Monday, October 12, 2009

Drips of recreation

We all know that recreation is important for a good life. What counts as recreation varies from one person to another. The other day I discovered the effect of doing "something else". Usually, I am not the one shopping for groceries at our house - I tend to work (sometimes even intensely) until I leave office for the commute back home. The other day I stopped at the grocery store (one of the up-market kinds) to get something nice for dinner. I got some nice fresh food - and a gourmet coffee for the car ride - took about 30 minutes extra out of my schedule. This little break from the daily routine really gave me a lift. So - I am definitely going to look for more routine-breakers - they can really save the day!

Wednesday, July 15, 2009

Charging.... please wait

Batteries need to be charged now and then to provide energy to our gadgets. Now its vacation time and batteries are working overtime while we are recharging our internal batteries. I've been off to a couple of weeks of vacation time now, and it has been deliberating. Although I feel that I have a good grasp of managing my own work day, some time without thinking about work at all is really good. Lazy days with books, coffee, family and friends has really brought me into a state of mind that the professional world is very efficient at taking away from people. I think it is called harmony.

So... since this is a very nice feeling, I started thinking. How to bring more harmony into the workplace when the vacation is over - to elongate the effect of the holidays? I came up with three bullet points that I will test when I have spent a few more weeks doing absolutely nothing but reading, swimming and relaxing;

  1. add some physical activity during the work day (my job is very far from manual labor...), like a walk during lunch time (I know this is a classic, I've just never made myself do it).
  2. plan for procrastination... or plan for meaningful breaks duirng the day. Like reading a poem. If you plan for it, it won't make you stressed out.
  3. cut through during stalled meetings such that you don't have to spend your time there.

When I am back to work I will start to practice this and try to devise a way to judge the effect of it on my own well-being as well as my work day productivity.

Enjoy the holidays!

Tuesday, June 30, 2009

Fundamentalist perspectives

In this blog we have discussed the use of key performance indicators a lot. These are numbers that can be used to monitor progress towards predetermined goals - and they can be very useful if selected wisely. They do, however, give a shallow view of the situation, but have the advantage of giving a quick overview of the state of affairs. Sometimes, however, a deeper look at things is certainly justified.

It is from this point of view I am thinking of fundamentalist perspectives; these are terms used to describe stock brokers. A fundamentalist among stock brokers is not likely to support a large black beard and be carrying sables around. He us much more likely to be wearing something from Gucci and talk about taking the fundamentals into account when valuing stocks. With fundamentals we understand such things as financial standing of the company to be traded, general market conditions, the weather, season, the company's manager's ability to implement change and so on... On the other hand, there are other stock brokers, the socalled technical analysts. They try to value stocks and predict the future by looking at how the stock value and some other KPI's have moved in the past. Both of these groups tend to think that the market is not efficient on the short term. The fundamentalist typically thinks the market is efficient in the long run, whereas the technical analyst will tend to explain the market from past trends and mention behavorial finance and the like. We'll save more on this for later.

I think that both these types are fundamentally wrong - but both types of analysis can be useful. In our assessment of general progress we should sometimes move from the technical analysis kind of thinking to thinking in terms of fundamentals - how have my actions effected the important things for me? Am I feeling more happy now, or are the KPI's fooling me to believe I am making progress when I am not? If the KPI's are astray when you start considering fundamentals - you need to select new KPI's that are better aligned with your true goals. One should perform a fundamental walk-through now and then on all projects one is working on, to make sure everything is allright. And, of course, by thinking in qualitative, conceptual terms, bright ideas may even be born!

Wednesday, June 24, 2009

Avoid the glass roof

Have you ever heard of the glass roof? A lot of mid-level managers with ambitions know what it is, a lot of hard-working engineers know what it is - and it seems inpenetrable. It is the invisible obstacle that stops you from climbing the career ladder within your organization.

Do you have ambitions to climb to the top, or at least to higher altitudes? Most organizations are somewhat hierarchical; only so many positions are available at the top and the number of broilers trying to climb is large... How can you avoid bumping your head against the glass ceiling?

As always - it boils down to strategic thinking. First of all, you need a career vision, a goal. You need to know where you want to end up, why you really want that, and what you are willing to pay to get there (in whatever currency is relevant; time, money, work, lost friends, whatever..). Then, when you know, identify all necessary career steps to get there and make a realistic plan to get there. Identify locations of possible obstacles. Typically, getting from mid-level management to top-level is hard and time consuming. When your plan is clear cut, start implementing it and monitoring progress. With fixed time intervals, ask yourself survey questions such as:

  • Am I at the level I planned to be at the current time?
  • How did I get here: according to plan, or did something else happen?
  • Are the obstacles still the same?
  • How can I go around or avoid obstacles?
And also, finally, the most difficult question:

  • Is my goal at all reachable at an acceptable cost from my current standing?
If the answer to this question is "No" - you need to rethink your strategy. You can stay where you are and be happy with it, or change the situation such that you have a feasible goal. One possible answer would be to switch to another company - or start your own.

