Simply Being
The value of investments, and the
income from them, can go down as well as up and you may get back less than the
amount invested.
Discovery
The Da Vinci glow
This 500-year old drawing of the
Moon is by Leonardo da Vinci. Sunshine lights up the crescent — but what lights
up the left side? Leonardo understood that it's the Earth. Clouds and ice,
bright deserts and dark oceans have different reflectivity. Together, these
determine the intensity of ‘earth shine’. Climate researchers now put that
simple principle to practical use. Satellites are unsuitable for tracking
changes in the factors — such as reflectivity — that control climate on earth:
the degree of detail is good but space instruments deteriorate with time.
A simple alternative is earth shine. By observing its intensity from ground observatories we have a very cost-effective (1000 times less expensive than satellites) and technically simple system for learning about climate change.
A simple alternative is earth shine. By observing its intensity from ground observatories we have a very cost-effective (1000 times less expensive than satellites) and technically simple system for learning about climate change.
Dr Peter Thejll
Danish Meteorological Institute
Image credit: public domain
Teamwork
Wisdom of crowds
Inviting the general populace to
find answers to thorny problems is nothing new. In 1714, the British government
offered £20,000 to the person who could invent a way to measure longitude
accurately in open seas — and helped save the lives of generations of sailors
in the process.
But now the internet allows the gathering of ideas on an industrial scale.
InnoCentive describes itself as the global leader in crowdsourcing innovation problems. Founded in 2001, the site has 285,000 registered solvers from 200 countries. These minds are readily put to work by the world’s leading organisations on their toughest problems, including NASA, Procter & Gamble and The Economist. Successful solutions are offered $500 to $1 million depending on the complexity of the problem. To date, Innocentive’s open innovation marketplace has helped source a biomarker for Lou Gehrig’s Disease, a means to separate oil from frozen water, and a dual-purpose solar light for remote communities to use as both lamp and flashlight.
www.innocentive.com
But now the internet allows the gathering of ideas on an industrial scale.
InnoCentive describes itself as the global leader in crowdsourcing innovation problems. Founded in 2001, the site has 285,000 registered solvers from 200 countries. These minds are readily put to work by the world’s leading organisations on their toughest problems, including NASA, Procter & Gamble and The Economist. Successful solutions are offered $500 to $1 million depending on the complexity of the problem. To date, Innocentive’s open innovation marketplace has helped source a biomarker for Lou Gehrig’s Disease, a means to separate oil from frozen water, and a dual-purpose solar light for remote communities to use as both lamp and flashlight.
www.innocentive.com
Attitude
One man draws on our mistakes
Why do we lose money? It's easy to
blame the economy or the financial markets. But according to Carl Richards, a financial
planner from Utah and blogger for New York Times, the real trouble lies in the
natural human instinct for safety or success — which can lead us to make the
same mistakes over and over.
Richards has named this phenomenon — the distance between what we should do and what our instincts tell us to do — "The Behavior Gap". Using simple drawings to pinpoint the gap in a range of day-to-day thinking, he found that once people see it, they are able to make much smarter decisions.
www.behaviorgap.com
Richards has named this phenomenon — the distance between what we should do and what our instincts tell us to do — "The Behavior Gap". Using simple drawings to pinpoint the gap in a range of day-to-day thinking, he found that once people see it, they are able to make much smarter decisions.
www.behaviorgap.com
Investing
Be wary of over-ambition
When selecting companies to invest
in, simplicity matters a lot. In a bid to create more revenue, it is often
tempting for businesses to expand capacity or even invest in areas outside
their core area of expertise. One should be very wary of such ambition, as it
naturally means a reduction in focus on core capacity, and can have serious
implications for a company’s balance sheet.
A focus on the ‘top line’ tends to be great for stakeholders such as employees, suppliers and bankers — but rarely for minority shareholders. Look out instead for companies that know what they do best — and who do it very well.
A focus on the ‘top line’ tends to be great for stakeholders such as employees, suppliers and bankers — but rarely for minority shareholders. Look out instead for companies that know what they do best — and who do it very well.
Hugh Young
Group Head of Equities
This is one of Hugh Young’s ‘Ten Golden Rules of Equity Investing’.
To see more go to www.aberdeen-asset.com/tenrules
Strategy
The key to growth
How has Aberdeen grown into a FTSE
100 company present in 23 countries? By keeping our investment philosophy
simple, says Martin Gilbert, Aberdeen’s Chief Executive. Nowhere is that more
apparent than in the Asia and Emerging Markets equity process.
