Author: alearningaday

The 2014 ALearningaDay year end reflection doc

My request to you for today is to take 20 minutes (or as long as you want but let’s do at least 20 minutes) to reflect on the year that has gone by and to think about the year ahead.

You can use any tool you like to do this. I’d just recommend the following –
1. Let it be a list of questions (10-15 ideally) that you ask yourself. That will help guide your reflection a bit as the idea of sitting down and reflecting on a whole year can feel daunting
2. Write your first reflections on paper. Once you are satisfied with what you’ve put down, transfer it to a place on your computer as papers get lost easily.
3. Try to make it a yearly tradition. It is really great to see a collection of the reflections of your last few years a few years down the line.

And, if it makes it easier, please feel free to use the ALearningaDay reflection doc for the year. It is intentionally a PDF so you print it out and write on it first. If you don’t have a printer around you, just send me an email and I’ll send you the word version.

I hope it helps. Happy reflecting!

ALearningaDay Reflection doc

“You snotty-faced heap of parrot droppings”

In his latest book, “What To Do When It’s Your Turn” (And It’s Always Your Turn) by Seth Godin, he shares a great example from a Monty Python sketch called “Argument Clinic.”

Paraphrasing, this involves Michael Palin going in to pay cash to have an argument. He is sent to a room where is repeatedly abused. He’s totally taken aback and soon realizes he’s in the wrong room. He then goes into an argument room where he has a pointless argument. Five minutes later, he’s told to get out because the five minute he’s paid for is up.

Seth’s questions to us are – Why are we living this sketch daily? Why do we go to actual rooms where actual people make us feel badly? He points out that, with the same amount of time, we can always go to an “egg me on” room or a room filled with enthusiasm.

It is a powerful point. It is easy to be a victim of habit or programming and repeatedly visit rooms that don’t do us any good. And, this holiday season, perhaps it is worth doing an audit of the rooms we spent most of our time in. Maybe there are a few that need to be taken out and perhaps a few that really ought to be there. We can choose our company. In choosing our company, we inadvertently choose our wellness and happiness.

PS: I hope you take the time to read the book. This is a totally biased recommendation because I love Seth’s work. This book is like a collection of his blog posts with some really nice additional illustrations. I think of it as a book you keep at home to flip every once in a while. It reminded me of “The War of Art” by Steven Pressfield as the themes that Seth discusses are those around fear, inspiration, and taking the leap. It won’t work for many sorts of readers – especially those looking for 5 tips to create your next ventures. But, it’ll work for some (especially those who love his blog) and I guess that’s how Seth intends it. :-)

Also, as an additional note, when you get the book, do check out page 97. Seth has generously featured a blog post from here.

The headband experiment

If you’re not feeling particularly good today, I’d suggest the following – tie a headband around your eye and walk around for 10 minutes. And, if that still doesn’t change your perspective, try doing a few household chores with just one hand for 10 minutes.

I find that i always end up feeling really thankful for my health when I fall ill. So, as I thought about the things I take for granted, I realized that I am very thankful that I have a healthy, functioning body with a working set of eyes, hands, feet, ears, mouth, and brain.

And, if it is the same with you –
1. If you aren’t feeling blessed, you should.
2. If you aren’t doing something about this blessing, well, what are you waiting for?

Merry Christmas!

90% of all analysis is prep time – MBA Learnings

We spent a lot of time in our statistics class on regressions. A regression is simply the measure of the relation between the mean value of the output or ‘y’ variable and the value of input variables. It is the ability to predict a value for ‘y’ given the values of certain ‘x’.

For any regression, we go through the following steps –

1. Think of a model of y. Let’s say we are attempting to predict the health of a person. We need to first think of all the factors that result in good health.

So, f(good health) = f(good diet) + f(exercise) + f(sleep) + f(collection of other minor variables or noise)

It is important to get the important factors in this model so as to guard against omitted variable bias or OVB.