If keeping focus is hard - you may resort to tracking numbers. Create your own performance indicators and savor those informal reviews from your subordinates as well as your managers. Always be self-promoting, but also easy going. Get the point? Good luck!

Sunday, June 14, 2009

Unplugging for productivity

Stepcase lifehack has a nice story on how to avoid the continuous electronic distractions: unplug your online life. The idea is generally to step away from the computer and stick to pen-and-paper tools. I don't go to those extremes, but here are some favorites of mine for increasing productivity when working morale is low:
  • close your e-mail program
  • close the office door
  • close all applications you are not using on your computer
  • do one thing offline: keep an offline to-do list and check each task when its done
  • drink high-quality coffee while working
  • do not use the computer mouse - the keyboard keeps your attention at work
Try it out the next time you are noticing that your are sliding away from where focus should be; it helps for me at least!

Wednesday, June 10, 2009

Professional sports are all about bus...

Professional sports are all about business. Transfer sums in European soccer have grown exponentially over the last couple of decades and Real Madrid is about to set an all-time high with its 75 million £ offer on Ronaldo, reported by several newspapers yesterday night ( 75 million pounds is a lot of money, it translates to about 123 million U.S. dollars. According to the Guardian, Manchester United, which is Mr. Ronaldo's employer today, is categorically refusing to sell Ronaldo, treating him like an invaluable asset. Florentino Pérez, the president of Real Madrid, seems to be on a buying rampage to ensure Real gets the best players around. They just signed with Kaka from AC Milan, another substantial contract costing Real 65 million £. The Guardian also inquired by Mr. Pérez about rumors that Real are interested in Liverpool's Xabi Alonso. Mr. Pérez answered that they are not looking in this direction, in spite of Alonso's very good qualities, because Liverpool has not signalled him for sale. 

Now, Mr. Pérez, I find that mighty strange. Liverpool has not signalled that Alonso is for sale, but have they signalled he is not for sale? Not to the best of my knowledge. What about Cristiano Ronaldo? Manchester United has not signalled that he is for sale, but they have for sure made clear that Ronaldo belongs at Old Trafford for a long, long time. Yet, Pérez says the most important thing is to stay friendly to the other European clubs. What is the strategy here? Making these statements, that it is important to stay on friendly terms with one's competitors, as well as saying that Alonso is not in the sight for a contract in Spain, makes Mr. Pérez seem like a mild man at the position of a lion; the president of one of Europe's larges soccer clubs. This mild man picture does, however, not go too well with the liking of a hostile take-over of Cristiano Ronaldo. The interesting thing with this offer is to see what Manchester United does about it; can the club afford to say no to more than a 100 million dollars? Is one man really worth such sums? Real Madrid seems to think so. Now it only remains to see what the executives in Manchester do. If the transfer sorts itself out for Mr. Pérez, for Ronaldo (who has previously said he'd like to move to southern Europe) and for Sir Alex Ferguson, it remains to see how the soccer landscape of Europe could change. Is the transfer going to affect the power positions in Europe? A lot of money will be shifting hands; think of all the recruitment programmes you could set up and run with a 100 million dollars! Is Ronaldo really that much worth? With a typical business CEO in charge at Old Trafford, Cristiano Ronaldo would be history in Premier League. What really happens remains to be seen though, because when it comes to decision making, footballers and old-fashioned corporate executives do not think alike.

Tuesday, June 9, 2009

Why Business Intelligence Software Is...

Most of the large software providers have some business intelligence related offerings. Microsoft offers the Microsoft Dynamics package. IBM is the largest provider of such software. And there are many other smaller options. These software packages share several features:

  • they are providing graphics for managers with overviews of key performance indicators
  • they aid in selecting KPI's
  • they include options for database queries

What they don't do is more important when we are considering how such applications could be improved. They don't tell you whether your key performance indicators are well-aligned with the overall strategy of your organization. They don't tell you which data are most relevant in order to make good decisions. Software can be made in more intelligent ways to support such tasks. 

Let us first take the issue of alignment with strategy. Most of these systems include the concept of balanced scorecards in some form or the other. The concept of a balanced scorecard is well-known among managers because this is now standard material at any business school. The balanced scorecard is supposed to be a snapshot of an organizations current "operating state" and was developed at Harvard in the 1990's by Prof. Kaplan and co-workers (Kaplan, 2001) . The idea is as follows. Any company must be very clear on what its purpose is in order to succeed in a harsh and competitive environment - in other words, you need to know what you want and what you are doing to survive in a free market. When this "company mission statement" is clear and agreed upon, a strategy must be laid out on how the company is practically going to achieve these goals. A very common approach in determining the strategy is to select some business areas to focus on - and then to formulate performance measures within each category. This makes the strategy more manageable and is also the foundation of a scorecard. A typical scorecard looks at the company from a few different angles: 

  • the shareholder view,
  • internal business processes,
  • customer view,
  • innovation and learning view.

