Monthly Archives: April 2008

Why Smart People Underperform

Why Smart People Underperform

We’re asking so much of team members on such a regular basis that it is now creating a recognized disorder, ADT – Attention Deficit Trait. Characterized by unfocused and unproductive activities, it reflects an increasingly overwhelmed workforce.

The branes take? Consider the Sharpen and Shed ™ process. Times may be more intense in terms of data flow and speed, but in many ways things are still the same as decades ago when management guru Peter Drucker declared that our jobs, as managers of ourselves and our company’s future, must cut through the clutter. We must define that 10% – 20% that will make 90% of the difference. And then, as Drucker said, it’s probably more about what you need to stop doing than what you need to start.

“We know that the best predictor of human happiness is human relationships and the amount of time that people spend with family and friends.

We know that it’s significantly more important than money and somewhat more important than health. That’s what the data shows. The interesting thing is that people will sacrifice social relationships to get other things that won’t make them as happy — money.”

Happy faceProfessor Happiness, Harvard social psychologist Daniel Gilbert from an interview in the New York Times

Dan Gilbert directs a laboratory studying the nature of human happiness

Make A Profit On Stocks Today? It’s Just Your Hormones…

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Hundred Thousand Dollar Bill - Woodrow Wilson

Scientists at Cambridge University wondered to what extent hormones might influence investment decisions, so during a week full of earnings and government reports they studied testosterone and cortisol levels for “noise traders” at a major London brokerage firm to determine the extent to which they correlated to trading activities and results. Noise traders profit from market “noise” or disequilibriums, making even seconds-long trades to take advantage of small variations in stock prices. Their trades risked up to $2 billion at a time.

The scientists wanted to know whether testosterone and cortisol may contribute to the irrational bubbles and busts of market behavior.

According to an April 18th WSJ article (subscription may be required), researchers wanted to determine the extent of, “…the ‘winner’s effect,’ in which successive victories boost levels of testosterone higher and higher, until the winner is drunk with success — so overconfident that he can no longer think clearly, assess risk properly or make sound decisions.

‘I wondered whether the same thing was happening on Wall Street,’ said Dr. Coates. Too much testosterone might make traders foolishly overconfident, exaggerating a market’s rise. Too much cortisol, secreted in response to stress, might in turn make them overly shy of risk, making a market’s downward slide even more precipitous.”

The results: 82% of traders with high morning testerone levels made more money than usual. And those with high cortisol (stress) levels did not fare as well. “We actually think this molecule (testosterone) is destabilizing risk-taking,” Dr. Coates said, “rather than optimizing it.”

Count Your Blessings

Count Your Blessings

Does counting your blessings really make you any happier? According to this dual study in India and the United States, it will not only improve your basic level of happiness, it will improve your health. So start your diary of daily delights.

Do Humans Really Behave Like Mice?

Do Humans Really Behave Like Mice?

 Now that earnings announcements are upon us and earnings generally aren’t very good, it’s a good time to ask: Do those ever-ballooning executive bonuses actually help shareholders get a better return for their money? Do we really scurry after monetary rewards like mice after cheese? And if so, how does such a singular focus on money affect our performance. 

These studies by Dan Ariely and colleagues in the US and India imply a surprising conclusion. Would you believe those big pay-outs actually hurt performance? Perhaps even more interestingly, what is the implication — not just for corporate CEOs, but for professional sports players?

A person with one bee sting is highly motivated to get it treated. But a person with multiple bee stings does not have much incentive to get one sting treated, because the others will still throb. The more of a painful or undesirable thing one has (i.e. the poorer one is) the less likely one is to do anything about any one problem. Poverty is less a matter of having few goods than having lots of problems.
Poverty and wealth, by this logic, don’t just fall along a continuum the way hot and cold or short and tall do. They are instead fundamentally different experiences, each working on the human psyche in its own way. At some point between the two, people stop thinking in terms of goods and start thinking in terms of problems, and that shift has enormous consequences.

Charles Karelis, author of “The Persistence of Poverty: Why the Economics of the Well-Off Can’t Help the Poor,” philosopher and former president of Colgate University as quoted in the Boston Globe article, ”The Sting of Poverty”

You Didn’t Notice?

You Didn’t Notice?

Have you ever failed to notice a friend’s or co-worker’s new car, haircut, or loss of a few pounds? Or missed that shooting star while seemingly looking at the same patch of sky as your companion? Why do eye witnesses often have differing accounts?

Of what we look at, how much do we really see? Check out this NY Times article, Change Blindness, to learn more about what you’re really seeing.