Aberdeen CEO Martin Gilbert
Business Culture
Simple ways to work
At Aberdeen, we’ve worked hard to
retain the entrepreneurial spirit that created the company 30 years ago. How
can that be done when you’re in 23 countries with over 2,000 employees? Partly,
it’s structural, partly it’s cultural.In terms of structure, we consciously
look to retain a business that’s as flat as it can be. As a firm grows, it’s
all too easy to add new layers of hierarchy, which makes senior personnel
increasingly distant from the day-to-day business. To avoid that, we do our
best to ensure our global structure remains straightforward and tight-knit —
while still enabling the business to function effectively across 23 countries.”
But a flat structure can’t work without the culture of a non-hierarchy. So, everyone at every level at Aberdeen is expected to be approachable and accessible. Informal as well as formal communications are encouraged so viewpoints are honest and immediate. Communications flow across the business, not just top to bottom. Goals can be set and owned lower down the organisation — not just at the top. Decisions can be made quickly — changes can be enacted swiftly. A caveat is that everyone has to be willing to work in this way: directors who prefer to stay well away from the frontline, or people who relish company politics, don’t function well in a business like this. That’s why when we recruit, personal characteristics matter just as much as experience.
But a flat structure can’t work without the culture of a non-hierarchy. So, everyone at every level at Aberdeen is expected to be approachable and accessible. Informal as well as formal communications are encouraged so viewpoints are honest and immediate. Communications flow across the business, not just top to bottom. Goals can be set and owned lower down the organisation — not just at the top. Decisions can be made quickly — changes can be enacted swiftly. A caveat is that everyone has to be willing to work in this way: directors who prefer to stay well away from the frontline, or people who relish company politics, don’t function well in a business like this. That’s why when we recruit, personal characteristics matter just as much as experience.
Simply Put
The value of investments, and the
income from them, can go down as well as up and you may get back less than the
amount invested.
George Whitesides
Ideas as building blocks
Simplicity — we know it when we see
it — but what is it? According to Harvard chemistry professor George
Whitesides, true simplicity lies in things that are reliable, predictable and
repeatable. But the real power of simple things lies in their ability to be put
together to create new things — just as simple stones can create cathedrals —
or binary code led to transistors which led to the internet. “Cheap,
functional, reliable things unleash the creativity of people who then build
stuff you would not imagine,” he says.
Now he is applying this idea of ‘stacked simplicity’ to create a "lab-on-a-chip" — paper stamps using coloured inks which could allow remote communities to administer medical diagnostic tests and send results to doctors via a cameraphone.
Now he is applying this idea of ‘stacked simplicity’ to create a "lab-on-a-chip" — paper stamps using coloured inks which could allow remote communities to administer medical diagnostic tests and send results to doctors via a cameraphone.
Tim Harford
Failing is a winning strategy
You could be forgiven for thinking
that the most successful companies are those that consistently make the right
choices and do the right thing. But not according to English economist Tim
Harford.
He believes that real success in any organisation comes from being willing to fail — and being willing to fail A LOT — simply because you can never know in advance exactly which ideas will work. That’s why companies like Google are willing to allow engineers to explore their own ideas one day a week — because for every non-starter like Google Wave, there could be a winner like Adsense.
The big challenge in a success-obsessed world is rehabilitating the perception of failure so it can be seen as productive — even to a point where we are encouraged to ‘increase’ our failure rate. “Trial and error is the most effective problem-solving technique we have in a complex world,” Harford says. “The mark of success is not to avoid failure but to learn from it, adjust and adapt.”
He believes that real success in any organisation comes from being willing to fail — and being willing to fail A LOT — simply because you can never know in advance exactly which ideas will work. That’s why companies like Google are willing to allow engineers to explore their own ideas one day a week — because for every non-starter like Google Wave, there could be a winner like Adsense.
The big challenge in a success-obsessed world is rehabilitating the perception of failure so it can be seen as productive — even to a point where we are encouraged to ‘increase’ our failure rate. “Trial and error is the most effective problem-solving technique we have in a complex world,” Harford says. “The mark of success is not to avoid failure but to learn from it, adjust and adapt.”
Muhammad Yunus
The father of microfinance
The first-ever microfinancing
Muhammad Yunus set up was loans of $27 to women making bamboo furniture in the
Bangladeshi village of Jobra in 1976. When the banks wouldn’t lend, he put up
himself as guarantor. Out of this conviction was created Grameen Bank — or
‘Village Bank’ — owned by its borrowers — 97% of whom are poorer women in
remote rural areas of Bangladesh — and serving over 8 million customers by
2012.
