Can Introverts Lead?

Click this link to watch a video about "Can Introverts Lead?"

http://blogs.hbr.org/video/2010/11/can-introverts-lead.html

It is generally believed that extrovert people are always the best leaders. Extroverted traits are always more favored, especially in the western culture. However, there are some reasons for introverts to also become excellent leaders.

First, Introvert leaders are good listeners. Unlike extroverts tend to talk most of the time, introvert leaders are more careful to listen to other people's ideas. After they understand other people's ideas, they can make good suggestions. Introvert leaders think carefully how to use other people's strength.

Second, an introvert leader is needed for a group of proactive followers. Introvert leaders are more successful with proactive followers with creative ideas. Introvert leaders, instead of telling people everything about what and how to do, provide opportunities for the followers to show their talents in their contribution, which can lead to great performance.


However, we cannot claim that whether is it good to be an extrovert or an introvert. The best style for an effective leader is to have both extrovert traits and introvert traits. The extrovert and introvert traits can be learned by adapting attitudes. A great leader are adaptable in different situations. If the followers are very silent, the leader should try to push the followers to be proactive. Introvert leaders can also push themselves to be more outgoing and assertive if needed.

To sum up, introverts can become great leaders, if they have proactive followers. Being authentic can lead good outcomings; overall, it is important to learn the advantages from both introverts and extroverts and to be adapatable according to situations.

5 Long-Term Consequences Of The Recession

By Stephen Simpson

Whenever the word "recession" comes up, people expect a certain amount of damage, and damage of a certain type. Everybody knows that there will be job losses and a general sense of gloom and malaise. Most people also seem to expect the government to "do something" to end the recession. Along the way, the stock market falls, interest rates drop and overall economic activity slows down. It is never pleasant, but it is a relatively routine part of the economic cycle. The Great Recession may be different. In addition to the "normal" effects, some of the consequences of this recession could run deep and last for many years.

1. "I Love You, But ..."
   This recession seems to be having a definite impact on family life. Industrial production is not the only "production" that has fallen - birth rates have dropped to record lows as people delay having children in the face of the economic troubles. What's more, there is the expected increase in divorces - not surprising, given that monetary issues are a common root cause of divorce and tough economic times sharpen those problems - as well as a big spike in prenup agreements.
2. Losing the Future
   One of the saddest under-reported consequences of recession is the different impacts it can have on young people. Grim as it is, recessions lead to higher rates of child malnutrition, and there is ample evidence that points to serious long-term consequences to such malnutrition, including stunted development and academic under-achievement.
   
   Even for kids who have enough to eat, the impacts can still be serious. Less money in the pockets of parents can have a direct impact on the kids' education and enrichment opportunities. Too many high school kids are finding college slipping out of reach due to a combination of parents who cannot help with tuition and banks that will not lend. What's more, it is fair to wonder what the psychological impact may be of seeing mom and/or dad lose a job and be out of work for years - does it inspire unproductive emotions like resentment or fatalism?
3. More Anger, More Distrust
   Recessions have a way of stapling a "kick me" sign to the back of whatever government is in charge during the troubles. This recession feels a bit different though, as almost everybody seems angry about something. One side of the aisle is livid at what they see as untrammeled expansion and intrusion of government; the other side chastises the government for not getting involved enough and solving the problem!
   
   With a festering pit of rancor to exploit, some politicians are apparently looking to score points with constituents by stirring the pot instead of working with their colleagues to create long-term solutions for national policy. In turn, that may mean that this recession has the long-term side effect of distracting the political process and creating so many bad feelings that important work goes undone and problems become even more serious down the line.
4. A New World of Jobs and Housing
   It seems likely that this recession will have a long tail in terms of its impact on jobs and housing. Individuals who thought their portfolio and/or the value of their house meant that retirement was imminent may now be facing a decade or more of additional working years. That could be bad on several levels, as it will block new entrants from the job market and will mean higher employment costs for companies. Ironically, the government may stand to benefit, as it could increase the spread of time where these workers contribute to the Social Security system before taking benefits.
   
   It is not unusual for housing prices to decline in a recession, but the role of housing in this Great Recession is clearly a little different than past examples. With so many people trapped in unsellable houses, the normal migration from areas with no jobs to areas with jobs has been stymied. Moreover, so many people have learned a harsh lesson regarding the fallacy of houses making great investments.
   
   What could this mean for the future? It is not unthinkable that politicians may reconsider whether it really is good to aggressively promote home ownership and whether Congress ought to roll back certain incentives. It may also be the case that former homeowners either decide that the hassles of home ownership are not worth the risks, or that they cannot get mortgages again in the future. In either case, houses may lose their luster and the recovery in housing prices could turn into a multi-decade slog.

