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Home » Business And Finance Articles » Your Choice Of Focus Makes A Big Difference In Accomplishing 20 Times As Much

Your Choice of Focus Makes a Big Difference in Accomplishing 20 Times as Much

Many people choose what to work on solely based on their enthusiasm for the subject. For example, salespeople may feel more energized by redesigning the compensation system than they do by finding more leads. Why? The compensation system shift can increase their pay from the current effort. There's no necessary connection between finding more leads and any personal benefit. But in an organization that has too few leads, finding lots of good leads could create more compensation gains than changing the compensation system. You have to watch out for what will help you achieve the most at an individual level before picking a 2,000 percent solution focus.

The same problem applies to entire organizations. Leaders need to fully consider potential benefits before selecting a focus as well. Let's consider an example of how the choice of creating a 2,000 percent solution can make a large positive or negative difference for an organization. In Apple Computer's early days, the organization set its focus on having a superior operating system and user features that would make it very appealing to do advanced computing on an Apple Macintosh. For many years after the IBM PC standard was set, users consistently reported preferences for Apple's offerings. The only aspect where the PC standard did well compared to Apple was in having more application software available for PCs. Microsoft was a much smaller company at the same time, and also had an objective of providing a superior operating system for personal computers. Microsoft focused its attention on improving its software and the frequency of upgrades in creating its 2,000 percent solutions for its computer users. Apple continued to work on all aspects of computing that affected its hardware or software. If Apple instead had selected the Microsoft focus, Apple could have chosen to make its proprietary operating system work on the PC standard as well. Microsoft would have continued to do well on IBM-built personal computers, but Apple could have gained leadership with most of the clone PC makers who soon dominated the market. If successful in that focus, Apple would now be the world's most valuable company and would probably have stopped providing its own computing hardware.

As you can see from this example, it's important for organizations to think about the benefits that current customers and stakeholders receive. But it's even more important to think about the benefits that potential stakeholders will obtain as well. In addition, how will your change affect the competitive balance in the market place? Can you, like Apple might have, cut off a powerful future competitor by concentrating your focus where it will do you the most good?

Copyright 2007 Donald W. Mitchell, All Rights Reserved

And here is another random article you might be interested in...

Find a Methodology and Minimize Investment Madness

There are many reasons to be investing these days, and too much opportunity to not have your money working for you.

However, I believe the majority of people dread having to deal with investment matters, and tend to jump into purchases and then hold their breath hoping for the best. After a long day at work and taking care of the family, it's hard to get excited about reading up on your 401(k) options, Morningstar ratings and fund performances.

If this sounds like you, there are basically 3 choices.

You can have your investments professionally managed, you can continue as you have in the past & keep your fingers crossed, or you can find a methodology that objectifies the investing process (that's buying and selling investments) and helps you maximize your long-term results.

To determine if you need help managing your investments(and this doesn't necessarily mean having to pay for advice) you might want to ask yourself these questions:

=> Do I really have the time and interest to follow the market closely on a daily basis?

=> Have I done well in the past managing my own investments?

=> Do I really want to add another layer of work and responsibility onto an already busy schedule?

If you're like most people, you would answer yes to some and no to others, so how do you decide? If you think you could have or should have done better with your investments, then you need some help. Don't feel bad. Having counseled hundreds of people over the past 15 years I can honestly say that everybody needs some help, whether they are aware of it or not.

Why? This could come as a surprise, but, in fact, your financial life is a lot shorter than your physical life?

Most people who end up investing don't really start working and making money until they are about 25 years old. Considering the average retirement age of 65, this gives you only 40 years to save and invest wisely.

If you make a poor investment decision, such as trying to stay fully invested during a bear market, you could lose big both in terms of diminished dollars and wasted time.

To drive home this important point, let me give you an actual example involving my own portfolio. For ease of illustration I have adjusted the beginning portfolio balance to $10,000.

During the period from 1/25/91 to 10/13/00 my $10,000 investment grew to $37,840, which is a 14.67% compounded annual return.

On 10/13/00, based on a methodology I was following, I liquidated all of my domestic mutual fund positions and moved 100% to the safety of my money market account. Thanks to this move, my portfolio retained 100% of its value on that date.

As we now know with hindsight, most people held on to their investment positions and have so far lost on average 50% to 60% of the value of their portfolios. For this example let us use 50%.

If I had held onto my position, my portfolio would be down to $18,920. Last time I hit that level on the way up was in 1995.

In other words, not only would I have lost 50% of my portfolio I would have lost even more by having used up 20% (8 years) of my total financial life.

How can you avoid mistakes like that in the future? Spend a little of your valuable research time looking for investment methodologies that allow you to side-step bear markets and let you move back in during bull markets. In other words, invest your time looking at methodologies instead of investments themselves. This will lay the foundation for more effective use of your money and time.

If you find a methodology that you like, and it matches your investment philosophy, stick with it for the long term. It should have the aspect of telling you when to get out of, as well as when to get into, an investment.

I suggest you follow these broad guidelines:

• Don't be afraid to take a small loss to avoid bigger disasters.
• Stay away from commissioned sales people (because they have incentives other than your best interests), and if you use an advisor, be sure he or she is fee based.
• Above all, don't get overwhelmed by news, rumors and predictions that are irrelevant to your strategy.

If you take this advice, I guarantee that pretty soon sleepless nights will be a thing of the past and you'll be on your way to more confidently and successfully (that means profitably) managing your investments.