+The True Measures of Success

Compiled by Zehady Abdullah Khan

Mathematical Science,Department of Information & Computer Science,

Osaka University.E-mail: a_khanzehady@yahoo.com

+Introduction

Intelligent people in any field should be aware of their objectives.

Success strategy depends on picking your statistics(variables that has effect on your success).

There are some statistics that are important and some are not. This is very important to remember.

Most people fail to choose the correct statistics.

Most people have some common bias.

+Common Biases

Overconfidence

Availability

Status Quo

+1. Overconfidence

Deep confidence in judgments and abilities is often inconsistent with reality.

Most people, for example, regard themselves as better-than-average drivers.

+2. Availability

Cause or probability of an event on the basis of how readily similar examples come to mind—that is, how “available” they are to us.

Overestimating the importance of information that we’ve encountered recently.

+Not only Skill but luck

Performance almost always depends on both skill and luck.

A given strategy will succeed only part of the time. Good Strategies or Practices: Leadership, people, a fact-

based approach, focus, discipline, and the use of technology

Some using the strategy will succeed; others will fail.

+Wrong Cause for an Effect Say two companies pursue the same strategy One succeeds because of luck while the other fails. Wrongly assume that the favorable outcome was the result of

skill and overlook the influence of luck. We connect cause and effect where there is no connection.

Lesson: When luck plays a part

don’t study success to identify good strategy. but study strategy to see whether it consistently led to success.

+3. Status Quo

Urge to stay the same.

Resist to face the risk that may bring change. Derives from our tendency to avoid a loss even if we could

achieve a big gain.

+Persistent Statistics

Statistics that are persistent and predictive reliably link cause and effect.

Statistics that assess activities requiring skill are persistent. Example: The performance of a trained sprinter running

100 meters on two consecutive days are expected to be the same.

Persistent statistics reflect performance Can reliably be controlled through the application of skill.

Statistics must predict the result you’re seeking.

+Example

+Example

+Picking Statistics

Define your governing objective. A clear objective is essential to success because it guides the

allocation of your effort.

Develop a theory of cause and effect to assess presumed drivers of the objective. Three financial drivers of value creation: sales, costs, and

investments.

Identify the specific activities that will help achieve the governing objective.

Evaluate and reevaluate statistics regularly. The drivers of value change over time, and so must your

statistics.

+Reference

Michael J. Mauboussin Harvard Business Review, October 2012. Chief investment strategist at Legg Mason Capital

Management and an adjunct professor of finance at Columbia Business School. He is the author of The Success Equation (Harvard Business Review Press, forthcoming), from which this article was developed.

http://alfredopassos.tumblr.com/post/32462147955/the-true-measures-of-success-by-michael-j-mauboussin

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The End