Principle of Retrospective Rationality

Principle of Retrospective Rationality

and Effective Market Analysis

Stay calm under pressure: usually, working situations involve pressure and stress. In such situations it is necessary to maintain a positive attitude. If not, your colleagues will perceive your anxiety. Staying calm under pressure also is the basis of good management.

Psychologists call it the principle of retrospective rationality. Your brain likes to believe that you’re behaving in a fashion that is consistent with your beliefs. So if you start behaving as a confident person, your brain tries to explain your behavior by forcing your mind to believe you are a confident person (Rob Yeung, Confidence, The Art of Getting Whatever You want).

However, preparation is crucial to success in business, and there is nothing more damaging to your credibility as a commercial partner than being unprepared. Conversely, being prepared has many benefits, including enhancing your understanding and enabling you to be more effective making you appear more professional.

You can move quickly if you do the background work first, which no one usually sees. You prepare yourself thoroughly, and then when it is time to move ahead, you are ready to sprint.

If you are confident and prepared, the trust that other people have in you, will be increased.

The first thing you should prepare for is an understanding of the market: your research should include the overall industry (is it growing or shrinking, what are the main challenges); the primary players (the key companies); which sector is most suited to your services (banking, legal, engineering, etc.); what executives are the most appropriate for you to target (Marketing Directors, etc.). Understand the overall market will make you much more useful and convincing to your clients.

You only have to do a very few things right in your life, so long as you don’t do too many things wrong (Warren Buffett). Photo: Megan Jorgensen

To complete an effective market analysis, you can follow three phases:

• Desk-based research on Internet and in libraries. You’ll understand everything about a particular topic and you’ll come up with certain ideas about your potential market.
• Validation of findings through real situations: Test the ideas you developed from your desk research by interviewing real people. Ask them their views on your hypotheses.
• Conclusions: upgrade your desk-research with the extra information from the interviews, fine-tune the ideas and make conclusions.

Conduct company research

Before approaching suitable executives of a company, research the company, paying particular interest to the following:

• Company history, mission, branding, values announced
• Services the company offers, the business it performs, what makes it unique
• Annual accounts – if they are available – are particularly helpful in providing information on the company strategy and plans
• Competitors, one of the key areas of concern for your client companies, influencing their positioning in the market and their strategy.
• Executives whose profiles can be understood through Linkedin profiles or corporate news pieces. Understanding their biographies will influence how you position your services and help you build rapport and establish a good working relationship with them.

Rehearse your pitch

Think of any connection you have had with the executives’ biographies. You may have lived in the same city at some point or perhaps you worked at a competitor company in the past. Consider the particular pressures associated with their role in the enterprise (managing director: improving the profit and loss statement, expanding into new areas, increasing penetration of core business, meeting shareholder expectations; marketing director: finding cost-effective advertising, increasing revenues, measuring the impact of campaigns; human resources director: attracting, selecting and retaining employees, implementing effective processes, improving employee engagement, preventing legal disputes).

P-zed

P-zeds

Quantum Night

By Robert J. Sawyer

“Okay,” I said, looking out at my first year psych class, “how many of you drive to the university each morning?”

About a third of the students put up hands.

“Keep your hands up. The rest of you: How many of you have had a job you've driven to day after day?”

Another third raised hands.

“Okay, now keep your hands up if this has has ever happened. To you: you arrive at your destinations – school, work, whatever – and have no recollection of the actual drive.”

Most of the hands stayed in the air.

“Cool,” I said. “Lower your hands. Now, think about that: you undertook a complex task; you operated a vehicle weighing over a thousand kilos, you negotiated traffic, you avoided collisions, you obeyed signs and the rules of the road – you did all that without high-level conscious attention; that is, you did it while your mind was on other things.

“Let's try another one: how many of you have ever been reading a book – not one of mine, you understand, but somebody else's – and gotten to the bottom of a page and realized you had no awareness of what the page said"?

Again, lots of hand went up.

Philosopher's Zombie. Photo by Elena.

“Okay, you might argue that driving a car is an example of what laypeople call muscle memory, although the technical term is “procedural memory” - stuff you do without thinking about it, like returning a serve in tennis or playing a musical instrument. But what about the reading example? Your eyes tracked across successive line, and, on some, level, your brain was presumably recognizing and processing the words. In fact, you can contrive priming tests to demonstrate that the words were noted. If the page referenced, say, a porcupine, and you're asked, even though your mind wandered off while reading so you say you have no high-level conscious recollection of the page, to name a mammal, chances are you'll say “porcupine.” So, reading can't be dismissed as just muscle memory, just your eyes tracking without actually seeing. And yet you can do it, too, without real attention.”