These are four categories suggested by Kaplan and co-workers - and they seem to fit many organizations quite well, at least those which strive to make a profit for the owners, a.k.a. reguler firms. Within each of these categories, a set of performance measures is selected. These key performance indicators need to provide good information on how the organization is doing in that field and should be closely watched. The problem is just that selecting them can be quite difficult; there are no generally accepted methods to do that and the selection is often done based on intuition and experience. Much better results could have been obtained with mathematical models and optimization methods - formal decision processes that can be implemented in software and that can be updated when there are large changes in the organizations operating environment. 

In order to formalize KPI selection, a mathematical model of the company is needed. Such models can be built based on transaction data, HR data, customer interviews and so on - activities that generate a large business database. Textual information must be translated into numerical forms by appropriate coding setups; methods well-known in statistics. From this large set of data, it is possible to do principal component analysis and end up with a relatively low-dimensional linear model of the data: a model predicting how outcomes change when you change of the aims are applied in your business system. This model, together with a clear definition of the vision, or strategy, in mathematical terms can be used to automatically compute a set of functions of business outcomes that are measured on a regular basis, that are such, that when they are kept close to some pre-determined values the company will perform well and according to strategy. Such an approach would create KPI's that are as closley aligned with the strategy as possible with the available business information: a huge improvement over the common situation today where the strategic alignment of the preferred KPI sets are questionable at best. 

If such a formal procedure is going to be implemented together with a balanced scorecard system, a performance measure must be established for each of the four categories above (or, generally, the categories in use in the managment system). This could yield a better scorecard implementation. 

The day will surely come when model based KPI designs arrive - a situation longed for by auditing firms - imagine the profits that are possible if you can produce a continuous auditing system: a highly specialized and craved-for software which reduced the need for expensive-to-hire specialist accountants. Continuous auditing is definitely coming, and principal component analysis, database analysis and optimization theory will surely play a big part in this very exciting future of business intelligence systems. Maybe these systems will actually be intelligent, some day. What is needed to reach this situation? Research in applied mathematics, database conversions and a lot of software development. 

Therefore, if you are considering buying a business intelligence system, make sure you are not ending in a vendor lock-in situation with one of the big software houses; the future may come from an entirely unheard-of company: small startups are often the more innovative ones.

Kaplan, R. S. "Transforming the Balanced Scorecard from Performance Measurement to Strategic Management: Part I." Accounting Horizons 15.1 (2001): 87.

  • Business intelligence systems are not intelligent
  • KPI selection can be automated and aligned with company strategy
  • Continuous auditing is possible in the very near future

Sunday, June 7, 2009

Minimize work wear - choose the right word processing solution

This post is mostly aimed at technical and academic writers. If you are in the right academic environment, you know the eternal discussion on what's best; Linux or Windows, LaTeX or Word... I work in such a place - and sometimes these quarrels are a bore... really.

Let's take the stand of the *nix crowd to start with. What do they have to say about Word? Well, the first thing they say is that it is bloated, thereby meaning slow, too feature packed and so on. May very well be. There are many features in Word that you don't need; granted. Furthermore, they dislike the "point and click style" of Word. Next, it is bad that it is proprietary. And worst of all, the support for equations and references is meager.

Now, we take the stand of the Windows/Word crowd and listen to what they say... LaTeX feels so old-fashioned. It is only for techies. I don't want to write code to write down what I am thinking. The syntax can be bewildering. I
t is hard to install. I cannot send my documents to others, who are most likely using Word anyway. Word is easier.

Now, I am a *nix user and a Windows user. Both the stands described above are wrong. LaTeX has a pretty steep learning curve, but it is not difficult to use or set up. If you don't like writing code or markup, that is a personal thing that is only up to you. On the other side, you can use Word effectively without any clicking at all - there are shortcuts for everything. Macros let you make shortcuts to very complicated things. And support for equations and references is great if you are willing to use third-party software (MathType and EndNote being the most common). If you are on your own budget, the price might be stiff, though.... ($300 for EndNote alone...).

So... why don't we just let people use the tools they like and put the discussion to an end? That would be a relief... :-)

That being said - after trying a gadzillion solutions - I think Word is the most efficient way to write for me, because I use a lot of the features making up the "bloat" of the software :-)

Friday, June 5, 2009

Efficient learning using online tools

We all strive to be efficient learners - and we realize the web is a great source of information. The problem is utilizing the web in an efficient manner for learning. The biggest threat to our learning success is distraction. When using the web, especially those of us who use the so-called social web features extensively (IM'ing, Facebook, Mixx, etc.) have a plethoria of things that may take our concentration away. These tools can, however, also be turned into valuable assets for your learning progress.

