First few days in a new job

What do you do when you start working at a new place or in a new role? Do you start slow and wait to see what confronts you? Instead of adopting a reactive approach, I would recommend the following:

1. Network: Networking matters. Try to get to know your superiors, peers and subordinates. Find out not only what they are working on but also what their communication styles are, their personalities and influence within the organization.


2. Organizational Knowledge: No one is going to come and tell you about how to get things done. You need to find out yourself. You need to do this in the initial few weeks when people don't expect you to know this stuff. You also need to find out organizational history - what happened to the person who you are replacing, how have people grown in this organization, what is the best way to communicate, how are people evaluated...


3. Seek Mentors: Don't go and ask someone to be a mentor! That never works. From your efforts to network and get to know the organization, you will find people from whom you can learn. Tell these people that you are new to the organization and would like their advice as you get up to speed. Don't limit yourself to people who you feel comfortable with because they are like you.

I am interested in hearing what suggestions others have. Please add suggestions through comments. I will periodically update this post and try to keep it current.

Cognitive Bias (1)

Wikipedia defines cognitive bias as a 'distortion in the way humans perceive reality'. Let's see if you have a bias in the way you evaluate investment opportunity described below. This was an investment scheme presented to my father.

A wealth management firm has an investment scheme for retirees. The firm says they have investment experts who analyze the markets using proprietary tools and have a great track record. The firm claims that its returns in previous three years have been at least 15%. According to the scheme, the firm will invest your money in different investments. Depending on the blended returns from the investments, the investment firm gets certain commissions according to a three tiered schedule:

Blended return (r)	Commission	Returns to investor
Less than or equal to 10%	0	r
Between 10% and 20%	20% over 10% (=0.2 X (r – 0.1))	10% + 0.8 X (r – 0.1)
Over 20%	2% plus 40% over 20% (= 0.02 + 0.4 X (r – 0.2))	18% + 0.6 X (r – 0.2)

The firm says that the incentives are very clearly if they don't give the investor a return of at least 10% the firm gets nothing. Therefore, the firm will really make sure that the investor gets a great return.

What do you think of this investment opportunity? Click here to see my take.

Let me first state my assumption before I tell you that I would never invest in something like this. I believe that markets are by and large efficient. Unless an investor (in this case the firm) has insider information about an investment, the investor cannot do better than investing randomly. This is the guiding principle of most of the finance professors at the Chicago GSB.

If the above holds true, the firm cannot really pick investments. Let us say that they have 10 investment options. Let us say the investment firm manages investments for 10 retirees. Since the firm has no ability to pick investments, it will invest randomly. Retiree 1's funds go into Investment 1; retiree 2's funds go into Investment 2 and so on.

Let us assume that the general market (think of this as the S&P 500 index) grew at 8% that year and the return on the individual investments look as follows:

Investment 1	-8%
Investment 2	-4%
Investment 3	0%
Investment 4	4%
Investment 5	8%
Investment 6	8%
Investment 7	12%
Investment 8	16%
Investment 9	20%
Investment 10	24%

On average, the investments gave a return of 8%. Four investments did worse than the general market and four did better. Two matched the market performance. Let us see how our retirees did. Keep in mind that in this market, if any investment gets you less than 8%, you are worse off then investing in the broad index.

Investment	Investment return	Firm commission	Retiree return	Retiree
Investment 1	-8%		-8%	Retiree 1
Investment 2	-4%		-4%	Retiree 2
Investment 3	0%		0%	Retiree 3
Investment 4	4%		4%	Retiree 4
Investment 5	8%		8%	Retiree 5
Investment 6	8%		8%	Retiree 6
Investment 7	12%	0%	12%	Retiree 7
Investment 8	16%	1%	15%	Retiree 8
Investment 9	20%	2%	18%	Retiree 9
Investment 10	24%	4%	20%	Retiree 10
Average	8%	2%	7%

On average, the retirees did worse than the market. The investment which looked good upfront turned out to be a bad one. The problem was that the incentives that seemed well aligned were actually not well aligned. For the incentives to be well aligned, the firm should have offered a minimum guaranteed return. The way the scheme was structured, the firm never lost any money.

This is an example of a Confirmation Bias. At first glance, we only try to see how the scheme might work to our advantage. We don't try to imagine how it might work against us. The second effect here is the Base Rate Fallacy. We don't consider that in fact no one can pick stocks or other investments without having insider information. Since this firm does not have insider information, their probability of picking good investments is 0. We still think that since the firm's incentives appear aligned, they must be confident of their ability to pick good investments. Since they appear confident, they must be able to pick good investments.

To read more about such biases, go to the list of cognitive biases on Wikipedia. It is one of the most comprehensive lists on the topic that I have seen. I strongly recommend it to anyone who has any interest in the topic.

