Guy Kawasaki’s blog has an interesting interview with Michael Raynor, author of The Strategy Paradox: Why committing to success leads to failure (and what to do about it). One of the many points in this interview which is applicable to personal success, is that individual, highly focused, “brilliant” strategies can either be brilliantly successful or brilliant failures, while a portfolio of multiple strategies can be a better way to allocate resources, because further developments in the markets (or in life) can then validate one or more of the strategies. If your one "brilliant" strategy fails, well, you know that creek-and-paddle thing. Since randomness plays a role in all of business and life, more strategies may yield a better overall probability of some success, rather than "brilliant" success or failure.
In personal finance, for instance, a big market downdraft in he stock market (such as we are currently experiencing) can be weathered more efficiently if we also have other investments besides stocks. For instance, bonds are doing fine right now, in spite of the tumbling stock market. In the tech bubble of 2001-2002, those most hurt were those with very narrowly-focused portfolios.
This is true, in more broad outlines, in other facets of life. Some of the most successful businessmen are voracious readers. Many read a half-dozen newspapers per day, and many books as well. One wonders how they have the time, stressed as they are with managerial duties. The answer: they don’t have time not to! They need that wide viewpoint to go beyond the narrow focus of their current business decisions. They need to "see around corners" and keep their mind open to a "portfolio" of possibilities.
The more options that are considered, in business or in life, the more input the organization, or even our personal unconscious, has available as a source of creativity and renewal.
In my previous field, I was very narrowly focused, and I suffered because I did not broaden my outlook. Now, as an investor, I have multiple strategies in play, with various bet sizes, asset classes, and time frames. Not only does this approach work for me, it keeps my mind open and sharp. Options put change on our side…too much focus ... and we might run off the road on a sharp curve.
Techtags: Guy Kawasaki Business Strategy