Category Archives: Well Said

Ten Reasons Winners Keep Winning, Aside from Skill (HBR)

Whether the game involves competing every four years in the Olympics or every day in a business, winning brings advantages that make it easier to keep winning.

To understand sustainable success, I compared perpetual winners with long-term losers in professional and amateur sports and then matched the findings to business case studies for my book Confidence. The sports were a comprehensive mix including women’s soccer, men’s and women’s college basketball, major league baseball, U.S. football, international cricket, and North American ice hockey.

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I found that winners gain ten important advantages as a result of victory — and that smart leaders can cultivate and build on these advantages to make the next success possible.

1. Good mood. Clearly everyone feels good about winning, while emotions sag at failure. Emotions affect performance. Positive moods produce physical energy and the resilience to persist after setbacks. While losers use any excuse to stop, winners sometimes play on even while injured, lifted by a kind of winners’ high. Moreover, psychologists find that moods are contagious. Winners’ exhilaration is infectious. Losers’ gloom can be toxic.

2. Attractive situation. Whether at children’s soccer games or in the office, losers go home early. Winners stick around. My studies show that there is less absenteeism or tardiness in organizations known for their successes. There is also more solidarity, because people spend more time together feeling good about what they can accomplish. More time together brings more chances for information-sharing and mentoring.

3. Learning. Losers get defensive and don’t want to hear about their many failings, so they avoid feedback. Winners are more likely to voluntarily discuss mistakes and accept negative feedback, because they are comfortable that they can win. Because they are confident about the possibility of winning, they see practicing as a route to a positive outcome, not as a punishment. For athletes, practice matters. Winning is often found in mastery of the details. As a former student found in studies of swimmers who did and didn’t qualify for the Olympics, excellence consists of examining and improving many small processes and routines.

4. Freedom to focus. As every golfer and tennis player knows, you must keep your eye on the ball. Losers often punish themselves in their heads. Winners have fewer distractions. Golf pro Tiger Woods won nearly every championship until hit with personal problems of his own making, which was followed by loses on the golf course.

5. Positive culture of mutual respect. For anyone who plays on a team, winning makes it easier to respect and listen to one another, because after all, if you win together, then the presumption is that everyone is a good player. Winners can maintain high aspirations and act generously toward others. Losers are more likely to blame others and disdain them as mediocre, creating a culture of finger-pointing and infighting.

6. Solid support system. Behind every high performance athlete or team is a cadre of coaches, friends, and fans that fuel motivation. Winning enlarges the circle of backers. Losing erodes support. For instance, the cheerleaders for one perpetually losing college football team used to leave the stadium at half-time. When even their cheerleaders feel they won’t win, how can athletes gear up for the next try?

7. Better press. It’s not just the buzz at time of victory that separates winners from losers, it’s also the more favorable story about the past and future. Winning provides a halo that makes everything seem to glow. Losing causes observers and analysts to probe for reasons in a rewritten version of the past that makes continuing losses seem inevitable.

8. Invitations to the best parties. Really. Winners get invited to the White House, Buckingham Palace, key conferences or exhibitions. They gain access to networks and relationships that confer benefits that maintain winners’ momentum, such as early information or better deals. Who invites the losers?

9. Self-determination. Winners have more control over their own destiny. “Why tamper with success?” we often say. Winners are left alone, getting a free pass on reviews (occasionally tragically, as at Penn State, where locker room abuse went uninvestigated). Losers get attention of the negative kind. They are encumbered with “help” — special committees, audits, reviews, frequent visitors. Enough of that, and losers spend their time in meetings instead of practicing and improving performance.

10. Continuity. Lose too often, and heads roll. New coaches, new strategies — like HP’s lurching between hardware and software or Yahoo’s parade of exiting CEOs. High turnover consumes time and attention. More time spent getting people on board leaves little time to fully execute any particular game plan. It’s hard to start winning again until the situation stabilizes. Winners have the luxury implementing long-term strategies and planning for orderly succession.

