and it will always be. Even a Zen monk strikes fear into the heart of his student, puts them through physical hardship and punishment to literally break them - out of their old habits of thinking.

Fear is energy without a purpose. Without fear we are an empty vessel, too much and it just burns us out. We have been told from birth to "not be afraid" or to just "be brave" we are taught to deny and suppress our fears. Denial and suppression never work. The coward and the hero both feel the fear, the only difference is one is succumbs to it, the other uses it to take action.

Fear can consume us with the ferocity of a forest fire. We can stand by as it tears mercilessly through our hearts, our homes, our communities until all hope is extinguished and our sad little lives are laid out bare...

Fear is not a thing, it is a many headed monster, it takes on so many shapes and forms. What is fear and where does it come from? What is the root cause of fear?

What if - all I had to do is stop blaming?...

It comes in different guises and names - prayer, meditation, reflection, confession, dance or detachment, it all amounts to the same thing. Every spiritual master who has graced this good earth has given us the same basic advice.

All we need to do is forgive. To forgive is not forgetting, forgiveness is getting past the hurt. If we forget we will repeat the same mistakes over. We cannot allow our frailty to hurt others or be hurt by the frailty of others. To yield to others or being merciful to ourselves does not mean giving in or rolling over. It means dealing with truth without fear. Being brutally honest.

Fear of fear is the fuel that feeds upon itself. The solution is not to ignore, bury or project our fears onto others, or soak in the fears others carry, but acknowledge fear. Fear is not our ally not our enemy. It is an early warning signal, a safety valve or trigger to focus our mind and body for action.

We need to own fear without being being possessed by it. Some people own cars, others are owned by their car. That is the basic difference here. I need to acknowledge the presence of fear in my life, but I don't need to define myself based on my fears.

Both Frank Sinatra and Sir Laurence Olivier, true masters of their craft, talked openly about their stage fright, during the peaks of their respective careers. Both of them relate the same story at different times. The day they lost their fear of going on stage, they realized it was time to retire. That is because this was the first indication that they didn't care enough about what they were doing.

We need to replace the slogan "no fear" with "know fear". Let go of our impulse to control our fears. Tap into our intuition and have faith in the sanctity of our own heart.

Category: C++ Quant > Random Walk > Strength vs Weakness > When Life Gives you Lemons

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TIP: Focus Like a Laser for explosive success

via FunCareers -- A common mistake for almost all new work at home / home business beginners is the trap of trying to be all things to all people. They will take any job, even if it not what they set out to do, simply because the job pays money

It's tough to focus, we know!...

In the modern world, specialization is the key to success. If you were choosing a brain surgeon to operate on you I am sure you'd prefer one that only does brain surgery and nothing else! The same applies to your business.

If you do just one thing... You may be surprised to learn that making your focus more narrow actually gets you more customers. By offering one targeted product or service you can charge higher fees and you attract the customers that are willing to pay for your expertise. This applies to the online world as well as the real world. I'm sure you've seen hundreds of those "mini-sites", just one long sales page and nothing else. That's an extreme example of focus - not even a site, just one page, one product, it sells or it doesn't.

You can learn a thing or two from those pages for your real world business and create a laser like focus on the one thing you excel at, only targetting the customers that crave your product or service so you can increase your home business income...

Category: C++ Quant > Fix the Job You Got > Opportunity vs Trap > When Less is More

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MISC: Sometimes you just can't win

Let's play a game of love. If I win, you're mine. Otherwise, I'm yours.

Category: C++ Quant > Random Walk

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TIP: "Where do you see yourself in five years?"

via Monster - "To be a marketing manager within five year, and have a hand-picked team reporting to me," replies Phil. This is a very specific and narrow goal, which may not be an option at this company...

"I have been so busy with my responsibilities and achieving company goals that I have not focused on personal long-term goals," answers Shawna. While a strong work ethic is certainly desirable, this answer does not demonstrate vision or planning.

Begin by setting short-term goals. Right now your goal may be to get a job. But what kind of job? And where do you go from there?

Be employer-centered. The employer is looking for someone to come in and solve problems. Since planning is a key factor in this job, think of examples where your planning has affected the results...

(as an example) "I have learned that long-term goals are best achieved when I break them into shorter goals. My short-term goal is to find a position that will put me in a forward-moving company with solid performance and future projections. As part of a team, I want to add value and continue to grow the company. My long-term goal will depend on where the company goes. My plan is to move into a position of responsibility where I can lead a team."...

Category: C++ Quant > Fix the Job You Got

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MISC: Your two cents do matter

via AllBusiness - at least at eBay... Many eBay members tend to round off their bids to the nearest dollar figure. Some choose nice, familiar coin increments like 25, 50, or 75 cents. But the most successful bidders at eBay have found that adding two or three cents to a routine bid can mean the difference between winning and losing. Get in the habit of making your bids in oddish figures, like $15.02 or $45.57, as an inexpensive way to edge out your competition. For the first time ever, your two cents may actually pay off!...

You're not a loser if you lost at eBay. You just don't know the fine art of sneaky bidding, otherwise known as educated bidding. Sports teams study their rivals, and political candidates scout out what the opposition is doing. Bidding in competition against other bidders is just as serious an enterprise. What you need is a strong bidding strategy to help you outsmart the competition and win more auctions...

Category: C++ Quant > Random Walk > Something vs Nothing

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