Career Capital - Useful traits

What are the personality traits that are associated with a good employee?  When hiring, what should you look for?

Conversely, we all work for somebody so what are the traits we should develop in ourselves?

I saw this list some place.  It isn't mine, but I can't remember where I found it.  It's a good list:

1. Action-oriented
2. Intelligent
3. Ambitious
4. Autonomous
5. Leadership
6. Cultural fit (personality)
7. Upbeat
8. Confident
9. Successful
10. Honest
11. Detail oriented
12. Modest
13. Hard-working / results-oriented
14. Marketable / presentable
15. passionate

I think one of the most interesting ones on that list is "marketable/presentable".  I know many people who fail to separate their work persona from their personal life persona.  I sometimes struggle with this, as well.  There is a constant battle between being authentic and being marketable.

If your personal life persona is naturally highly-polished, buttoned-down and carefully worded then that's probably fine -- lucky you!  If your natural persona is not highly diplomatic and you aspire to a role that requires careful diplomacy then there's a conflict -- adopt a different work persona or adopt a different career objective or prepare for a pretty frustrating slog.

"Decision Intelligence"

What are the steps of successful business strategy?

• Market Intelligence (outside facing)
• Market Sizing/forecasting
• customer trends, workloads, size, growth
• drivers, sensitivity, elasticity
• current customer groups, neighbors.  things your products could serve
• what are the customer needs for each group of customers?  what measures of performance and quality are important to them and what is their utility curve?
• Design Win Pipeline
• What RFQ and RFP are in the pipeline?
• What products best fit the customer requirements, both on roadmap and off roadmap?
• What are our chances for each opportunity?
• probability of the win
• size of the win, assuming we do win
• Prospect Estimations (workload / sku mapping)
• how will products play in the market, given the needs of the customers?  how do the performance/quality characteristics of these products match up to the needs of the customers?
• What does the competitive environment look like?  How do our products stack up?
• How much market share can we expect to capture?
• How much can we charge for our product?
• Business Intelligence (inside facing)
• Product Roadmap / communication
• what products do we have in the market now?  what about our competition?
• What products are in the pipeline?  What products are we not currently developing but could be?
• what are the important performance/quality characteristics of those products?
• what is the cost structure for those products?
• Project Planning/execution
• When will our products be ready?
• What resources will we need to develop our product?
• What resources will we need to bring our product to market effectively?  To support our customers?
• What risks are there to our project planning?  How can things go wrong, and if they do, what will the impact be?
• Execution Risk
• Upstream Roadmap risk
• interrelationships between project decisions  - 
• what projects are required for other projects?  
• what projects are required to build a product?  
• what projects help shape the markets? 
• what projects are required to take a product to market?
• Decision Intelligence
• Project strategy (portfolio) / funding
• funding decisions - what projects to do / cancel / keep alive
• Enterprise Risk
• What major pivot factors exist that would radically change the value of our company?
• What decisions would we make differently if we had perfect information?
• How can we hedge our bets most effectively?

Fun shows with asshole philosophies

Two shows have been driving me crazy lately... they are #Game of Thrones and #The Walking Dead.

They drive me crazy because I really want to like both of them.  I like Zombie/post-apocalypse stuff and I like the Medieval/fantasy stuff.  These are two shows that are made for grown-ups, have legs and are about things I like in my entertainment.  But they both frustrate the living hell out of me, and I think I know why.

They're both made by assholes.

For example, let's talk about the philosophy in The Walking Dead.  Or better yet, read this Cracked article that does.

Let's talk about the philosophy in Game of Thrones... I'm not even sure there is one.  It seems more like just a mysognyistic hate-fueled fan-fiction written by a miserable person out to punish everybody except Samuel Tarly.  Which isn't surprising from this guy:

For cripe's sake, just look at the guy.

Which brings me to my point.

Immersing yourself in literature is a sense of immersing yourself in the philosophy of the author.  It is actually very intellectually exposed because --as the reader--you let your guard down.  The lessons and morals of the story slide through unexplored by your rational mind because they come through the activities and repercussions that the characters face.  We rarely think through what the lesson is, and whether or not it is valid.

So why the hell are we watching so many shows that have such terrible philosophies?  Why are people who are clearly assholes making so much of our entertainment?

enjoying life

One of the most enjoyable states of being is "flow"... when a person is doing something he's good at.
Flow feels natural, as time effortless slides by, accompanied by a satisfied feeling of competence.
Flow only happens when a) you're good at something and b) you're doing it

therefore, if you want to enjoy your day, get good at some things you can do every day, and do them every day.