5. Huge Debts to Pay
   In an ironic twist, a recession that came about in large part because of excessive consumer debt and excessive financial leverage in the system may yet end with far too much debt on balance sheets. As the Fed has determinedly pushed rates down to near-nothing, corporations (and the federal government) have gorged on the cheap paper.
   
   Savvy companies will no doubt put this capital to work and make substantial returns on the leverage. The problem is, it is never the savvy companies that cause reason to worry. It's the "me too" companies led by reckless or inept managers who will cause the trouble. Sooner or later, these companies will have a tough time paying their debts, and that will lead to a whole new cycle of worry, distress, job loss and so on. Likewise, without a buoyant economy to bail out the federal government, this high public debt burden could lead the way to higher taxes, higher inflation and other unpleasant consequences.

Prudence, Not Fear, Pays Off
There will always be reasons to be concerned about the future, but investors should guard against despair and unproductive fear. True, this recession may prove to have some long-term consequences that are not fully appreciated today. That does not make them insolvable, however. The best option for investors is to stay as informed as possible, stay diversified and be opportunistic when new ideas show up.

The Best And Worst Investing Advice

by Lisa Smith

Investing is a confusing endeavor for many people, so much so that an entire industry has grown up around giving advice to those in need. Sometimes that advice works out and sometimes it doesn't. Let's look at few timeworn concepts that don't always work out so well for investors despite the industry's recommendations. There are few absolutes in the world of investing, but for decades leading up to the late 2000s, there were a few Wall Street mantras that investors were told over and over again. Here are some of the best and the worst investing advice you've probably heard.

Advice to Reconsider

1. Diversify
Diversification has long been held up as a way to protect your portfolio. The theory holds that when some investments lose value, others will gain. For example, investing in emerging markets and small cap stocks instead of just blue chips is touted as a way to protect your portfolio. A global recession can override that theory.

2. Buy Term and Invest the Rest
Whole life insurance policies have been panned for decades. Critics cite the low rate of return they provide and highlight how investing in the stock market can provide significantly greater gains. While it is true that whole life policies pay low rates of interest, any positive rate of return beats the negative 40% delivered by the last bear market.

3. Money Markets are as Safe as Cash
Money market accounts have been marketed as "safe" for so long that 401(k) plans often list them as "cash". The flash crash serves as a stark reminder to investors about the need to truly understanding their portfolios.

4. Don't Pay Off Your Mortgage
The logic stated that investing your money would generate a greater return than paying off your mortgage. When bear markets hit, this logic goes out the window. Sure, real estate values can fall too, but even in a declining real estate market the bank doesn't foreclose on a home that is paid off.

5. Real Estate is a Safe Investment
The idea that you house would always increase in value seemed like a safe premise. Multiple years of hefty price declines debunked this myth.

6. Holding Many Stocks Provides Diversification
This time-worn gem fails to hold up when a global recession pushes nearly all stock markets down. Yes, there are exceptions, as a few markets always manage to stay positive, but not many investors manage to pick the right markets in advance.

7. Fixed Rate Annuities are a Bad Investment
Fixed-rate annuities have been heavily criticized for their hefty fees and complex rules. None of those factors seemed to bother annuity investors who enjoy positive returns throughout even the worst bear markets.

Is It Really Bad Advice?
So are all of those common bits of advice simply bad? Perhaps not at the time there were given, but none of them work out too well for investors expecting to retire when a major bear market hits and the global economy meltdown on all fronts. Keep in mind that any idea is a good one until it doesn't work.

Advice That Never Goes Out of Style

Like a broken clock, all advice is good at least once in a while. If you are looking for timeless gems like the little black dress that never goes out of style, consider these…

1. Have a Plan
The old cliché is true. Nobody plans to fail, but many fail to plan. Having a comprehensive financial plan in place, understanding your goals, and proactively managing your investments are never bad ideas.

2. Have a Cash Cushion
The emergency fund is always a classic fashion. Like an insurance policy, you hope you never need to use it, but if you do, it’s there when you need it.

3. Live Below Your Means
If you make a habit of spending less that you earn, it will be much easier to survive if your earnings decline. Losing your job is never fun, but losing your house and car too make the situation significantly worse.

4. Nothing is Risk Free
Even money market funds can be problematic. Don't even put money in an investment, even it is being sold to you by your best friend, with the idea that there is no way you can lose money.

5. Nothing Rises Forever
From the S&P 500 to real estate prices, this little truism has proven itself over and over again. If there was ever a safe bet, this is it.