Winning streaks eventually end because winners can get over-confident, slipping into arrogance or complacency, or because the competition gets better. But leaders can build on the advantages of winners to encourage a positive spirit, disciplined focus, mutual respect, lots of practice on the details, and lasting support systems that can make successes and comebacks more likely.

Editors note: Tony Schwartz thinks our culture has an unhealthy obsession with winning. Do you agree? Read his post and let us know what you think.

 

Yes, house rent can be a form of saving!

It should not be seen as lack of ambition when I say that I am not so much into real estate but living under a rent-free house would give me satisfaction, better still a dream house.

With this thought, the allure of mortgage has always been my best pick.  Being a bank staff, the interest rates applicable are incomparable to the commercial long term lending rates in any financial insitution in the market. There’s also something about age that I’m favors me.

This article ‘House rent is not your enemy’ by Bernard Were really got me thinking….

In a decisive resolve to own a family house, a couple who reasoned they wanted to stop paying rent and live in their own house, arranged for a Ksh 47,000 per month 25 year mortgage plan with a Ksh 475000 down payment on a property valued at Ksh 7.5M .I took out my calculator, did my quick math and it intrigued me the rationale that would inform such an evidently prohibitive choice. While it seem an obvious case of common sense to me and I guess indeed to many folks, this well meaning couple evidently allowed their innocent desire for family comfort and convenience to cloud their sense of judgment and consequently deny themselves an opportunity to leverage themselves for a solid financial foundation.

For a start, why would one pay Ksh 7.075M more for anything?

This by all standards is a tidy sum you would agree. But there are arguments for the logic though, one of which, that in 25 long years the property price will have appreciated considerably; a fact I obviously wont dispute.
But therein too lies my investwise beef! Let’s suppose a credible chance that this couple would keep the promise of their bargain and that is, never to default in their monthly installments (failure would in all likelihood mean losing the property and any contributions remitted)! 25 years for a couple in their mid 30, means the mortgage term would take the rest of their active years, perhaps to retirement. Consequently these means they would own the house yes, but perhaps that would be the only thing they would have accomplished in their working life with the enormous resource advantage that is evidently at their disposal.
For this family, the connotation- rent, it appears is what they had an issue with, and consequently moved from a Ksh 15,000 monthly one (this is what they were paying as rent)for a two bed roomed flat to one christened -mortgage going at Ksh 47,000 with Ksh 475000 “appreciation,”- for what?


Picture this mathematics: These extra Ksh 32,000 per month channeled to a simple monthly investment giving modest return of 12% p.a compounding interest will in just 25 years accumulate to over Ksh 60,000,000! That’s right! That means these good people would still live comfortably paying rent but using the extra- capability to invest for returns that would enable them acquire- if they desire to, not only a family house but also capital for other venture if they choose to, at the end of the 25 years. The Ksh 475,000 can be a good enough capital for simple investments as forex or shares portfolio.
While it won’t be feasible here to offer full synopsis about such simple common wisdom on money sense, my advice to this folk as indeed to those that would find themselves in a similar hole was rather a simple one. They were better off paying rent than living off a “mortgaged vision”. And even with that commitment having been entered into, to plan an exit strategy and secure their financial liberty once again. How? By finding a suitable tenant for this property and engaging him/her to pay for the mortgage on their behalf. Or better still, if they could, find someone who would pay slightly more, say, Ksh 50,000 per month. This would then mean that at the end of it, they would get some change for part of their Ksh 15,000 rent and still acquire the property for free, in the meantime releasing pressure off their pay slips to think of investing for their future.
They thanked me for helping them see it that way!

From Bernard Were.

How you can make profit on rental income but still have no cash!

I recently read an article in the Sunday Nation by Mungai Kihanya on the subject topic that really got me thinking, yet again on rethinking on mortgage decisions….read along below:

Last week’s article ended on a rather curious note: that a house rented out while still on mortgage is a loss maker and consequently, the owner deserves refunds from the taxman.

