Since investors rarely behave according to financial and economic theory, behavioural finance has grown over the past twenty years.

Most investors know that emotion affects the way in which investment decisions are made and that greed and fear play a large role in driving investment markets. The actions of many investors are based on feelings rather than facts. They may make decisions based on a host of emotional biases that, unfortunately, undermine the chance of meeting the desired investment outcomes.

Admittedly, it is difficult to escape the influence of emotions on investment decision making, and that influence is more than likely the main reason many investors do not achieve the results they want. Our brains regularly set little traps for us and these emotional potholes may have very real costs associated with them. Crucial in overcoming this risk is awareness of how emotions can affect decisions, which may make you a better investor in the process.

In order to improve decision-making and investment results, it certainly helps to be aware of:

Some of the most common biases

Herd mentality

Our emotions may be influenced by the prevailing investment climate such as a fear of standing out from the crowd or missing out on a trend. Herd behaviour/mentality can amplify the market upswings and downturns and a prominent example was the dotcom bubble in the late 1990s.

Venture capitalists and private investors made frantic moves to invest huge amounts of money into internet companies, despite the fact that many of those dotcoms not having financially sound business models. Many investors more than likely moved their money in this way, on the reassurance they received from seeing so many other investors do the same thing. They did not want to miss out and followed the herd of sheep rather than their logic.

Greed and fear

This relates to an old Wall Street saying that financial markets are driven by two powerful emotions greed and fear. Succumbing to these emotions can have a profound and detrimental effect on investment outcomes, as too often, investors enter (on greed) or exit (on fear) the market at precisely the wrong time.

Overconfidence

Overconfidence may cause investors to overestimate the quality of their judgment or information. Some investors believe they can successfully predict market downturns and rallies. Others perceive themselves to have a knowledge advantage when they get a tip from someone in finance or read information from a publication or research report. In reality, several studies have shown that overconfidence bias leads investors to trade more frequently in an effort to align their positions with current market conditions.

The cost of frequent trading erodes returns and returns earned are rarely sufficient to make up the difference. Investors are very susceptible to forgetting the times they were incorrect or recognising the role that luck played in positive outcomes.

If you ever find yourself saying things such as nothing could ever go wrong, I believe it will go forever, or I know the risks, it may be time to check yourself. It is important to remember that every investment carries some risk and the potential for loss.

Loss aversion

The basic concept behind loss aversion is that investors feel losses much more than they feel gains. Investors would rather avoid losses than reap rewards. Loss aversion is often seen in financial markets stock market investors hold their positions with paper losses too long and sell their investment holding paper gains too early.

Consider an investment bought for R1 000 that rises quickly to R1 500. Investors would be tempted to sell it in order to lock in the profit. In contrast, if the investment dropped to R500, investors would tend to hold it, in order to avoid locking in the loss. The idea of a loss is so painful that investors tend to delay recognising it. More generally, investors with losing positions show a strong desire to get back to the break-even point.

This means that investors generally show highly risk-averse behaviour when facing a profit selling and locking in the sure gain and more risk-tolerant or risk-seeking behaviour when facing a loss continuing to hold the investment in the hope the price rises again

Albert Louw is the head of Business Development at Stanlib.

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The pitfalls of emotional investing: Part 1 - Moneyweb.co.za

Private equity and venture funds have invested record sums into the global education sector$30 billion in the past five years across K-12 and workplace learning. Since 2017, investment has accelerated with $14 billion allocated, according to research firm HolonIQ.

Despite the influx of capital, employers, schools and policymakers are only just beginning to harness the sectors advancements in the delivery, accessibility and effectiveness of education technology. As adoption of these products and services increases around the world, so too does the opportunity for investors and entrepreneurs to generate positive social and economic impact alongside financial returns.

Here are five key trends to consider as education enters a new decade:

In the 1940s and 50s, employers seeking to attract the best workers offered healthcare benefits. In the early 2000s, employers offered free snacks and installed foosball tables.

Those perks have lost their luster, and with help from the Affordable Care Act, even healthcare is becoming less of a differentiator. Today, leading corporations hope to drive employee engagement, retention and advancement through providing education.