IM'ing has long been a favorite and has to a large extent replaced e-mailing. This allows for chatter about all sorts of things, but also getting quick replies from friends and colleagues to short questions - stuff that you would have had to use a phone or an encyclopedia for in the analog past.

My favorite for questions is the internet forum - there is one for virtually any topic. Forums have to a large extent replaced usenet groups and there are always lots of very competent people to reach there! My favorite tech forum is; you can get answers to all sorts of questions in no time!

On Mixx and Digg you can search for web pages in a way that Google doesn't do: you find sites people have bothered to tell others about. If you find some page tagged with your search keyword, the chance of hitting a good site for your purpose is good!

Then you have the more traditional information sites, like Wikipedia: always at hand and highly accurate (of course, for "real" work, you'll have to check again, but Wikipedia is usually really, really good).

Last, you have online apps, like Google Docs - do calculations in online spreadsheets, write reports and make presentations: all of this goes into the Web 2.0 stuff - the best part of Google Docs is the collaboration tools it brings, allowing efficient group learning and discussions.

Thursday, June 4, 2009

Ensuring performance at the university

Are you a university student? Performing well at university is clearly important for your future career, especially in today's harsh economic climate. This is obviuos. The big question is nevertheless: what is performance and how can I measure it?

Many employers will tell you that extracurricular activities are just as important as what you study at the U. This is defintiely true and the reason for this is that activities in organizations teach you valuable real-world hands-on knowledge that can be directly applied to your future work place.

Grades. Grades are important - your average grade is important, but you should also excel at something.

Fun. Fun is important too! You can't be a student wihtout living like a student too - or, at least, that would be a bad idea... Fun minimizes the risk of not finishing your studies!

So, how do you find the right balance, and how can you make sure you are performing according to the plan? You need to make priorities. If you are good at theoretical stuff, you should definitely put enough effort into the things you do at university to ensure good grades. Try to identify your main interests and put your main focus into that area - ensure a consistent record: A's in all math and computational exams will ensure you a good tech job!

If you aim for leadership - engage in off-campus activities. Find an organization that fits your interests and seek out your position in that organization.

For fun: find your hobbies, your friends and interests, but choose strategically. Your activities in this category should be refreshing your life and your mood and should not take all your time.

When you have mapped out a strategy - define key performance indicators in each category and track them (number of pub visits with Joe per week, pages read per day in core subjects, etc.). Write down the KPI's for each week and adjust your activities to ensure meaningful levels. Find meaningful levels of each KPI by giving it some though - and adjust as you see how they work. Once in a while you should evaluate if the KPI's are right for you, are you moving in the desired direction? Are they beneficial to your life? If not, seek out others, or even reconsider the entire strategy. But remember, give the system time to work before you evaluate!

Saturday, May 30, 2009

Things that make you unhappy: when special action is needed

Goal setting and KPI monitoring with happiness as the overall goal is fine for making sure that you have progress in your life. There may, however, be situations where special action is needed. If there are things that disturb your life to a large degree, stuff that makes you unhappy and you have clearly identified the item as a source of unhappiness; then you should take more direct action to stop the problem.

If you have such problems, you should think through your options. Is the situation controllable? Is it reasonable that you take action and what possibilities do you have? Will the grunge from this item die out if left alone? If you decide action is called for and justified, you need to make a plan on what to do with the situation. Some actions are purely internal - changes you make to your life to make things better. Some actions involve other people and can be risky and difficult to predict the outcome of. This is, as you all know, because people are irrational and unpredictable to a large extent when it comes to extraordinary situations, such as we are considering here.

If your loved one left you, it is natural for you to be unhappy about the situation. Think about what you can do then. If he/she made it very clear that it is final, finito, then there is little you can do in terms of external action without becoming a stalker - and that, my friend, is definitely not going to make you happy! :-) (Seek som info on stalkers - they're mostly pretty disturbed individuals.....). So --- the action to take is of the internal type: change your life. Get everyting at an arm's length and then start thinking. What can I do to diminish the effect of this horrible event? One approach, that works quite often, is to do absolutely nothing. Just wait it out, and time will heal your sorrows. In some cases, however, this approach is too slow, or just doesn't work at all and may jeopardize your mental health. There are, as I see it, three possibilities:
  • seek a therapist (will often be dangerous to your financial stability....)
  • pick up a new hobby to get your thoughts on something new
  • find a replacement for the "lost item" (e.g. a new girlfriend/boyfriend)
Depending on the severity of the situation, I'd choose some combination of the above. If you are on the edge and ready to kill yourself, do them in the listed order, call a therapist now! :-) If you are just very frustrated, go for the hobby solution, preferably something physical like hill climbing, biking, darts or beer drinking... (don't overdo it though). If you are just lightly frustrated, it was probably not the love of your life, or even close to. Find another one-night, or maybe a rest-of-your-life person by doing the things you usually do to meet new folks.