However, as pointed out in the article, that loss-making situation does not last forever. The reason being that the amount of interest paid on the mortgage reduces every subsequent month and also that the rent collected increases gradually with time.

We looked at the case of a house bought with a Sh5 million mortgage repayable over a period of 15 years at 18 per cent per annum. The monthly instalment comes to Sh80,521. That amount has an interest and a principal component.

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In the first month, the interest is Sh75,000 and the principal is only Sh5,521. At the end of the one year, the monthly instalment still remains Sh80,521 but now the distribution is Sh74,019 and Sh6,502.

It is possible to tabulate this progression on a year-by-year basis and to get the total interest paid each year for the entire duration of the mortgage. The banks call it an amortisation table.

If we assumed that the rent remains fixed at Sh30,000 per month during the 15-year period, then we only need to look for the year when the interest paid goes below Sh360,000. This will be the year when the house begins to make a profit — of course there is the implied assumption that there are no other costs incurred.

It turns out that this will only happen in the 13th year of the mortgage. The interest component of the repayments will be about Sh331,000. This is Sh29,000 higher than the rent. But chances are that the surplus will be eaten away by other costs; thus the house will just break-even!

But of course the assumption that the rent remains constant is not reasonable. Generally, rents increase by between 15 and 20 per cent every two years. Thus, we can reasonably expect that in the third and fourth year, it will be Sh35,000; this will then rise to about Sh42,000 in the fifth and sixth years; and so on. The corresponding annual amounts will then be Sh420,000, Sh504,000 and so on.

Extrapolating this trend into the future, it turns out that the house will begin to make a profit in the ninth year of the mortgage. By this time, the rent is likely to have increased to Sh60,000 per month — double the amount collected at the beginning!

In that year, the total rent will be Sh720,000 while the interest paid on the mortgage will be Sh655,000. This leaves about Sh65,000 which is more than enough to take care of other expenses. Thus the house might make a small profit.

However, it is important to note that even though the house is making a profit, the Sh60,000 rent collected will still not be enough to cover the Sh80,521 mortgage instalment. Thus we are now in an interesting position where it is making profits but its cash flow is negative!

Best Practices for Effective Meetings-Part II

It’s amazing how often people will complain about a meeting being a complete waste of time — but they only say so after the meeting.

Really, it is commonly taken that meetings are the events where minutes are taken and hours wasted but based on part I of the subject on best practices for effective meetings as well as those to be noted below, since they can not be avoided they can be improved, effective and made resourceful.

I am biased to agree that when meetings become frequent more so on the same ‘creative yet unresolved or still under research’ issues, then they lose their purpose. With these other pointers on making such effective would be:

4.   Opening Meetings

  • Always start on time; this respects those who showed up on time and reminds late-comers that the scheduling is serious.
  • Welcome attendees and thank them for their time.
  • Review the agenda at the beginning of each meeting, giving participants a chance to understand all proposed major topics, change them and accept them.
  • Note that a meeting recorder if used will take minutes and provide them back to each participant shortly after the meeting.
  • Model the kind of energy and participant needed by meeting participants.
  • Clarify your role(s) in the meeting.

5.   Decision Making

  • At meetings, reaching decisions can be complex and challenging.
  • It is important that participants who wish to speak and express their views have an opportunity to do so.
  • It also is important to proceed carefully, listen to concerns and opinions, and consider alternatives. Thus, when a decision has been made, it is more likely that a larger majority of participants will accept and support it because they have been involved in its creation.
  • When decisions are made too quickly, there is a good chance that someone and his/her views have been left out.
  • The following process can be used to organize decision making:
  1. Define the issue. State it clearly and in writing if necessary.
  2. Gather all information relevant to the issue. All pertinent facts and ideas need to be known and meeting participants and the chairperson must distinguish between facts and opinions. A decision may need to be deferred so that additional information can be gathered.
  3.  List all possible solutions or actions. Encourage discussion to generate new ideas and alternatives.
  4. Choose the best possible solution. Use the process of elimination to refine and combine the list in step 3.
  5.  Make the decision. Formulate a motion which is a formal proposal for action or decision by a meeting, vote on it and then record the results.
  6. Evaluate the outcome. This is usually done once a decision has been implemented and can be handled through general discussion or preparation of a written report.