2. Sort out causality. We then think about whether the relationship is cause-and-effect. This deserves a blog post in itself as this “identification” error is rampant across many studies. Here, we could argue that, largely, good health is caused by behavior. That said, we are probably missing genetic predisposition to good health. That is an example of a variable that should go into the equation because it is a sure shot source of OVB

3. Clean your data. Now it is time to examine the data we have. Look at trends and outliers.

4. Match the data to the theory to see if you have the right variables. This is when we check if we have data for diet, exercise, sleep and genetics as we’re trying to predict the average health of a patient. We also need to check if we have a good proxy of average health – e.g. number of doctor visits per year.

5. Check for “action” in the key variables. Next, we need to make sure that variables like diet, exercise, etc., have enough variation. Without variation, it is impossible to link movement in the variables with movement in the output.

6. Briefly examine a simple model. Run a first regression with a simple model and check for relationships and significance (or level of confidence in our relationships)

7. Settle on an empirical method. Are we assuming a linear relationship? Is there any chance an improvement in health or exercise or sleep could result in a percentage change in health?

8. Check for multicollinearity and heteroskedasticity. These are big words. Multicollinearity is simply checking for whether x variables in the model are correlated. For example, are good diet and exercise correlated? If everyone who has a good diet also exercises a certain amount, perhaps we could just include one of the two. The key here is to understand multicollinearity doesn’t change the outcome. It just messes with the standard errors of prediction. So, definitely important to check but no need to panic.

Heteroskedasticity, on the other hand, is a check for whether we have the right empirical model. I won’t go into depth here but this is a quick check to see if there is a pattern in the residuals or unexplained factors in the regression.

9. Check for robustness. The robustness check is an interesting check – it involves removing variables or groups of variables to see if they make a difference to the output. For example, one check would be to remove sleep from the regression and see if it makes a difference. If it doesn’t, we can safely take it out. The idea here is to use as few variables as necessary to check for whether there is a relationship between the variables and the output.

10. Run the final regression and interpret your results.

(Note: We have intentionally not discussed the R-squared of the regression. The R-squared isn’t a good predictor of regression accuracy especially in models where future trends aren’t likely to mirror historical trends. Low R-squared models in very hard-to-predict situations can still tell us a lot.)

Sorry for the long drawn statistics lesson. Now for what I find most interesting – step 10 or running that final regression is a 10 second task followed by a few minutes interpreting the result. So, 90% or more of the time we’ve spent on the analysis has been preparing the data for regression.

I find that analogous to all of life’s great processes – 90% of most great processes is indeed prep time.

Ensue vs. pursue

The less help you ask for and need, the more help you get.

The less money you need, the more bank loans and credit cards are offered to you

The less friends you need, the more friends you make.

The less you care about failure, the more you succeed.

The principle here is that most good things in life can’t be pursued. They ensue. Sure, you can pursue a title or an achievement. But, when you look at things that make you happy – peaceful sleep, engaging work, good relationships – they often ensue.

Of course, that’s easier said than done. And, of course, all of this means making choices that require us to need less, spend less, love unconditionally more, work much harder and with purpose, and to embrace failure and the stupidity that we feel when we learn something new.

That can either be liberating or depressing.

As always, your choice.

—

Hat tip to the great Viktor Frankl for the spotting the ensue vs. pursue principle half a century ago.

Talent -> Skill -> Work ethic

Watch a bunch of 5 year olds playing a new sport and you’ll quickly be able to spot the ones with natural talent.

8 years later, however, it’ll get harder to tell which ones were the talented ones from the group you first saw. This is also because 9 out of every 10 who started out at 5 are probably not even playing in this group. The differences observed at this stage become less about talent and a lot more about skill.

A further 8 years later, you’ll be hard pressed to remember if the survivors (again 1 out of 10 you saw 8 years back) were among the original talented 5 year olds. In this group, everyone has above-the-threshold talent and skill. It is work ethic that sets them apart.

