How Good is Your Memory?

How good is your memory?

As the saying goes… “I’m not getting any younger.” Those of us who have reached middle age, or passed it, tend to use this phrase or ones like it to help ourselves accept some of “the realities” of aging. Complaints about memory typically top the list along with endurance and energy.

Let’s turn this memory idea on its head. Sometimes not having a good memory IS an advantage.

Here’s an example from basketball. Charles Barkley, one of my basketball heroes once described the difference between a good player and a great player using memory.  According to Charles, the great player has a poor memory.

Here’s the logic:  When the good player plays a poor game (low points, errors, turnovers, etc.) he typically plays poorly for the next game or two before he hits his stride again. When a great player plays a poor game, he forgets about it and hits his stride again in the very next game. He has a poor memory of his weak performance and a rapid recovery rate to greatness.

Take Action

What does this have to do with business and organizational development?  Well, as leaders we have “poor games” from time to time too. Studies have shown that one of the predictors of successful leaders is their willingness to make decisions. Even when the decisions they make are bad decisions, managers who are prone to take action and make decisions are statistically more successful than those who tend to wait and make fewer decisions.

Get Better at Forgetting

It is important to feel pain when we make poor decision and mistakes, but it is also important to quickly let go and “forget” the emotion while remembering the facts and circumstances and capturing the lesson.

Leaders who have too good of a memory of all of the things that went wrong and hold on to all of the pain that resulted from it have the likelihood of becoming slow to react. They may find themselves bulwarking against phantom scenarios based on past unpleasant emotions rather than responding to the specific situation and circumstances in front of them in the present moment.

Re-Direct Sooner

A corollary of this principle is to avoid getting caught up spending too much time focusing on and criticizing what is going wrong. Instead, once we identify what is going wrong we would be better served to focus on moving to action in the direction the organization needs to go.

The Formula

The formula is actually quite simple—Take Action, Learn (the lesson), Forget (the unpleasant emotion), Take Action.

Admittedly, whether you are developing yourself or developing others each of these steps requires a significant investment in time, money, and energy. We can’t develop courage,  self-awareness, active listening, humility, flexibility, tenacity, and (add your favorite leadership characteristics here) overnight.

The payoff is in the emergence of the “great” leader who makes good decisions and recovers from bad ones rapidly.

I agree with Charles Barkley. In this arena, we’d be better served with a shorter memory and an eagerness for action.

Paul Billimoria
HRG, Inc.

Have you developed your sixth man/woman?
The Challenge of Developing Internal Leaders

The Sixth Man
All of us are familiar with Leadership Development, Talent Management, Bench Strength, and Succession Planning as good business practices. These are not novel ideas, yet most companies do less than half as well as they should in the development of internal leaders. Why?

Facing my demise
For some of us it is like writing a will or buying life insurance—sensible behavior we avoid because of implications we don’t want to face.

The enough time fallacy
“We’re totally slammed as it is, we don’t have additional time to spend on this.”

Imagine the head coach of a NBA team informing the ownership that although they are paying twelve players on the active roster he only has enough time to focus on the development of the five starters. They really need 100% of the coach’s time if they are going to make the playoffs. Besides all of them are relatively young and in good health, it’s highly unlikely any of them will get sick or injured this season.

The Jack factor

Then there’s what I like to call the Jack factor—based on an engineer I once worked with named Jack (not his real name). Jack didn’t want anyone to know jack (pun duly intended). He was the closest thing I have seen to a covert operative working in his own job. He didn’t want you to know him, or what he did and was very resistant to training anyone. When I questioned Jack about his behavior he proudly replied “It’s my strategy for job security. If no one else knows how to do my job you’ll never be able to replace me with a less expensive person.” The last time I checked, Jack was still in his dead end job doing remarkably well at holding back his own career as well as the ability of his organization to grow.

In order for the development of internal leaders to be effective in an organization:

  1. The commitment to the program needs to be firmly rooted in the corporate culture and endorsed and acted upon by the top leadership.
  2. Establish a plan with milestones and select a passionate champion to lead the effort (similar to the implementation of a quality system).
  3. Authorize time, money, and resources and make it part of the performance evaluation process.

