Keep Emotions Out of Your Portfolio

This is a great article of how to deal with over-thinking. It gives you tips on how to think strategically versus emotionally and trusting your intuition. This goes with week 6 topic of decision making and creative problem solving.

Stop over-thinking your portfolio. Take a mental "time out" and try some deep-breathing exercises. Do whatever it takes to rein in your caveman brain, because right now, your mind is one of your biggest liabilities -- emotionally and financially.

That's right: The ingrained tools that keep us out of harm's way -- our drive to seek more and more information, to look for patterns, to compare options, and even to flee to safety -- are the very same ones that compel us to make boneheaded financial mistakes. Worst of all, often we're not even conscious that we're on a financial suicide mission until it's over.

Re-train your brain
The good news is that, with pointed, conscious effort, you can tame your gray matter and neutralize the psychological noise that leads to bad investing decisions. The first step is to recognize the analytical and emotional tripwires in your head.

Here are four major cognitive biases to focus on nipping before they get the better of you and your money.

Myopic loss aversion: When things go swimmingly, it's a snap to keep a long-term perspective. When the bad news keeps coming and we're terrified of losing money, our time horizons shrink dramatically. We no longer project what will happen to the market, or to our investments, over the course of the next three to five years. Instead, we focus on what happens over the next three to five minutes.

The cure: Go long. If you think like a short-term trader, then you'll be tempted to start acting like one. And right now, nothing could be worse for your sanity and your savings. Remember that investing success is not measured in minutes or even months: At The Motley Fool, we pick stocks for their long-term potential. Stick to your core investing principles, and you'll do fine.

Information bias: With stock market news dominating every major outlet, we're bombarded with information -- and we keep watching because we just can't seem to get enough. Worse yet, most of the information isn't even relevant to the decisions we face.

The cure: Avoid information overload. Turn off CNBC. Immerse yourself in a novel, not the Internet news sites. Watching the market's conniptions and CNBC pundits' breathless banter simply makes the situation seem more dire and puts you at the mercy of our next cognitive bias ...

Social proof/herd mentality: It's easy to assume that when the market drops 18% over the course of the week, "it" knows something we don't. That assumption gains credence as others presume the same. Robert Cialdini, author of Influence: The Psychology of Persuasion, explains how this pile-on takes place: "The greater the number of people who find an idea correct, the more the idea will be correct." So everyone starts selling in a panic -- "The market is going down and I want out first!"

The cure: Ignore "them." Like your mother said, just because everyone else is jumping off a bridge doesn't mean you should. Instead, stick to your plan. Invest on a schedule and tune out the crowd. While everyone else is trying to game the system, you should be on the lookout for the opportunity to buy great businesses, with strong balance sheets, on sale. Tune out the noise and brush up on the basics. Hard times can be learning opportunities, which is a lot more productive than curling up in the fetal position and rocking back and forth for hours.

Anchoring: Focusing solely on a number is one of the most dangerous mental hiccups to your bottom line -- and lately we're drowning in a sea of numbers (stock prices, market indices, etc.). Here's how it works: Suppose you go to a used-car dealership and find a car priced at $7,000. You return later that afternoon to find that it has been marked up to $9,000. Nine grand strikes you as too expensive, even though you know nothing about the actual value of the vehicle. However, had you first seen the car priced at $11,250 and talked the salesperson down to $9,000, your mind would tell you that you were getting a great deal. The car is downright cheap! In both cases you anchored on a number -- a completely arbitrary number.

The cure: Anchor on value, not price. Anchoring is devastating in investing terms: Remember, a stock isn't cheap because it was more expensive yesterday or even last year. So rather than anchoring on price, anchor on value. Do your research and determine the price you're willing to pay for the company's future earnings stream before you look at the stock price.

How To Motivate Your Employees Without Money: 3 Employee Motivation Techniques That Work Like Magic

Now that we have an economic crisis looming above our heads, learning how to motivate your employees without money becomes more important than ever. Doing this can help you improve the overall performance of your employees. It will encourage them to work ever harder and strive for the company’s goals.

So do you want to know how to motivate your employees without money? Here are a few ideas that are worth checking out.

1) There are other things equally, or more, important than money.

Perhaps the first thing you have to do is to instill the belief that money is not all that. Encourage charity among your people. After all, there are more important things in life at stake. A company that has solid values will get very far. Encourage values such as service, trust and hard work.

Those who show exemplary values should be rewarded. Not by money, because that will defeat the purpose, but by other things. Say a medal, trophy or certificate of achievement or recognition. These things don’t have to cost much, but they will be treasured by the recipient because they appeal to the employee’s ego.

2) Be one with them.

Another way on how to motivate your employees without money is by being an example of hard work and resilience. If you’re a supermarket manager, for example, you can always dedicate a few hours of your time making rounds and helping customers get what they want.

Don’t use your position to lord over your employees. That’s not going to motivate them to perform better. In fact, that will only drive them to do worse. Instead, show them that you’re not embarrassed to do what they’re doing. Instill a bit of pride in their work by not hesitating to help a customer out yourself.

3) Praise work well done.

When employees are praised, they generally feel better about themselves and about their situation. Don’t be afraid to tell your cashier that he or she is doing a good job. Don’t hold back when your employees show dedication to their work.

A lot of companies have weekly meetings so why don’t you use these meetings to acknowledge jobs that are well done? Believe me. Small words of encouragement go a long way.

If you want to know how to motivate your employees without money, you’re going to have to appeal to the other things that they hold dear. Make sure to emphasize positive values, promote cooperation, serve as a good example and acknowledge work that is well done. When you do this, employees will do everything in their power to perform better.

http://www.articlebiz.com/article/551107-1-how-to-motivate-your-employees-without-money-3-employee-motivation-techniques-that-work-like-magic/

I found this article interesting and goes with the audio lecture from week 4. At the beginning of March we will be hosting an all hands call with the entire team to kick-off March. March historically has been a high performing month with a cash incentive program. This year we are going to get the team together and use these type of motivational tactics to get the same high performance result without using cash incentives.

Favorite colors test shows CEOs are different; take the test

Check out this article, it’s an interesting personality color test. The results can steer people toward a career that matches their personality and strengths with jobs they might find enjoyable.

http://www.usatoday.com/money/companies/management/2010-02-08-ceocolors08_ST_N.htm?se=yahoorefer

The test takes about 60 seconds. It is almost entirely visual and asks people to click on colors, sometimes ordering as many as 15 colors from favorite to least favorite. The results turn out a personality profile that is far from perfect, but is proving to be as valid as more established and lengthy verbal tests such as Myers-Briggs and the Gallup StrengthsFinder. The results can steer people toward a career that matches their personality and strengths with jobs they might find enjoyable.

http://www.deweycolorsystem.org/

Strategic Planning Process

The Strategic Planning Process
In the 1970's, many large firms adopted a formalized top-down strategic planning model. Under this model, strategic planning became a deliberate process in which top executives periodically would formulate the firm's strategy, then communicate it down the organization for implementation.

The Strategic Planning Process:

• Mission
• Objectives
• Situation Analysis
• Strategy Formulation
• Implementation
• Control

http://www.netmba.com/strategy/process/

Came across a great website the breaks down the Strategic Planning Process. Wanted to further my research on planning for the new systems implementation I wrote about in my previous blog.

New System Implementation

Our company is in the process of implementing a new Professional Services Automation System. We had our first kick-off meeting this week. This project is going to take a year before going live. I am part of the extended core team, this team consists of project managers, project directors and operations managers. We are taking ownership of requirement, design, and testing of the system. I look forward to using best business/planning practices learned through the Principles of Management course within this implementation.