Stuff you should always know about your business

There are the things that any business leader should know about his/her business.  If this information isn't available to you, right off the top of your head, you need to memorize it ASAP:

PNL

Current / Historical

1. ASPs
2. Margins
3. Spending trends

Proforma

1. Forward Looking Financials
2. Impacts of risks/opportunities
1. Top 3 risks
2. Top 3 opportunities

Investment Profile

1. Spending by year
2. Headcount by location by job type
3. BTI and details about why

Business Value

1. NPV
2. Sensitivity / Tornadoes
3. Top 3 risks/opportunities

Customer Forecasts

1. Volume and revenue
2. Probability of win
3. Ranges on estimates

A platform for a fantasy political party

In no particular order:

Enforce property rights

This includes enforcing contracts, protecting personal property, etc.

Protect the commons

If there are problems of externalities, the government should step in.  The environment, for example.  We all suffer when the environment declines but we're not the people screwing it up.  Make sure that mining operations set aside enough for clean up.  Make sure that lumber operations preserve the forests.  Make sure that farming doesn't create some monocultural wasteland.

Build infrastructure

Protecting the commons is about preventing destruction of common resources.  Building infrastructure is the logical counterpart.  Where everybody benefits but nobody can afford it, the government should build it.  This includes roads, water services, public transportation, IT infrastructure, etc.  How to determine what fits as a positive ROI investment is up for debate.

Break down agency problems

Make sure that people who can reap the benefits of risk-taking are subject to the negative repercussions.  Never let individuals or institutions take risks that they can't absorb themselves.  Make sure that people pay for the wrongs they commit and try to make sure they benefit from the good they do.

Stay out of people's personal lives

The government has no business mandating private issues when they are kept private.  "Private" means that people who don't like what is happening aren't subjected to it against their will.  Religious observation is naturally private.  Sexual orientation is private.  Marriage, the arts, parenting style, recreational activities, etc. are all private as long as the participants are all consenting (and legally able to consent).

First Post

I have no idea if I'll keep going with this, but all things start somewhere.  I am working in the field of corporate decision-making, decision analysis and finance.  My current focus area is portfolio analysis.

The traditional approach to corporate decision finance is to forecast a series of numbers for revenue, costs of sales, research and development and capital spending and then discount those cash flows to come up with an NPV for the project.  Those projects are put in NPV order and a line is drawn when the business runs out of budget.

This approach leaves a lot to be desired.  For one thing, forecasting is hard.  Point estimates of just about anything in the future are likely to be wrong.  We can solve some of that problem by using range estimates and Monte Carlo analysis.  We still need good range estimates, however, and that means relying on either historical regression or experts (or both).  Each of these have their own short-comings, and techniques for compensating for them.

Another problem with this traditional approach is the shortcoming of the NPV approach itself.  A simple thought experiment helps to highlight this:

Imagine a collection of projects:

Project 1: NPV 100, spending 30
Project 2: NPV 70, spending 15
Project 3: NPV 55, spending 10
Project 4: NPV 50, spending 10
Project 5: NPV 45, spending 9
Project 6: NPV 40, spending 8
Project 7: NPV 35, spending 7

If we have a budget of 45, the traditional approach would recommend the top two projects (the highest two NPV projects) for a total NPV of 170.
There are other recommendations that make better sense.  If we instead recommended the bottom five projects, we would also spend 45, but would have a total NPV of 175.

The real world is far more complex than even this.  Unlike a portfolio of financial assets, most business projects have complex interrelationships with one another.  Most businesses have synergies between their different units and add incremental projects to their portfolio of activities because they may have indirect benefits to other projects.  For example, a company that offers a complete suite of personal efficiency software will find that each individual product sells better as part of the whole than any part would if they only offered one or two products (network effects, bundling).  Another example is the idea of cannibalization.

Big businesses often have organizations dedicated to R&D.  These groups develop new technology and create the building blocks that other divisions might bring to market.  Often these building blocks have complicated relationships with one another and with the products that they go into.  Valuing these sorts of efforts from a financial decision-making approach has traditionally been accomplished by doing some sort of allocation or amortization of the spending to the child products.  This approach is inferior, and leads to wrong answers.

I have been working on a new approach to corporate financial decision-making.  In the upcoming weeks I will explore this approach on this blog (or at least try to as time permits).  I plan on skipping subjects that are extensively discussed elsewhere, such as the basics of finance, economics and strategy.  I will write about the fundamental elements of financial analysis, a bit about real options and incremental value and some about biases and heuristics.  I'll write a lot about portfolio and portfolio valuation and decision-making.