Don’t let sunk costs affect your choices

There is a concept I learnt from Finance: Sunk Cost. Sunk Costs are investment of time, energy and money that can’t be recovered once they’ve been made. No matter what you will do, you will not recover the sunk costs.
Even if this seems easy to understand, we often make our future decisions victims of the sunk cost fallacy. We continue to invest more time, energy and money in something that is not worth it, just because we already spent so much and these sunk costs affect our choices.

Instead all that matters is how much more investment is required versus the reward you expect to obtain.

I give you an example:

Time ago I’ve I booked a flight to London. It was one month before the departure. Some days before I didn’t feel very well so I decided to do not go. I might have taken the flight , but I thought that If I had gone to London, the additional investment in time, energy and money would have been much higher that the expected reward in enjoying the city. The reaction of my friends was: “Are you mad? You have already spent the money for the flight!”…  They were under the sunk cost fallacy. I knew that in my situation I wouldn’t have had a good time in London and I didn’t let the sunk costs affect my choice.

Unfortunately our life is full of examples of the sunk cost fallacy, we should recognize it and don’t let the sunk costs affect our choices.

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Do you know a leader that brougth out the best in you ?

“[…] Since 1970, I and my colleagues have been doing these studies where we try to
differentiate outstanding and effective managers from average and poor. And we can.

And we’ve done this in managers and leaders in public sector, private sector, non-profit, large, small in over 94 countries of the world, but if we look at the data sideways we come to a very
alarming observation. That about 50% of the people in management leadership position aren’t
adding value in anyone’s point of view.

Another 20 to 30% maybe adding value in one person’s point of view. That means that you could take 70 to 80% of the people in management jobs in your organization, out of their management
role, and the organization would function more smoothly. That’s a very sobering statistic.

And one of the things it means that the people that we’re exposed to most of the time, day to day, Aren’t very good at it, and yet, who do we try to emulate to fit in or do a good job? ”

– by Richard Boyatzis in “Inspiring Leadership through Emotional Intelligence” at Coursera.org

I just finished my personal MBA

I just finished reading the book “The personal MBA – master the art of business” of Josh Kaufman. I found it really interesting and well structured. You can use it as starting point for your curiosity and as a reference on the many concepts and principles around Business. Recommended reading for curious minds that understand that this a high-level overview.

“You wasted $150000 on an education you could have got for a buck fifty in late charges at the public library”
– Matt Damon as Will Hunting, Good Will Hunting.

Personality Test, Leadership and Management

“The most accurate personality type test you can find”.

It’s the phrase written today on a friend’s wall in facebook with the link to a personality test on Quistic.  Curious to see if it’s true I’ve decided to try it… the answer I received is this:

I’m an ENTJ.

It seems that each letter has a general meaning:
“Types that like making decisions (J’s) and types that keep their options open (P’s).
Types that like details (S’s) and types that look at the forest instead of the trees (N’s).
Types that choose based on emotion (F’s) and types choose based on logic (T’s)
Types that talk a lot because they think out loud (E’s) and types that talk less often because they think before they speak (I’s).”

The profile says that ENTJs are natural leaders. It’s not because I find cool to have received such answer (there are many other profiles and all have their strengths and weaknesses) but I find the answer quite accurate taking many points of my personality… Then I don’t think one person is exactly only one profile type and that all people can be resumed to the 16 profile types found on the site, but I’m not a psychologist…

From this result I started to think about leadership and management and how the first is different from the second. What are really leadership and management ? Not all managers are leaders, but a manager who is not a leader can be a good manager ?

For me it depends… it depends in which environment we are managing what and who. Today in the creative economy we speak about knowledge workers and I think being a good manager in such environment requires to be also a leader.


With the rise of the knowledge worker, “one does not ‘manage’ people,” Mr. Drucker wrote. “The task is to lead people. And the goal is to make productive the specific strengths and knowledge of every individual.”

– from “what-is-the-difference-between-management-and-leadership

Change…

There is nothing as powerful as a changed mind…

About importance of reading

We badly need to incentivize listening. And online, listening = reading. That old school program from my childhood was right, so deeply fundamentally right. Reading. Reading is Foundamental.

Let’s say you’re interested in World War II. Who would you rather have a discussion with about that? The guy who just skimmed the Wikipedia Article, or the gal who read the entirety of The Rise and Fall of the Third Reich?

If you’ve posted five times in the last 10 years, but you’ve read every single thing your community has ever written, I can guarantee that you, Mr. or Mrs. Lurker, are a far more important part of that community’s culture and social norms than someone who posted 100 times in the last two weeks. Value to a community should be measured every bit by how much you’ve read as much as how much you talked.”

– From “Because Reading is Foundamental” at CodingHorror Blog

My book list after the Scrum Gathering

Back from Paris I looked on my notes to search for the readings I put into my “must read list” and I ended up to order these books on Amazon:

1) Drive: The Surprising Truth About What Motivates Us – Daniel H.Pink
2) The Culture Game: Tools for the Agile Manager – Daniel Mezick
3) The Power of Scrum –  Jeffrey V. Sutherland, D. M. Van Solingen, Eelco Rustenberg
4) Scaling Lean & Agile Development: Thinking and Organizational Tools for Large-Scale Scrum – Craig Larman, Bas Vodde

I think I will be busy until the end of the year…