Does the development of internal leaders create more work, stress, and discomfort for the incumbents responsible for developing their staff? Most likely yes.

Does it raise expectations for additional responsibilities and higher salaries for the individuals being developed? Most definitely.

It is a challenging process. If this was easy we’d be better at it.

James Harden of the Oklahoma Thunder received this year’s sixth man of the year award from the NBA. Here’s to your sixth men and women.

Paul Billimoria
HRG, Inc.

Better Than a Coin Flip

Heads or tails, right or wrong, correct or incorrect. We look at so many things in life with this mentality, lumping all possible outcomes into two opposing categories.

The Romans were some of the first to solidify this concept with the flipping of a coin. They called it “navia aut caput,” ship or head, due to some of the coins having a ship on one side and the emperor’s head on the other.

Some of the most famous coin flips have very interesting back-stories and outcomes. Buddy Holly flipped a coin when his bus broke down and he had to decide whether to take a small plane out of Iowa during a storm, and we all know how that one turned out. The founders of Portland, Oregon, flipped a coin to settle their dispute between naming it Portland or Boston. Even the Wright brothers flipped a coin to see who got the first shot at flying. Ironically it was the second flight, by Wilbur’s brother Orville, which made the history books as the first official powered flight.

I, like most others, have been guilty of this polarized way of thinking many times. One day I realized how limiting this approach is, and that there are a multitude of shades of grey in between.

My ‘aha’ moment of realization, where for a brief instant I felt as if I had come close to enlightenment after sitting under a Bodhi tree, came when I used predictive analytics for the first time. Up until that point most of the statistical analysis I had done involved studying correlation values among many variables, fairly basic by most standards. All my education on the subject to that point had been about analyzing the recent past, and making a guess as to how that might affect things in the near future, i.e. a moving average forecast. It’s a very simple method that is not very accurate, yet it is still widely used by many businesses today. Most businesses engage in this type of rear view driving when looking to the future, with good reason. You need to look at the past because what happened there will often set the trajectory for the future. But it doesn’t go far enough.

The first predictive model I created was designed to forecast unit sales of a retail product based on economic and demographic data. I had my equations, dependent variables, historical company data and I was all set to go fortune telling. As I finished making the model, I compared the sales forecasts that I had generated against the company’s actual sales and saw that almost all of them were within a few percentage points, save for a couple of outliers.

The model predicted 90% of the variability in the retail sales variable a year forward, while the historical trending model had an absolute margin of error nearing 40% within a few months of current.

I realized that my model and my predictions, while not perfect, were able to deliver insightful and accurate forecasts to the company, much more so than their traditional method of a moving average forecast that left much to be desired due to its large built-in margin of error. Even the couple of forecasts that were off by a lot ended up being just as insightful to the folks in charge of the company. They were able to identify why their sales deviated so greatly during those years.

Why were the inferential statistics so much more valuable than the trending data?

In brief, a moving average forecast assumes a linear relationship between time and the change in the value you are interested in. Once you reach the present, the line going through the past data is projected forward, with a hefty positive and negative margin of error. This method of projecting forward by looking to the past is a proverbial flip of a coin, because there is as yet no knowledge of why the trend was as it was. Businesses and company leaders can do far better.

With predictive modeling we find the relationship between the dependent variable (the metric the company wishes to predict) and the independent variables from prior years which may be leading indicators.

If you can identify the correlated variables, the result is a statistical equation where you can plug in data from one year (for example) and get a prediction for subsequent years, with much greater accuracy because the variables actually co-vary together and you don’t rely on the assumptions built into a linear analysis. This is an anti-coin flip because there is so much more information gleaned from the analysis of past data. It’s like seeing an old time TV show in Technicolor with special effects.

In these volatile, turbulent, and uncertain economic times, where yesterday’s gains are quickly mitigated by today’s losses, history is not the guide it once was. The old method of looking back to see where you are going is being replaced by predictive analytics.

Companies can settle for the flip of a coin that leaves a lot of insight unused, or they can choose a method that looks at all the possible relationships for a better and more in-depth understanding of the factors that drive their important decisions. Business analytics can be used to measure, evaluate, understand, and predict almost anything, so why flip that coin?

Evan Loker, MBA
Director of Analytics
HRG, Inc.