6.   Group Discussions

  • Well managed meetings allow all participants to be part of the decision making process.
  • Following are some techniques that the chairperson can use to encourage and support participation and discussion:
  1.   The chairperson solicits views
    The chairperson might suggest that comments are welcome from the group and actually ask specific individuals to share their views. Participants thus hear a number of abbreviated opinions rather than listening to one or two long speeches.
  2.     A survey

After a short discussion, the chairperson asks for a quick show of hands to determine support for proposed ideas. This should help the chairperson determine how to proceed. This encourages participants to express an opinion.

       3.     Groups

Groups can be very useful in the decision making process at large meetings and for generating new ideas from participants. The meeting divides into smaller groups, i.e. four to eight people, for a short time to discuss assigned issues. A person is chosen as a recorder to list the conclusions of the group. The groups then report their ideas to the entire meeting. The alternatives that are generated will assist the meeting in resolving issues and making decisions acceptable to all.

4.     Brainstorming

This is a procedure for generating many spontaneous and diverse ideas which can help to develop alternatives that will assist in resolving the issue being discussed and in coming to a decision.

Guidelines for brainstorming are:

  • Don’t criticize the ideas of others while brainstorming;
  • impractical suggestions may trigger practical ideas among other participants;
  • the more ideas, the greater the chance of developing a very good idea;
  • build on the ideas of others, improve on a previous idea or combine several ideas into one;
  • choose one person to record all ideas on a flipchart so that everyone can see them and a record exists; and
  • after a brainstorming session, critically screen the list of ideas for four or five consistent items or themes. Also, if brainstorming has been done in smaller groups, identify similar issues from the lists of individual groups. Finally, develop this “short list” of ideas into options for decisions.

7.   Managing Conflicts

  • Conflicts can arise in meetings or during discussions.
  • Many assume that conflict is negative but it can be positive if it leads to innovation, positive change or agreement when discussing an issue.
  • It is important to remember that disagreement is necessary to the process of group decision making.
  • The chairperson may have to step into resolving conflict in a meeting in order to reach an acceptable decision.
  • Following are steps that are useful in resolving conflict:
  1.  Recognize that there is conflict and identify the issue causing the disagreement.
  2.  Collect all information relating to the conflict, share it and assess it.
  3. Propose possible solutions, including the consequences of the proposals.
  4. Find a mutually acceptable resolution without coercion.
  5.  Carry out the agreement and evaluate its effectiveness, with all parties sharing in the evaluation.

If a meeting does get out of hand, take a short break. When the meeting reconvenes, the chairperson can summarize the discussion up to the point of conflict or have opposing sides summarize their respective positions. The chairperson can then attempt to lead the two opposing sides in negotiating a solution.

8.   Time Management

  • One of the most difficult facilitation tasks is time management — time seems to run out before tasks are completed. Therefore, the biggest challenge is keeping momentum to keep the process moving.
  • You might ask attendees to help you keep track of the time.
  • If the planned time on the agenda is getting out of hand, present it to the group and ask for their input as to a resolution.

9. Evaluation of meeting process

  • It’s amazing how often people will complain about a meeting being a complete waste of time — but they only say so after the meeting.
  • Get their feedback during the meeting when you can improve the meeting process right away. Evaluating a meeting only at the end of the meeting is usually too late to do anything about participants’ feedback.
  • Every couple of hours, conduct 5-10 minutes “satisfaction checks”.
  • In a round-table approach, quickly have each participant indicate how they think the meeting is going.