If the other person is stalking you and thus making you unhappy: call the police. If the police adviced you to sue the stalker, you should consider doing it - take action, of the external type. Be harsh and exterminate the problem!

Then, when the extraordinary situation is corrected, get back to focusing on KPI's and happiness building! Enjoy the holidays!

Wednesday, May 27, 2009

Time tracking - a surveillance tool?

Time tracking software can be quite useful, but it can also be very invasive. This blog hails it as a productivity increaser: I am not sure that using time tracking to track employees non-work-related activities at work is actually a good thing - I am very sceptical to surveillance. This is not a very good way of using a time tracker.

A good time tracker is a very simple app. It should be manual, and each employee should manually enter time spent on each task. And then, talking to the new intern for an hour by the coffee machine is still OK. It really is. For "manual" time tracking software, take a look at .

Keeping focus - happiness on vacation

Germans are known to be focused and "zielgerichtet". This may very well be true for building cars and exporting chemicals, but they seem to loose focus when travelling, according to Germany's largest newspaper, (article, in German). Germans are, according to Bild, the people who complain the most and let themselves be more annoyed than anyone else by small setups during flights. This seems to me as evidence that the most goal-focused people I know of, tend to forget the true goal when travelling - focusing on destination, your next business meeting, the upcoming vacation, or maybe the beer the stewardess is bringing in a second. Staying focus on what is really important allows you to not care about small things happening. Being annoyed over something that you can't change is only going to hurt yourself. So, as an advice to disgruntled German flyers; set a personal goal for your next flight, use measurements (at least mental ones) to montor progress and when the flight is over, ask yourself: are you happy? Was it a nice trip? I bet it was. Gute Reise, Leute!

Recharging batteries - at low or no cost

A few days ago I had a post about maintenance. In my maintenenace plan I have music as an important part; I try to grab the moment and get 10 minutes to myself every day to listen to a song or a piece of music. Just me, the headphones and music - that is truly refreshing for mind and soul!

One of the places I shop for music is iTunes. Another one is my local record store. But, increasingly often I find myself turning to Jamendo for music. Jamendo is a web page where you can upload and share the music you create. Anyone can download music from Jamendo, for free. If you'd like to, you could donate to the artists. There is lots of quality stuff, in all kinds of categories (not just indy stuff). Recommended!

Tuesday, May 26, 2009

Personal finance for today's objectives

As I mentioned in my previous post on personal finances, there is the long-term strategy and there is the short-term strategy. Normally, the long-term takes priority and then one has to adapt the short-term. However, saving for retirement should not make everyday life infeasible. So, if you have to put away 1000 $ /month, do you have enough to live your life in a way that is good for you? If you are broke all the time 'cause you want to be a rich old person some day in the future, you might not live to see that day. Broke people are often unhappy. Unhappy people have shorter lives. Therefore, don't make a long-term plan that limits your life today severely.

I am sure you have stuff you wanna buy tomorrow and you like going out. You should set up a plant that takes that into account. Say you have a long-term plan. If you are short on cash in your everyday life because of this, you have to think. What are the options?
  • Get a new job that's better paid?
  • Cut some expenses?
  • Change the savings plan?
I'd postpone the savings plan until I have figured out what to do, at least partially. If my job today isn't cutting it, and if I don't have any other extremely good reasons to stay, I will look for another job. I put priority on this. At the same time, I'd look for expenses to cut.. Can I find a cheaper grocery store? Save on gas? Electricity? Stuff like that. Then, if this fails (both job and expense cutting): change the savings plan (and get more agressive at saving when you have the better-paid job)!

Monday, May 25, 2009

High performance vehicle!

Looking for good MPG values?

That's well done!

In control of your finances?

Returning to the topic of this blog; how to ensure progress in the important areas of life to ensure happiness and stress-free living, one of the things I deemed important as a student was money. This is, of course, still important to me. When we are talking personal finances, the issue of time comes up. You will have some long-term goals (become debt-free, have enough savings for retirement and so on) and som short-term goals (I really, really need a new iPod! Yeah!). How should you position yourself to ensure your goals don't slip? In order to analyze that, we need to become more down-to-earth and lay out a personal finance vision and put down a strategy for following up on that vision. I will not use the same tools for long-term goals as for short-term goals. Let us put down long-term goals first:
  • debt-free before retirement
  • to have $ 1 million in savings when I retire
to reach those goals, we obviously need to put money into paying down the mortgage (and other loans if there are any), and we need to put money aside. A common strategy is to put a fixed horizon on the mortgage and to follow the payment plan of the bank, to become debt-free. This strategy seems reasonable, let's keep it.

