Wednesday, March 18, 2009

Management by Walking Around - Michael Newcombe

Excellent article from Peter Bregman highlighting the management style of Michael Newcombe, general manager of Four Seasons. Many will read the article and immediately scream...that's micromanaging. Believing this style to be a bad thing. Most likely due to the fact that it involves actual work. Ha ha.

But, I'm a big big believer in the practice of management by walking around. In many ways, its the most efficient means of gathering information.

It also shines the light on areas in the organization that are traditionally kept in the dark. And bridges communication gaps between areas that most believe are independent of one another.

Perhaps the greatest impact of management by walking around is organizational change. Mr. Bregman's website says it best:
"Experience shows that an organization can spend five years implementing a "change" program - and it usually takes people five days (or less) to find a way around it and do things the way they always did."

"Organizational change is a lagging indicator of personal change. When enough people in an organization begin to do things differently, the organization changes. And personal change happens not because people are told to change. Not because they are trained to change. Not even because they are motivated to change. People change because they choose to change."
How do people choose to change? The majority of changes occurs from a negative experience. Or better yet...a person chooses to avoid change in fear of a negative experience. This is where management by walking around comes into play. Or can come into play. I've actually seen the practice where management by walking around can increase those fears. But, done right...actually shines the light into areas most people fear. Enabling people with new approaches to difficult problems.

Side note, have you seen the new Dave Robicheaux movie starring Tommie Lee Jones, In the Electric Mist? Very good. I'm sure part of the enjoyment comes from the Louisiana setting...makes me long for the East Texas backwoods. Gotta get down there this summer and eat some crawfish. Oh, and don't miss the performance of Levon Helm in the movie. Not as good as the part he played in Shooter...but still noteworthy.

Later trades,


Monday, March 16, 2009

New Growth and Old Age

Good article from Philip Greenspun. I agree with the ideas, more or less. In particular, the notion that newer countries who have avoided regulation and older war-torn or economically devastated countries have the best chance for growth. Works much like companies and their IT departments. The larger the company and more bottleneck PM's they have, the slower the progression. Start-ups have nothing to protect, few ego entrenchers to go up against, and therefore progress faster. In theory, anyway.

These theories apply to us as well. As we get older we accept less risk...and therefore our growth rate slows. We have more hooks into us. People counting on us. And plus, we're OLD! ;-)


Sunday, March 08, 2009

Portfolio Performance for February 2009

February produced another all-time max drawdown in the portfolio. During times like this...logic rains I doing something wrong? How much more money will I lose to the market?

Another common logic trap is should I second guess my system? Should I take the next trade? A few weeks ago...I received several new signals...and I took every one of them only to see several of them hit their exit signals last week.

You want to change your rules...filter out times like difficult to watch your money be eaten away by the current market forces.

But, that is why you test your ideas so fully...both in good times and bad. So, you can continue to follow your system despite all the others washing away in this storm.

I'm sure there will be more weeks if not months that I buy stocks only to sell them weeks later. As bad as it sounds to yours truly, more months of drawdown. But, I have accepted this fate. I have accepted these circumstances because I have tested every ounce of my ideas in every market I can imagine...and I agreed to the results.

And when the storm is over...and everyone is afraid to buy system will continue to generate signals of stocks to buy. And I will buy them. And follow the market wherever it leads despite how difficult that may be.

Later Trades,