Make the right call
Chennai: Good leaders not only make better calls, but they are able to discern the really important ones and get a higher percentage of them right, say Noel M. Tichy and Warren G. Bennis in ‘Judgment’ (www.landmarkonthenet.com).
“The thing that really matters is not how many calls a leader gets right, or even what percentage of calls a leader gets right. Rather, it is how many of the important ones he or she gets right,” they observe.
What makes leaders effective is that they are “better at a whole process that runs from seeing the need for a call, to framing issues, to figuring out what is critical, to mobilising and energising the troops.”
A chapter on ‘framework for leadership judgment’ begins with a German expression ‘fingerspitzengefühl,’ often translated as ‘sure instinct’. More literally, it’s about feeling through the tips of one’s fingers, explain the authors. “Experience is very important in developing judgment… It’s about the je ne sais quoi of just sensing, having good antennae. There are things you know in your gut.”
However, good judgment is not one terrific ‘aha’ moment after another, clarify Tichy and Bennis. It is an incremental process, after much trying and ‘trialing,’ of mistakes and missteps, of correcting, refining, and yes, trying again, they elaborate.
Judgment, the essence of effective leadership, is a contextually-informed decision-making process encompassing three domains, viz. people, strategy and crisis, the authors outline, with the help of a matrix.
“Within each domain, leadership judgments follow a three-phase process: preparation, the call, and execution. Good leadership judgment is supported by contextual knowledge of one’s self, social network, organisation, and stakeholders.”
A book that can add value to the judgment calls you make, in business or on the bourses.
How to handle profits properly is a separation point between winners and losers, writes Michael W. Covel in ‘The Complete TurtleTrader’ (www.harpercollins.com). “Great traders adjust their trading to the money they have at any one time.”
For example, if you had started with $100,000 account, and made quickly another $100,000, you now have $200,000, explains Covel. “Although you made a profit, you can’t say, ‘I can now take crazier risks with that $100,000.’” For, TurtleTrader philosophy is to treat the additional $100,000 like the original $100,000, with the same care and discipline.
The book begins by narrating the tale of how Jerry Parker made to the list of Wall Street’s top players as a result of ‘trend-tracking’ training he had received from Richard Dennis as a ‘Turtle’.
“Dennis figured out how to profit in the real world from an understanding of behavioural finance decades before Nobel prizes were handed out to professors preaching theory,” the author recounts. “His competitors could never get a handle on his consistent ability to exploit irrational market behaviour throughout all types of markets. His understanding of probabilities and payoffs was freakish.”
Covel traces the origin of ‘Turtle’ thus: “Dennis had been on a trip to Singapore and visited a turtle-breeding farm. A huge vat of squirming turtles inspired him to say, ‘We are going to grow traders just like they grow turtles.’”
Exciting and educative.
One of the big errors people are making right now, says Carlos Slim Helu, is thinking that old-style businesses will be obsolete. “Some retail groups are introducing e-commerce and think that the ‘bricks’ are no longer useful. But they will continue to be important,” advises the Mexican billionaire.
“Only those who are asleep make no mistakes,” admonishes Ingvar Kamprad, founder of the furniture brand IKEA. “You can do so much in 10 minutes’ time,” he assures. “Ten minutes, once gone, are gone for good. Divide your life into 10-minute units and sacrifice as few of them as possible in meaningless activity.”
To Lakshmi Mittal, the steel baron, being an Indian is a real advantage. “You learn a lot about bridging differences and reaching compromises when you grow up in a country with over 300 languages and ethnic groups.”
For these and more, catch up with ‘The Billion Dollar Book’ edited by Yogesh Cholera (Wonderland Publications, Gujarat).