I let that sink in for a moment, then went on. “So, it's clearly true that you can perform sophisticated acts without your full conscious attention some of the time. And, by logical extension, if you can do those things that way some of the time, then it's presumably possible there are people who do them that way all of the time. Of course, we'd have no way to tell, would we? When you're reading but not absorbing, nobody can tell that from the outside. And when you're driving but not paying attention, again, well, if the police had a way of detecting that by some external sign – your eyeballs rolling up into your skill, say – you can bet they'd pull you over. But there is no external indication.”

I took a sip from the coffee cup on the lectern, then went on. “And that brings us to one of the most famous thought experiments in philosophy. Imagine a being who didn't just drive all the time without paying attention, and who didn't just read all the time without paying attention, but who in fact did everything all the time without attention. An Australian philosopher, David Chalmers, is the guy most associated with this proposal. He says it's logically coherent – that is, there are no internal contradictions – to the notion that a whole planet could exist full of such entities: being for whom the lights are on but nobody's home, being who are, quite literally, thoughtless.” Another sip, then: “Anybody got a suggestion for what we should call such creatures?”

I was always happy to set that one up, and my students never disappointed. “Politicians!” called out one. “Football players,” called another.

“Well,” I said, “almost anything would be an improvement over the term we actually use. Such beings are called “philosophical zombies. Or “philosopher's zombies.” It's a terrible name: they're not the walking dead, they don't shamble along. Behaviorally, they're indistinguishable from the rest of us. Sadly, the phrasing “philosophical zombie” is more common in the literature than “philosopher's zombie,” but it doesn't make sense: the one thing such creatures are unlikely to be is philosophical. Oh, they might say things a philosopher would - “A could well follow from B,” or “Yes, but how can we be sure your experience of red is the same as my experience of red?” or “Would you like fries with that?” - but they'd only be acting like a philosopher. There would in fact be no inner life, no rumination. Me, I mostly avoid the zombie word. In the States, they can't really abbreviate “philosopher's zombie” to its initials because it comes out sounding like "peasy,” as in “easy-peasy”/ But here we can safely call them p-zeds, so let's do that from now on.”

One of the students, a muscular guy named Enzo, raised his hand. “Well, then Professor Marchuk, if all that's true – if it really is possible – then how do we know you're not a p-zed?

“How indeed?” I replied, smiling beatifically at them all.

Disability Insurance

Disability Insurance

Disability insurance may be the most important kind of insurance to have. Indeed, during the peak-earning years of your career, the possibility of suffering a long-term disability is considerably greater than the possibility of death. The Society of Actuaries says that a 35-year-old is three times likelier to become disabled for three months before reaching 65 than he is to die younger than 65.

How much you need?

You can figure out how much disabilit insurance you need in the same way that you calculated your life insurance needs. Take your annual expenses and subtract your familyès annual income without your salary. Buy as much disability insurance up to that level as you can. Generally, insurers will sell you only enough insurance to replace 60 percent of your income, so that, they say, you will have an incentive to return to work.

What your options are?

The cost of disability income insurance depends on factors like your age, your profession, the amount of time you’ve worked or owned your business, whether you smoke and, more recently, whether you’re a man or a woman. Since women file for disability benefits more often than men, many insurance companies have recently begun to raise women’s rates, while at the same time lowering the rates for men.

Disability is always sad. Photo by Elena

What to watch out for?

Look for a policy that can’t be canceled and has no increase in premium until you are 65. Get a cost-of-living adjustment provision, so that your benefits increase once a year for as long as you are disabled. You should also insist on a provision allowing you to boost your coverage as your income increases.

Pay particular attention to the definition of disability. Some insurers say you qualify for benefits if you are unable to do your job. Residual or partial disability benefits can be tacked on to provide a percentage of the amount due.

Fact File: How long we live?

The average American born in 1990 can expect to live more than 25 years longer than his ancestor born in 1900.

Life expectancy in years

Year born Male Female

1900          46.3     48.3

1910           48.4     51.8

1920           53.6     54.6

1930           58.1      61.6

1940           60.8     65.2

1950            65.6     71.1

1960            66.5     73.1

1970            67.1      74.7

1980            70.0     77.4

1990             71.8     78.8

Source: Life Insurance Fact Book, American Council of Life Insurance.

Business Success

Business Success

Businesses wishing to grow productively and lucratively may benefit from applying insights gained from the scholarly management perspective. In the cutthroat business environment, applying the insights gained from a management ideology may lead to flourishing mercantile intensification.

Business development is a scholastic subsystem of commerce studying market penetration and customer recruitment. Van Der Merwe (2002) writes that four pillars support Classical business development thought:

• Division of labour
• Scalar and functional processes
• Structure
• Span of control

Overtime, span of control and division of labour have been replaced by strategy and projects. Strategy can be further decomposed into analysis, preference and execution. Structure can be horizontal (flat) and vertical (tall), referring to chain of command echelons.