For putting money aside there are more things to choose from. We know that the expected returns from our investments are higher, the higher the risk we are willing to take. However, financial advisors tell me, not all risk is going to result in a higher expected outcome. Only risk that cannot be diversified away allows for a risk premium, says the finance guy. Ok...sounds reasonable (this is classic insight from finance and comes from the "capital asset pricing model").

We also know, from the control point of view, and from common sense, that we should be more afraid of losses as we get closer to target and the terminal time of our savings plan. Therefore, our money placements can be more risky when we are young, because we have time to recover if the market does something bad on the way (or we do something stupid). So, my strategy is to set a requirement on the expected return on investment for each decade, and then find an investment portfolio to suit that return on investment. Then, we need to compute how much to put aside each month and see if we can afford that. Possible investment return requirements:

Age 25 - 35: 15%
Age 35 - 45: 10%
Age 45 - 55: 8%
Age 55 - 65: 5&

We build up a portfolio for our current age bracket (25-35?). It will most likely consist of a lot of common stock (risky to not-so-risky), some money market funds (less risky) and some in a savings account in the bank. Mutual funds are great if you are not investing heaps of money, but beware of the conditions so you don't have to fund the fund managers when they do a crappy job.

So, when this has all been set up, how do you monitor performance and control it? Obviously, you should monitor annual returns. I would also set up a few other financial indicators, such as price-earnings ratio and earnings per share. Then, for example annually, I will adjust the profile such that it fits my desired risk. If I am earning more than expected, is this due to higher risk, or is it OK? If I am earning much less, I would reposition the portfolio (sell some stocks and buy some new ones). In any case, the most important thing is to add to the savings portfolio each month. Why? Compund interest. The sooner you get money into interest-bearing investments, the faster you earn more money. Say you have a dollar to invest. If you invest it today, what will it be worth in the future? We assume an interest rate of 15 % (quite risky!):

1 dollar invested at 15% interest is worth after
1 year 1.15
2 years 1.32
10 years 4.04
20 years 16
40 years 268

After 40 years your dollar is worth 268 dollars. If you had invested 1000 dollars, you'd have 268k available at retirement - compund interest is our best investment friend!

Next post: we'll look at short-term financial happiness

Sunday, May 24, 2009

Digg button added!

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Saturday, May 23, 2009

Three-year degrees at American colleges?

The Washington post today has an article on the fact that some U.S. colleges are now starting to offer 3-year Bachelor's degrees, European style ( Critics, of course, claim that this will take away the traditional broad education offered at universities, and steer more in the direction of job training. In some cases, this may be true. However, they want to offer the three-year degree to especially qualified students that are motivated and intellectually capable of going through with a four-year program in just 75% of the time. Personally, I think this is an excellent approach. For very good students, getting the full benefit of a traditional degree in just three years is a very good option, with the economic advantage of saving a year of college tuition and expenses. 

It will, however, be demanding of the student's, smart as they may be. A condensed program would require better attention, more focus on what is important and self-awareness of the students. Therefore, I think such a program should be accompanied by support functions that teach self management and give students a sound foundation for gaining confidence and dealing with stress in a positive way; the most important thing is to put down clear goals and have measures to guide the fulfillment of these goals!

Regular maintenance - necessary for a well-functioning machine

All technical people know that maintenenace is important for any machinery. Your vehicle's motor needs oil to run. Your computer needs cleaning up now and then. This is also necessary for human beings to function well. A good maintenence plan should include: 
  • time for work-outs
  • quality time with friends and family
  • time for reflection and intellectual build-up
  • healthy diet
  • time to relax
Today being a Saturday, it is a perfect day to think about these things. If you have (at least one) full-time job, family and still a friend or two, its hard to allocate time for all of these elements into your busy schedule. But if you think about it, why is it so hard? I think it all comes down to goal-setting. Put down reasonable goals that you can be happy with for maintenance too. If work-out means a brisk walk to work or just climbing the stairs instead of taking the elevator, that's a start. Of course, real work-outs are better for you, but there is only so much time to allocate, right?

Don't be over-ambitious, but set goals that work for you and make you feel well. Try to be systmatic to make sure your "maintenance plan" doesn't get neglected. Maybe you could even track some numbers (KPI's) to make sure you are behaving according to the plan? Many people do this with diet and workouts, but I think for many of us it would be just as useful to track the number of good books you read, activities with friends and family and the number of hours you sleep per day. If your schedule is packed, thinking systematically about these things is more important than for people with more "free time". Think of relaxing as an activity; then you don't feel the urge to do things all the time! Enjoy your weekend!