Talent is what we are born with. It has a lot to do with our mental and physical make up. Some bodies, for example, are just a lot more suited to long distance running. Skill is when we wrap process around that talent. We use that mental and physical make-up and coax it to do a series of counter intuitive things that enable the individual to perform that skill at a certain level of consistency. For a soccer player, it is often learning collect the ball and make a difficult pass/take a shot in one fluid movement. Talent helps speed up the skill acquisition process. And, the speed of the skill acquisition process determines if you have what it takes to become a professional in what you do. However, skill alone doesn’t do much in a professional’s life. Sure, prodigious skill could result in a brief spell at the top. But, again, it is work ethic that makes a top top professional.

You’ve seen this in every field. Michael Phelps is a great example of natural talent (he was born with an abnormal wing span) who was able to learn the basics of swimming very quickly. But, it is when his coach coaxed in an unmatched work ethic that the became a machine that won a record number of Olympic medals. Whether it is Roger Federer, Kobe Bryant, Jerry Rice, Rafael Nadal, Cristiano Ronaldo, Sachin Tendulkar, Michael Schumacher or Tiger Woods, you’ll be hard pressed to find a superstar who doesn’t have an awe-inspiring work ethic.

And, while we are at it, I’d like to call attention to two important points. First, talent isn’t completely overrated. It helps greatly in the first stage. But, the irony is that we often see above-average talent triumph prodigious talent because they have to work a lot harder on the process. I once met a ticket collector on the DLR in London who used to be a teenage player at Chelsea football club. He said John Terry (Chelsea’s captain and legend) was among the least talented and skillful players as a teenager. All the others, however, just lacked the discipline and work ethic he had.

Second, notice how being professional involves mastering yourself and things you control. Talent isn’t in your circle of influence. Skill sort of is. But, work ethic? It is completely what you make of it.

Hail the fail whale – The 200 words project

Here’s this week’s 200 word idea from Things a Little Bird Told Me by Biz Stone.

Since Twitter was born out of a two week hackathon, the architecture of the site wasn’t built to handle its exploding growth and the service regularly went down.

Biz Stone, the voice of Twitter to its users, believed in being absolutely honest about the issues and the work being carried out by the Twitter team. While companies worked hard to convey a “perfect” image, his belief was that vulnerability is always rewarded with goodwill. So, the Twitter team created the now-famous “fail whale” – a humorous communication of the service’s outage.

He realized his approach was working just a few months in. When the Twitter team was working late at night before the Apple developer’s conference where an iPhone was rumored to be released, pizzas arrived at the office followed by a tweet from a few users asking if they’d received it. Their users didn’t think of Twitter as automated bots who caused them pain. Instead, they saw them as people working hard to make the service work. The fail whale went on to inspire many fan clubs and even a conference(!).

Here’s to vulnerability over attempts to look perfect.

Fail whaleSource and thanks to: www.EBSketchin.com

‘Perhaps the history of the errors of mankind, all things considered, is more valuable and interesting than that of their discoveries.’ | Biz Stone

Ray Dalio’s Principles

Ray Dalio is the founder of Bridgewater Associates, the world’s largest hedge fund. Bridgewater Associates grew to its current size thanks to its far-above-normal rate of returns. We did a case on Bridgewater Associates at school as an extreme example of employee culture. I use the word “extreme” because Ray Dalio has built a firm on a cultural “hyper-transparency.” At Bridgewater, employees seek out conflicts in pursuit of the “truth.” Given the rather cult-ish nature of the firm, it attracts a certain kind of person.

I was intrigued by Ray Dalio as some of his interviews revealed a disciplined and obsessive (is there any other kind of billionaire?) person who had an interesting take on markets and life that has evolved over time. For example, he has taken note of every investment decision he’s taken since the 1960s with the rationale behind them. And, over time, he’s studied the data to understand how the economic machine really works.

