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Quiz results

You should read this page only after taking the over-confidence test. 

If you want to do this in the recommended order, start here (to read about how the quiz works)

 You can jump straight to the quiz:

  http://tim-richardson.net/misc/estimation_quiz.html

Choose "read more" when you are ready.

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A WSJ article, "How to Tap IT's Hidden Potential" (March 10, 2008) was widely circulated and discussed.

I summarise the article into a few key points:

The problem

  • "IT decisions are often made by the wrong people with insufficient input, and the resulting failures drive a wedge between senior managers and their IT colleagues."
  • The reality today, though, is that CEOs can't ignore IT and expect to succeed. Technology has accelerated the pace of change in business, making it crucial for companies to detect, assess and respond to every opportunity and every threat as quickly and as effectively as possible. And that kind of agility can only be achieved by fully embracing the operational and strategic importance of IT

The solution

 Begin with IT literacy -- and commitment -- at the top. The impetus for effective IT management must come from the CEO and the board. There has to be a willingness on the part of the CEO and the other executives to know enough about IT to understand its functions and its value to the company, in the same way that they understand accounting, finance and marketing.

 Create demand pull for IT solutions. Managers at all levels across the organization need to be convinced that innovations in IT-related areas such as knowledge management, business intelligence, information security, change management and process integration are essential to the success of the enterprise.

Subject IT spending to the same decison making analysis as other investments. Understand the business case. Evaluate costs, risks and benefits of projects.
 

 

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I'm a commerically focused finance leader rather than a conservative "dot the Is and cross the Ts" accountant. And like many colleagues in Europe and the US, I've spent a lot of time dealing with S404 Sarbanes Oxley compliance, where senior management needs to sign off on the existence of business controls. The consequence is that you need a huge system documenting line managers proving that they have detailed controls at every level of management. Initially, it seemed completely ridiculous. However, it's not all bad.

Firstly, on a personal note: the defining moment that caused me to move into finance was not a turnaround or a big investment. It was basic business controls. I went to Indonesia in the days of the Tiger Economy boom. Business was growing fast, deals were being made, parties were being had and Jakarta was full of expats, money, long nights and gorgeous girls. I was doing post-implementation work with MFG/PRO, reporting to the Finance Director (an austere Dutchman from the northern protestant provinces). He had an internal audit report that was critical about the management of credit risk to our customers, although there were actually no indications of credit problems in an environment of 20% growth. However, we sat down and went through the customers, updating credit ratings, liens, mortgages and bank guarantees necessary. To some customers we said goodbye. Sales management was puzzled. 

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Chess is strongly associated with strategy and mental superiority. Can basic players having friendly one-move-per-day games learn deeper lessons from the game, or does it just make them look smart?

People associate chess with geniuses like Gary Kasparov. His chess is certainly not my chess. I don't memorise openings,  I struggle to see even a few moves into the future, and I am often surprised by my opponent's next move.  Oddly enough, this makes chess for me much more like real-life than it would ever be for a grandmaster.

Here are three lessons a basic player can apply to chess and business.

Lesson 1: Time, Chess and Peter Drucker

Lesson 2:  Competition's moves

Lesson 3:  Investment

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In this article, Exploding Myths, a Yahoo Finance columnist, Julia Lee, seeks to "explode" the myth of index funds. Her recommendation is to buy into value, because index funds only work in a world where the Efficient Market Hypothesis (EMH) is perfectly true. In fact, she holds the EMF to be mythical, and therefore index funds are mythical. She points out that Warren Buffet does not believe in the Efficient Market Hypothesis. He probably doesn't. No one believes the EMH is literally true (I'll get back to this)

One of the more annoying things about Ms Lee's article is that Warren Buffett has consistently recommended that ordinary investors should choose index funds, easily verified by google "Warren Buffet index funds". I did not know that he had endorsed index funds, but he is such a sensible person and index funds are such a sensible idea that his endorsement of them seemed extremely likely. My first google search proved the point very quickly. I don't much of Ms Lee's name dropping; my cross-examination of Mr Buffett would be embarassing for the prosecution, I think.

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