Thursday, May 21, 2009

Selecting personal KPI's

How to select good KPI's is a very good question. People go to business schools to learn how to do this, but that does not automatically make them any good at the task. Truth is, selecting KPI's in business environments is pretty hard, and selecting good ones for personal goals may be even more difficult. As always, the solution to difficult problems is to be systematic. The following properties are typical for a good KPI:
  • The value of the variable must say something about your performance with regard to the relevant property/task
  • It must be easy to measure/record
  • You should be able of adjusting it by performing relevant actions
  • Is its ideal value sensitive to external happenings outside of your control?
My suggestion is to pick a set of candidates for KPI's and then analyze them for their potential as good indicators of performance. To each KPI we put up a set of relevant actions, such that we can push the KPI in either direction as needed. Then, for each KPI candidate evaluate whether it has potential to tell you the relevant things about your performance, also when unforeseen things happen. Select the one that has the most positive indicators and try to identify its best value. Then, for a while try to "control" this variable at its ideal value by using your designated actions. Hopefully, this has led you to focus on the right things. This was how I came up with counting co-workers coming in to discuss work, and those who were only in for a chat as a good KPI for seriousness. 

Wednesday, May 20, 2009

Followers, followers

Hello, there, readers! I hope you like my blog and I hope you want to try out some of my techniques for life management. I'd be very happy if you'd become followers of this blog, and even happier if you live constructive comments to my posts! Thank you for your interest and happy reading!

Personal branding - a necessity for happiness

Have you ever thought about personal branding? If you are en entrepreneur, I am sure you have. If you are employed, probably not. In my daily professional life, personal credibility is everything (I am a researcher). It doesn't matter how good my information is, unless people feel that I am trustworthy and exciting. My goal is to be someone other people want to listen to. I thought out the following important parts of my ME Inc. brand: 
  • serious impression
  • being well informed
  • a good friend
Ok, so that is what I want people to think about me. I believe that when other people mention these keywords when asked to describe me, it improves my happiness. Then I lay out a strategy for implementation, or for self-branding. Taking one thing at the time:

Serious impression
  • Dress well
  • Use polite and articulated language
  • Appear confident
Being well informed
  • Read newspapers (I have a fair selection at home)
  • Use RSS feeds from online news sources
  • Talk to people at work about happenings
  • Read work-related literature every day
Good friend
  • Listen more than you talk
  • Invite people out when they are not doing well
  • Do fun things together with others
  • Have confidence in others, show that you trust them
I could go ahead and just try to live by these guidelines. But do they work? I need to know. And, in order to know, we must measure. Therefore, I want few, but very relevant measures that are easy to track. Therefore, I want one KPI for each element  here. Take serious impression. How can I quantify my impression on other people? I could make a questionaire, but that seems redicilous and impractical. I have found that one that seems to work, at least at work :-) I count the number of people visiting me in my office during the week, and write down whether they are there for socializing or for work-related business. Then I compare the weekly ratio of work related to social visits. I won't reveal what my weekly numbers are, at least not yet. But I am generally happy with it, and I wasn't when I started doing this. Think about it, if the number of social visits is too high relative to work related ones, how can you change this without harming your friends and without killing the time you have to do real work? Bad ways of changing this KPI are:
  • Telling your friends to go away (bad move)
  • Have meetings all the time to discuss with colleagues (even worse move?)
These seemed stupid to me and they are. What I do, when social visits are dominiting, is that when a visitor goes pure social, I start talking about work-related stuff after he has been there for 4 minutes (unless he is actually talking about something fun, non-work-related stuff, which is seldom). That has not led to this guy stopping from coming to my office, but now he is more often than before coming to discuss work-related stuff. I have increased my seriousness factor. If you use this strategy yourself, remember to protect some socializers, or you will have a very boring day at work. Keep the most interesting ones in the "socializer" category :-)

So, how do I know how far to run this? I have chosen to do it slowly, convert socializers into professional contacts one by one until you feel more happy. Don't convert more than 2-3 per month (you need to make sure you don't overdo it or actually become a sociopath). I am happy now, and I have found a good ratio of work visitors to social visitors to be about 70%.

Of course, if work to social is increasing and I feel unhappy, I need to convert som workers to social visitors. This is more difficult than the other way around, and I have so far had no need to do so. One thing I can think of to do this is to show them a Ted lecture and discuss some funny things. They key to managing people without letting them know is to make them feel well while being managed. 

The technique is thus:
  • Define your important goals
  • Find a KPI that captures these goals as well as you can
  • Find out how to change the KPI without conflicting your true goals
  • Find a good value of the KPI to maximize happiness
  • Use the actions you identified to change the KPI to adjust it to its "optimal" value
Hope someone out there will try the technique and that it helps managing their lives!