His approach to both the markets and life seemed very aligned around a principle-based approach he shared via a 109 page document with called ‘Principles‘ that is shared on Bridgewater’s website. So, I took some time over the past week to read the document. I was more interested in the part around fundamental principles as the management principles were derivative of that. These are a collection of quotes (similar ones grouped together) that resonated/made me think –

“Principles are concepts that can be applied over and over again in similar circumstances as distinct from narrow answers to specific questions. Principles connect your values to your actions.”

“Truth, more precisely, an accurate understanding of reality, is the essential foundation of producing good outcomes. Dreamers who achieve great things are not divorced from reality. Instead, they understand nature’s principles and make their invention to harness them. E.g. Flying.”

“The desire to evolve is probably humanity’s most pervasive driving force. And pursuing self interest in harmony with the laws of the universe and contributing to evolution is universally rewarded. Self-interest motivates people to do the difficult things that benefit them and that contribute to society. That, in turn, means they get rewarded financially.”

“Adaptation is simply adjusting appropriately to changes in one’s circumstance.”

“The quality of our lives depend on the quality of the decisions we make. Good decision makers learn to think about the second and subsequent-order consequences of their decision.”

“Happiness is often determined by how things turn out relative to expectations. You can choose to either have high expectations and strive to exceed them or lower expectations. Most choose first oath and hence have to keep evolve to be happy.” (My critique here is that Ray is talking about the feeling of happiness in the first bit. The state of happiness isn’t linked with outcomes. It is a way of being – in my opinion.)

“Pain + reflection = progress”

Ray Dalio’s approach to life and the markets has been to understand the principles that drive them. For example, he shares his mental model of the financial markets on a website called EconomicPrinciples.org. While I’m not sure I would have come to the same conclusions outlined in his approach to management, the document demonstrates incredible clarity of thought and alignment of values, principles and actions.

There is one footnote in the document where Ray asks every person to develop a “Principles” document. He also wishes he could read the principles of folks like Albert Einstein.

I wish that, too. Thanks for sharing this, Ray.

A beautiful mind parallel

I wrote about dealing with insecurities by making a case for selfishness a week ago. There are were a couple of sentences in that post that I thought I’d revisit.

“I am of the view that you don’t ever get rid of your demons. But, you do learn to keep them at bay. So, I don’t think you ever truly get rid of insecurities. You just learn to accept their presence, work with them, and consistently let your best self shine through.”

This was the single hardest concept that I have grappled with over the years. I initially operated with the assumption that you build self-confidence brick by brick and reach a point when you don’t ever see your insecurities again. It turns out that that is not true.

A parallel that came to mind was John Nash’s experience as depicted in the Oscar winning movie ‘A Beautiful Mind.’ In the end, Nash is shown to come to terms with his schizophrenia, but the characters from his delusions don’t go away. They’re still there. He’s just learnt to ignore them and carry on with his own life.

That’s a great way to think about insecurities. The best outcome of dealing with them and building our self-confidence isn’t that they disappear. We just learn to develop the self-awareness necessary to overcome them. Courage isn’t the absence of fear and insecurities, it is the realization that there are things more important than fear.

And, from personal experience, it is definitely the happier path…

Maximizing learn-rate – Being kind to yourself

If your response when you taste failure is to beat yourself up, it is natural that you will eventually fear failing.

But, isn’t that what we all do?

Maximizing learn-rate is on top of my mind as I had 2 days of ski lessons this week. After an encouraging first day, I had a challenging second day. And, as we progressed to a slightly tougher slope, I found it much harder to execute what I thought I’d learnt. For a good few minutes, I began wondering why I wasn’t getting it and, soon, I felt paralyzed. Negative self talk is the first step of a cycle that takes us nowhere.

The next step was to reverse the self talk and just try again.

It went better. I need more of that as I practice today.

My understanding of the situation is that my skill level is just what it is. Self talk isn’t going to improve it. But, as I start learning a new skill, there are many insecurities that get in the way of performing at the skill level I am at. It takes a while to build the confidence required to shove the insecurities aside. And, negative self talk is as potent a confidence destroyer as they come.

This post in one line? To learn better, be kind to yourself.