Wealth Building Strategies
Investors overestimate the importance of skill and underestimate the roll of random chance in investment returns. That’s the key finding of a study conducted by researchers at the University of Mannheim, in Germany. The study, entitled “Fooled by Randomness, Investor Perception of Fund Manager Skill” offers amazing insights into the nature of investing performance…. CLICK HERE to watch the video.
The Evidence-Based Investor Video series is a service provided by Paul Philip and the team at Financial Wealth Builders Securities
This weekend I came across an article from the world of healthcare that is very applicable to the world of business. The 1982 article by Patricia Benner, called “From Novice to Expert”, describes the five levels of competency and the leadership attributes of each level. The
levels are: Novice, Advanced Beginner, Competent, Proficient and Expert. While the article was written in the context of Nursing Leadership, it applies as much to business as it does to nursing.
What really caught my attention was her description of an Expert. Benner stated, “At the expert level, the performer no longer relies on an analytical principle (rule, guideline or maxim) to connect her/his understanding of the situation to appropriate action. The expert…has an intuitive grasp of the situation and zeroes in on the accurate region of the problem without wasteful consideration of a large range of unfruitful possible problem situations. It is very frustrating to try to capture verbal descriptions of expert performance because the expert operates from a deep understanding of the situation, much like a chess master who, when asked why he made a particularly masterful move, will just say, ‘Because it felt right. It looked good.’.”
This description is very consistent with the business experts I have known over the years that have highly developed emotional intelligence (EQ) and deep reservoirs of knowledge based on many years of business. They trust their instinct and are able to make great decisions with fragments of information, since the critical data is not seen by the novice.
This raises two very big questions for the business leader, owner or entrepreneur: Firstly, where am I on the Novice to Expert scale, and what am I doing now to move to the Expert level?
If you are just getting started in your career, or even in the first 10 to 15 years of your career, you still have much to learn as you will likely don’t know what you don’t know. If you are much further into to your career, you still likely have much to learn but at least will know what you don’t know. Be honest with yourself and assess where you are. Get third party assessments and be open to feedback about your skill level from mentors and coaches. Be realistic and pragmatic about your competency, particularly if you are relatively new to a field or profession.
If you want to move up the proficiency scale, do the following:
- Dedicate yourself to a lifelong program of personal development and continuous improvement. Read good books, take courses, and build good habits.
- Find a mastermind group, coach or mentor that will help you accelerate your improvement and teach you.
- Get as much experience as possible and embrace the difficulties in order to accelerate growth, so you can make mistakes, learn and get there faster.
Ask someone the price of a loaf of bread, or how much they paid for their car or their house and they should be able to give you a pretty accurate answer, but chances are they probably wouldn’t have a clue about how much they are paying to invest for their retirement and if they did know they’d probably be horrified…
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