Tuesday, May 19, 2009

Management and implementation philoso...

Management and implementation philosophy for your life - how it started out

My professional background is as a control engineer. In addition to engineering, I have an interest in business management and how we can organize our lives to ensure happiness. In periods, especially in university, I have felt stressed about fulfilling my own expectations. I have been worried I would not be able of achieving my goals. Towards the end of my Master's degree in control engineering, I found it more challenging to determine how to stay in control of my life and my own happiness, than to solve the technical problems related to my research. Unfortunately, the research did not look good, most likely because of my stressed out state of mind. I had to deal with my inability to focus on what's important. I had to lay out a system. 

Deep down, as I was, in the theories of control engineering and performance of industrial machines under uncertainty, the natural approach for me was to take inspiration from process control when setting up a self management and motivation system. In a typical industrial process, there are several layers of decisions, separated by time (how often decisions must be made). First I explain how this system works, then how we can adapt it to less technical problems. 

At the top level in managing an industrial process is economics. Economics can be translated into a profit function, and we seek answer to the question: "how should I set up my production to maximize profit"? Using a model of the process, we can then calculate how much we should produce of our product per time (say 1000 gallons / day of diamond extract) and at what quality we should do so. This doesn't say how to do it.

An industrial process may have certain elements that are unstable. Before anything else is done, these elements should be stabilized. This is usually done using automatic control. One example of an unstable element is a tank with a drain. If we do not control the level in the tank by adding more contents, it will eventually go empty. To remedy this, in industry, we measure the level in the tank and adjust addition of more diamond extract accordingly, to ensure the tank level is within acceptable limits. 

After stabilizing all unstable elements we need to start thinking about out true goal: profit. We know how to set all decision variables (feed rates, temperatures within process equipment, etc.) to achieve optimal profit for an assumed set of conditions. Reality is, however, very uncertain. Making a plan once is not enough. Unforeseen events are going to hit our production machinery, and the question is, what to do then? Such unforeseen things can be change in the ambient temperature which can give more or less heat loss, a change in the feedstock to the process, making it necessary to add more cryptonite to get the diamond extract, et cetera. The point is, when external things change, so does the process. And the optimal way of making profit. 

There are two fundamentally different ways of looking at this:

a) we can try to estimate what all of these conditions truly are and optimize again, and then implement the new plant. Then we wait a while and repeat. In industry, this is commonly done and is known as model predictive control. It requires good understanding of the connection between our actions and their outcomes.

b) An alternative we can try, is to find things to measure that do not change much in their optimal values when the environment changes. We find something to hold constant, and when we do so, the inputs (flow rates and so on) will automatically take on their new optimal values, or at least, almost so. This strategy is often used by businesses. They call such measured variables key performance indicators (KPI).

We are going with the KPI approach. We thus have three layers; 

Optimal planning --> Adjustment based on KPI values --> Stabilization

Let us consider how we can apply this to managing how we live. Our optimal performance is most certainly related to profit, but not profit alone. The overall optimum is happiness. However, it is very hard to see the relationship between our daily decisions, and our long-term, overall happiness. We therefore divide the problem into separate problems that we hope to work with independently. When I first started thinking about happiness, I came up with a few categories that seemed important to me. Those were: 

- Love (I did have a girlfriend)

- Money (being poor is tough)

- My Master's thesis

- How others see me

I have kept all of those, and added a few more. Let us stick to those four and see how we can apply the management philosophy of industrial process to them. Let us start with the bottom one; building a reputation and adjusting your branding strategy when the social climate changes. This will be the task of our next posting. Hope to have the post ready shortly.

Life under control - new blog on self management

People today are often struggling to perform; privately, at work, in the local organizations and even when they are alone. The percieved need to be an achiever can be more than just challenging. Often, people feel bewildered and estranged, often by performance requirements set by themselves. Many of these requirements are unrealistic. Some are not reachable without a good system. When we put down goals that we cannot reach, we feel exhausted, unhappy and out of touch with society. We've all been there. I've been there. However, I've found a trick. Happiness is about systems. We need a system to organize our efforts, much like the systems used to manage companies or to control industrial processes. After all, those are processes seen to be so complex that systematic approaches are strictly necessary. This is obvioiusly true, trying to run a multi-billion-dollar corporation by intuition and no system is a sure way to ruin. But isn't life more complicated than companies are? Isn't life more complicated than industrial machines? I'd say, most definitely. What if we adapt system tools to deal with life's challenges? My experience with the system-based way of self-management has been joyfull and fruitfull. In this blog I let you in on the secret. Who knows? Maybe you will give it a shot and maybe it will make you feel more at ease and more successful. I hope you do.