Project management refers to the directing, planning, monitoring, and organizing necessary for successful goal attainment. The five managerial tasks are:

• Set objectives
• Find ways to make them happen
• Think strategically
• Act decisively
• Evaluate results

Being open to change and able to adapt in the fast-paced, aggressively competitive international conditions is critical for continued achievement. Failure to adjust can prove catastrophic.

Management theories have concentrated on business processes and behavioural theory. The latter and industrial psychology share history. As ascertained by the Canadian Society for Industrial & Organizational Psychology (CSIOP), members come from both Psychology and Business faculties.

Lloria (2008) reviews knowledge management, appearance and quantification. Efficient software automates the managing assignment. Knowledge can be created through popular social media. Metric models of intellectual capital take care of measuring.

Happiness, contentment, enjoyment, pleasure, all these are praised elements in positive psychology. Also, a derivative expression is “happy as a clam at high tide, meaning extremely joyful. Are you happy? Image : © Megan Jorgensen.

Comparing the classic and the refined, Knowledge Management (KM) used to concentrate on how strategic business units stimulate production. Sequentially, the focus shifted to core competences being at the heart of product design. Lately, a certain gradual democratization of strategic learning has been observed.

Berends et al. (2007) clarify how New Business Development (NBD) reacts to Information Technology (IT) innovations. Working with KM may be the answer according to the author. Radical innovation is a tactic for some companies. The authors base their argument on evidence from three companies: DSM Venturing & Business Development, OGIR Group for Shell Global Solutions and Phillips Research.

Jarboe (2001) stresses the significance of tacit knowledge in economic development. The author defines social capital as the networking techniques by which tacit science is secured. Formal knowledge is as essential; literacy and numeracy are musts in today’s world. An evolving economy means a diversified set of skills, being able to weed out irrelevant from relevant information saves time and consequently lowers cost. Likewise, access to telecommunications infrastructure is imperative in an information economy.

References:

    Berends, H., Vanhaberbeke, W. & Kirschbaum, R. (2007). Knowledge management challenges in new business development. Journal of Engineering and Technology Management, 24 (4): 314-328.

    Jarboe, K. P. (2001). Knowledge management as an economic development strategy. Review of Economic Development: Literature and Practice, 7. U.S. Report prepared for Economic Development Administration, U.S. Department of Commerce.

    Lloria, B. M. (2008). A review of the main approaches to knowledge management. Knowledge Management Research & Practice, 6: 77-89.

    Van Der Merwe, A. P. (2002). Project management and business development: Integrating strategy, structure, processes and projects. International Journal of Project Management, 20 (5): 401-411.

Financial Institutions

Financial Institutions

The present short essay is an attempt to briefly survey important financial institutions on a global scale. Very broadly defined, a financial institution supplies financial services to its clients. A bank provides such services and is chartered by the respective government in that respect. Other similar word uses may refer to slightly different meanings such as the World Food Bank. The World Bank and IMF (International Monetary Fund) are prominent international business world players.

There is a distinction between commercial (for profit) and central banking. Individuals cannot open an account with the central bank, only the government; individuals must go to the commercial banks. Statistical tools and mathematical models greatly facilitate financial forecasting. Proficiency in the banking industry most often than not requires a thorough knowledge of the underlying numerical concepts. Central banks operate in most countries to ensure financial stability and avoid the bank panics and failures seen during the Great Depression. Many other organisations collectively make sure that the country’s financial health is well monitored.

In Canada, in addition to the central bank (the Bank of Canada), the Canadian Deposit Insurance Corporation (CDIC) protects patrons’ funds within certain conditions. The American counterpart is the Federal Deposit Insurance Corporation (FDIC). A skeptical point was raised by a good acquaintance of ours, in that if one of the big five banks were to fail, then the whether they needed protection or not would take second place to the disarray that would likely have engulfed the economy. Perhaps. But perhaps also, having the system in place prevents any such awful outcome, just as in the psychological construct of the self-fulfilling prophecy. Aside from major Canadian banks discussed at length elsewhere on the present Website, there are many insurance companies, trust funds and credit unions.

A deep financial will. Photo by Elena

Deutsche means German, in German, the official language of the European Union, Germany, Austria, Liechtenstein, Luxembourg, Belgium and one of the four official languages of Switzerland alongside Italian, French and Romansh. Before the European Union instituted one sole currency, the Euro, Germany used Deutsche marks. The German mark underlined reunification when it replaced the East German mark in 1990. The Deutsche Bank (NYSE: DB) is a massive institution with over 100,000 employees and more than 1,900 trillion in total assets as recorded in 2010. Germany’s central bank is the Deutsche Bundesbank.

If was one is fortunate enough to grace the streets of Montreal’s Old Port, then some of the most beautiful buildings there are the city’s banks. Given the prominent role that banks play in economic development, it is to be expected that those monuments would testify to that. Assuredly, aside from the breathtaking Notre-Dame Basilica, renovated in 2011, Old Montreal has much to offer in terms of architecture and sightseeing.