6. If it Sounds Too Good to be True, it is
Hope and greed cause investors do put their faith in the strangest things. Apply common sense before handing over your money.

7. Read the Disclosures
This may be the most boring, least exciting concept, but remember; Past performance is not indicative of future results; this product is not insured by the Federal Deposit Insurance Corporation. This product is not a deposit or other obligation of, or guaranteed by, the bank. And last but not least, this product is subject to investment risks, including possible loss of the principle amount invested.

The Bottom Line
Not all advice is good advice, but it isn't all bad either. Learn as much as you can and make the decision for yourself. In the end, you'll find what advice works best for you and your investing style.

Risk Management and Innovation

The biggest risk could lie in misconceiving risk management itself, says Innosight's

Mark W. Johnson

1. Risk management isn't the antithesis of innovation; it's the essence.

How an organization conceives of risk management will in large part determine how effectively innovation is pursued. As with the first four answers to my hypothetical question above, many people see risk management as largely preventative or as the opposite of the bold risk-taking that breakthrough innovation is assumed to entail. In this view, risk management is the guy in the green eyeshade whose job is to stand behind the visionary with his head in the clouds and keep his feet on the ground—and sometimes hold those feet to the fire.

But risk management and innovation aren't opposed. As Clark G. Gilbert and my colleague Matthew J. Eyring recently argued in Harvard Business Review, the core competency of the most effective and successful innovators is risk management. To repeat: Risk management is their core competency. For these innovators, whether in new ventures or in a corporate setting, the ability to identify, prioritize, and systematically eliminate risks is what drives innovation forward.

They approach risk management not as a safety procedure but as a learning process. They know that no new-business model is perfect from its inception. So they test its various components and their combinations—its customer value proposition, profit formula, key resources, and key processes—in controlled experiments in tightly circumscribed markets, learning as they go and making adjustments.

2. Risk management isn't the brake on innovation; it's the accelerator.

Risk management, treated as a learning process, not only propels innovation forward but can also speed it up. For example, Hilti, a maker of handheld power tools that was seeing its premium products undercut by lower-priced tools, innovated a new business model in which the company would lease and manage "fleets" of tools for contractors who found tool management a bigger headache than tool costs. The model would require on Hilti's part an entirely new set of skills—contract management, customer relationship management, fleet management—and require an entirely new way of working with clients. All of these challenges represented significant risks for success.

To manage those risks, the company tested an early form of the business model on only eight customers in its home market of Switzerland. During this early period, they were able to experiment with various accounting metrics, contract parameters, and service models—testing and refining the assumptions in their new value proposition. They had believed, for example, that only large construction firms would be interested in the leasing option, but they quickly learned that small and midsize firms had reasons of their own for finding it attractive.

By conducting many small experiments in this limited foothold market, from which it learned valuable lessons and made important early course corrections, the company was able to take the new model from its pilot stage to rollout in all of its markets worldwide in only three years. As Hilti understands, the right kind of risk management isn't just built for comfort; it's also built for speed.

3. Real discipline in innovation risk management means a more relaxed approach to the financials.

In genuinely new-business innovation projects, it is critical to release the leaders of the effort from the norms and metrics of the core business. While experimentation speeds the time to a viable business innovation, it does not necessarily lead immediately to the kind of large-scale growth or increased market share that are usually the barometers of performance in the core business. When new-business innovation fails within a few years to generate major growth or market-share gains, one of two things often happens. Either the effort is abandoned prematurely or more money is thrown at it to push it forward. In the first instance, a more patient company often comes along and succeeds with a similar value proposition. In the second, we often see "zombie" innovation projects that limp along, continuing to suck good money after bad.

It is more prudent and ultimately more productive to first get the value proposition right and to judge it in terms of how fast it converts assumptions to certain knowledge. The relevant financial measure during this stage is whether the new business can be made profitable in its foothold market. Profitability confirms the strength of your fundamentals, allowing you the patience to scale up in a measured way. That is the real financial discipline in innovation risk management: the unswerving ability to resist applying the wrong kind of financial metrics at the wrong time and so unwittingly choke off growth potential before it can reach full fruition.

Taken together, these three principles suggest that one of the biggest risks in innovation is to see risk management as a framework to be superimposed on new-business creation rather than as an inseparable part of the process itself.

Mark W. Johnson is Chairman and Co-Founder of innovation consulting and research firm, Innosight. He is the author of Seizing the White Space: Business Model Innovation for Transformative Growth and Renewal, (Harvard Business Press, February 2010) and a co-author of The Innovator's Guide to Growth (Harvard Business Press, July 2008).