Getting to the CEO for customer service

I was recently involved in a situation where I had problems with the service I received from this company. I was calling the company's customer service department almost every week. Every time I called I was assured that my problem will be taken care of in the next 15 days. Much to my annoyance, nothing happened for months. I was at my wits end and did not know what to do. I entertained thoughts of suing the company. Of course there was no guarantee that I would have been successful, especially because this was a large company.

Luckily for me, I came in touch with this person who helped me solve the problem. He asked me to call up the CEO and tell him the problem that I was facing. Initially, I was very skeptical. Why would a CEO help me solve this tiny problem? But guess what, it worked! And it is much more effective than trying to sue the company

Here is how I was able to solve my problem:

1. I found out the name of the CEO of the company. If this is a public company, you can easily do this by going to the company's website or Yahoo Finance. If the company is private, it is going to be harder. Try to use Google to find this information.
   
2. Once I had the name of the CEO, I tried to look for the phone number of the CEO. I found that this was next to impossible. It is almost impossible to find the phone number for the CEO. Instead, I found the corporate number. Once again you may find this on company's website or Yahoo Finance.
   
3. I called up the corporate number and asked for the CEO by name. The operator was taken aback a little and asked me if I was sure I wanted to talk to him. I said that I was sure and that I was a customer who wanted to talk to him.
   
4. The operator transferred me to the CEO's office. The call was handled by someone in the CEO's office. I told this person that I wanted to talk to the CEO because I was having trouble with customer service and I wanted my problem to be resolved. She gave me the number of the point person who deals with all complaints that come from the CEO's office.
   
5. I then talked to the point person and told him that I was forwarded to him by the CEO's office. I explained my problem to him. He promised to contact the relevant departments and assured me that there will be action within a week. It worked. My problem was solved by the following week.
   

Here is what I concluded from this experience:

Customer service departments are overworked and have little authority. If you have been struggling to get your problems resolved through customer service, do what I did and talk to someone in the CEO's office. CEO's of large companies have people whose only job is to handle complaints that have reached the CEO's office.

Writing a great resume (2)

In my previous post, I wrote about the general aspects of writing a resume. In this post, I will talk about how you should go about writing a resume for your specific situation.

What do I want to convey in the resume?

• Skills: Make a list of the skills that you want your resume to convey. As explained in the previous post, these should be skills that are relevant for the position. Once you have this list, think of examples in your experience that would prove that you indeed have these skills. Creating this inventory of examples is not a quick or an easy task. Plan to spend several days doing this activity.

• Career progression: You should definitely think about how you want to convey career progression. It is important to come across as being accomplished without sounding arrogant.

• Summary: If you have a lot of experience it might make sense to have a summary of your experience. This summary should not be more than three bullets and should help the recruiter form a mental image about your experience.
  

• Interests: For any position, it is likely that there are multiple candidates who are suitable for the position. To stand out from the rest of the crowd and attract (positive) attention, consider putting some interesting facts about yourself. For example, you could mention your recent attempt to climb Mount Shasta. Be careful with this information though. If you put something controversial in the Interests section, it may backfire.
  

How should I write my bullets?

By now you should have the content ready. It is now time to put this content into bullets. Here is how you do it:

• STAR: Try to structure each bullet in the STAR format. What in the world is the STAR format? STAR stands for situation, task, action and result. What was the situation? What was your role or task? What actions did you take? What was the result?
  

• Succinct: While you want to provide a complete picture in a bullet, be sure that each bullet is succinct. If a word or a phrase is not adding any value, remove it. If a phrase can be substituted by a single word, do it.
  

• One bullet, one message: Each bullet should only have one idea otherwise the message gets diluted.
  

• No lingo: I cannot emphasize this enough. The recruiter may be unfamiliar with the jargon used in your previous job, company or career. Please do yourself a favor and make your resume accessible. No one will be impressed by your accomplishments if they cannot even understand what they mean.
  

How should I format my resume?

• Good visual layout: How your resume looks does matter. It is easy to find formats that look good without being excessively flashy. Make sure your fonts are readable and familiar (I recommend Times New Roman). The font size should not be too small or too large (I recommend 10 or 11). Bullets and sections should be well aligned and easy to read.
  

• One page: Often people claim that they have so much experience that it is impossible to keep the resume to a single page. It may be true in some cases. However, I often see resumes where every single detail or a position that was held 10 years ago is listed. If any detail is not essential for the current position, remove it. If you are sure that your resume cannot be trimmed further without losing effectiveness you may go over a page.
  

I have done all of the above, am I done?

No. Writing a good resume is an iterative process. Get feedback from friends and family members who are familiar with your background. They may provide suggestions about content and formatting that are valuable. They may also help you uncover uses of jargon or point out situations where something is not clear.

In addition, try to get feedback from someone who works in your target industry. You may find that you can tailor your resume to what is expected in that industry.

Good luck with writing your resume. I will try to post some examples in a future post.