10.   Evaluating the Overall Meeting

  • Leave 5-10 minutes at the end of the meeting to evaluate the meeting; don’t skip this portion of the meeting.
  • Have each member rank the meeting from 1-5, with 5 as the highest, and have each member explain their ranking
  • Have the chief executive rank the meeting last.

11.   Closing Meetings

  • Always end meetings on time and attempt to end on a positive note.
  • At the end of a meeting, review actions and assignments, and set the time for the next meeting and ask each person if they can make it or not (to get their commitment)
  • Clarify that meeting minutes and/or actions will be reported back to members in at most a week (this helps to keep momentum going).

12.   After the Meeting

  • Follow-up on action items and begin to plan the next meeting.

Best Practices for Effective Meetings-Part I

When members of an organization gather at a meeting, their purpose is to conduct business—to collect information and discuss issues and to make decisions on how these issues will be resolved or addressed. The methods businesses choose to carry out these functions will frequently depend on the type and size of the meeting.

The process used in a meeting depends on the kind of meeting you plan to have, e.g., staff meeting, planning meeting, problem solving meeting, etc. However, there are certain basics that are common to various types of meetings. These basics are described below.

Keeping in mind that meetings are very expensive activities when one considers the cost of labor for the meeting and how much can or cannot get done in them, it is essential that meetings are conducted effectively and efficiently.

  People who do enjoy meetings should not be in charge of anything-Thomas Sowell

1. Selecting Participants

  • The decision about who is to attend depends on what you want to accomplish in the meeting. This may seem too obvious to state, but it’s surprising how many meetings occur without the right people there.
  • Don’t depend on your own judgment about who should come. Ask several other people for their opinion as well.
  • If possible, call each person to tell them about the meeting, it’s overall purpose and why their attendance is important.
  • Follow-up your call with a meeting notice, including the purpose of the meeting, where it will be held and when, the list of participants and whom to contact if they have questions.
  • Send out a copy of the proposed agenda along with the meeting notice.
  • Have someone designated to record important actions, assignments and due dates during the meeting. This person should ensure that this information is distributed to all participants shortly after the meeting.

2. Developing Agendas

  • Develop the agenda together with key participants in the meeting. Think of what overall outcome you want from the meeting and what activities need to occur to reach that outcome.
  • The agenda should be organized so that these activities are conducted during the meeting.
  • In the agenda, state the overall outcome that you want from the meeting
  • Design the agenda so that participants get involved early by having something for them to do right away and so they come on time.
  • Next to each major topic, include the type of action needed, the type of output expected (decision, vote, action assigned to someone), and time estimates for addressing each topic
  • Ask participants if they’ll commit to the agenda.
  • Keep the agenda posted at all times.

Meetings are indinspensable when you don’t want to do anything-John Kenneth

3.   The Chairperson

  • The meeting chairperson should be carefully chosen.
  • The chairperson is responsible for providing leadership to the meeting, should be familiar with parliamentary procedure and set an example by consistently conforming to it.
  • As the leader of the meeting, he/she must understand the bylaws and policies of the business, the goals and purpose of the meeting, and he/she must know the participants and motivate them to contribute.
  • The chairperson also has the power to maintain control of the meeting, should any questions about procedure arise or conflict occur.
  • The chairperson plays the following important roles

                   Knows Those Attending the Meeting and Helps Them Participate: Determines the skills and abilities of participants, involves and motivates them in the activities that have been designated to them, checks on their progress and provides guidance and assistance.

                  Plans Ahead: Assesses the items of business that need to be addressed by the meeting, decides on the options available and then chooses the best option that will complete the task.

                Prepares for Meetings: Plans the agenda with the assistance of the secretary and other officers as required and checks on all meeting arrangements.

               Presides at Meetings:Presents the rules of order for approval by the meeting, follows the agenda, involves participants in the discussion and ensures that order is maintained.

             Evaluates Meetings: Evaluates every meeting to ensure that its objectives have been met.

A modified good read from my cuurent employer…check out for Part II.