The concept couldn’t be simpler — lending tiny amounts of money initially, which can increase as the borrower demonstrates their ability to repay. The 2006 Nobel Peace Prize winner has proven that there’s no floor on who a microfinance customer can be — even lending $12 a piece to beggars to start their own enterprises selling candy and goods door-to-door.
“Human capacity and human creativity are limitless,” says Yunus. “In the face of them, all of the world’s problems can…disappear.”
The concept couldn’t be simpler — lending tiny amounts of money initially, which can increase as the borrower demonstrates their ability to repay. The 2006 Nobel Peace Prize winner has proven that there’s no floor on who a microfinance customer can be — even lending $12 a piece to beggars to start their own enterprises selling candy and goods door-to-door.
“Human capacity and human creativity are limitless,” says Yunus. “In the face of them, all of the world’s problems can…disappear.”
John Maeda
Simplicity equals sanity
It’s the simplicity paradox: we want
technology, products and services that are simple and easy to use. But we also
want them to do all the complex things we might ever want them to do. How can
this balancing act be resolved? John Maeda, the president of the Rhode Island
School of Design, believes it requires observing 10 principles — that he coined
in his 2006 book The Laws of Simplicity. He recognises that “people not only
buy, but more importantly love, designs that can make life simpler”. Law 1
therefore calls for solutions that ‘reduce’ — removing features and
functionality — but that do so thoughtfully so that what’s required still
remains. If things are still complex, then Law 2 is Organize — learning how
proper organisation can make a system of many appear fewer.
Other factors — speed of response, knowledge, creating openness — can all help to resolve the simplicity paradox. And they are rules that companies would be wise to heed. As Maeda observes: “For the foreseeable future, complicated technologies will continue to invade our home and workplaces, thus simplicity is bound to be a growth industry.”
The Laws of Simplicity — John Maeda — MIT Press 2006
Other factors — speed of response, knowledge, creating openness — can all help to resolve the simplicity paradox. And they are rules that companies would be wise to heed. As Maeda observes: “For the foreseeable future, complicated technologies will continue to invade our home and workplaces, thus simplicity is bound to be a growth industry.”
The Laws of Simplicity — John Maeda — MIT Press 2006
Words
The ultimate short story
Ernest Hemingway once wrote a story
in six words — “For sale: baby shoes. Never worn.”
He reportedly called it his best work. So Aberdeen’s most creative (but succinct) scribes were set the task of seeing if they could better his effort.
Here are six of the best
Anne Richards — Chief Investment Officer
Notification of bequest: One parachute. Unopened.
Alex Barr — Head of Private Equity Investments
Telephone, tears. drive, embrace. Whisky. Why?
Jeremy Whitley — Head of UK and European Equities
Open moorland, wet dogs, roaring fire
Piers Currie — Group Head of Brand
Dancing, hotel laughter, door key, close
Jennifer Love — Head of Legal — Advisors, Contractors and Suppliers
Small, grows, successful, still here, Yippee!
Stephanie Dunn — Marketing Manager — Pan Europe
Visitor pass, raised voices, lobby, loss.
He reportedly called it his best work. So Aberdeen’s most creative (but succinct) scribes were set the task of seeing if they could better his effort.
Here are six of the best
Anne Richards — Chief Investment Officer
Notification of bequest: One parachute. Unopened.
Alex Barr — Head of Private Equity Investments
Telephone, tears. drive, embrace. Whisky. Why?
Jeremy Whitley — Head of UK and European Equities
Open moorland, wet dogs, roaring fire
Piers Currie — Group Head of Brand
Dancing, hotel laughter, door key, close
Jennifer Love — Head of Legal — Advisors, Contractors and Suppliers
Small, grows, successful, still here, Yippee!
Stephanie Dunn — Marketing Manager — Pan Europe
Visitor pass, raised voices, lobby, loss.
Anne Richards
Making finance fit for purpose
From cars to mobile phones to financial
services, there is a natural tendency towards complexity to maximise
functionality.
Anne Richards, Chief Investment Officer of Aberdeen, argues that while many consumer products can hide their inner workings, financial solutions need to be aware of the trade-off between complexity and the unintended effect it can have. “If you want to get back to allowing people to choose whether a financial product is fit for purpose for what they want it to do, you have to strip away some of that complexity,” she says.
Anne Richards, Chief Investment Officer of Aberdeen, argues that while many consumer products can hide their inner workings, financial solutions need to be aware of the trade-off between complexity and the unintended effect it can have. “If you want to get back to allowing people to choose whether a financial product is fit for purpose for what they want it to do, you have to strip away some of that complexity,” she says.
Aberdeen CIO Anne Richards
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