In 2014, Starbucks and Arizona State University pioneered a new kind of partnership. By offering high-quality, affordable online courses and programs, coupled with tuition assistance, ASU and Starbucks enabled thousands to become degree holdersdebt free. In a recent interview with CNBC, Starbucks CEO Kevin Johnson pointed to the College Achievement Plan as a driver for sales growth, because employee engagement yields customer engagement.

To broaden this workplace education initiative, The Rise Fund partnered with ASU and other leading online universities to launch InStride, providing valuable educational credentials to the employees of forward-thinking corporations. In bringing affordable education to the workplace, companies like InStride, Guild, Degreed and EdAssist are addressing the biggest issues in higher education: career relevance and student debt.

Today, 95 percent of teenagers have access to a smartphone, and the average teen is now spending more than 7 hours per day on their screens, including over 1.5 hours on social media. But the proliferation of technology does not come without concerns. These tools can amplify feelings of loneliness and serve as a platform for cyberbullying.

Mental health problems, especially among teens, increased significantly in the last decade. Seventy percent of teenagers identify mental health as a major issue, worse than drug addiction, and gangs. Suicide is now the second-leading cause of death among 10- to 24-year-olds, and the rate has tripled over the last 10 years. In a Harvard Medical School study of 67,000 college students across more than 100 institutions, 1 out of 5 students surveyed said that they had thought about suicide.

Teachers and administrators are hungry for effective ways to teach social and emotional learning, says former U.S. Secretary of Education Arne Duncan.

Who will pay for these needed services? Most are paid by schools or districts, but other funding approaches are emerging. One of our portfolio investments, EverFi, finds corporate partners to fund their bullying prevention programs in schools. Other companies, like Presence Learning, are experimenting with models that may be reimbursed by health insurance, while Aperture Education helps schools to find grant funding for their services.

Education technology reached a tipping point in the last decade. Broadband penetration in K-12 schools reached over 98 percent, while low-cost computing devices like Chromebooks have proliferated in classrooms.

This has laid the infrastructure to support new instructional tools, many built by new companies that have emerged to compete with traditional print publishers. HolonIQ estimates that global spending on digital education tools surpassed $150 billion last year, and will double by 2025.

But purchasing is not proof that something works. Even more concerning: many tools may simply be gathering (digital) dust. A recent study by the University of Pennsylvania, only 30 percent of edtech licenses are actually used.

In any future economic downturn, expect technology providers who fail to show evidence of improvementlet alone usageto get axed. Those seeking to avoid this fate would do well to invest in proving that their products work. DreamBox, (another portfolio company) invests in efficacy research led by independent third-parties including Harvard and SRI International. Lexia Learning, a subsidiary of Rosetta Stone, employs a team of PhDs who send their research out for peer review.

Recently updated federal guidelines have also raised the bar for efficacy evidence that educational services should demonstrate before public funds can be used to purchase them.

Duolingo made headlines in December when it raised $30 million at a $1.5 billion valuation, reaching the unicorn milestone just seven years after the company launched. While it offers courses in several languages, a big growth driver internationally is English language learning, where it competes with online providers Babbel, Busuu and Rosetta Stone.

As businesses have expanded globally through tech and business process outsourcing, English language proficiency has become an important path to economic opportunity. According to studies by the World Bank, in India, those fluent in English earn 34 percent more on average than those who are non-fluent, while in Nigeria, the English-language wage premium is 40 percent.

In emerging markets, English language proficiency is a core component of what many parents look for as they seek high-quality schools for their children. That demand has fueled the growth of multi-billion dollar, dual-language K-12 platforms like Cognita, GEMS and Nord Anglia in markets around the world.

Rising edtech expenditures and privacy concerns have caught the eye of regulators. A group of U.S. Senators recently requested 50 technology companiesincluding education technology providersto provide written responses to questions about student privacy safeguards. These inquiries come at a time when many believe the enforcement of federal education regulation is increasingly lax.

Edtech providers are as vulnerable as their peers in other industries. At a major cybersecurity conference last fall, an 18-year-old student detailed vulnerabilities he found in Blackboard, one of the most widely-used learning management systems in the country.

As U.S. edtech companies expand globally, they will also find themselves subject to stricter European data privacy laws, like GDPR. They may also find themselves at the mercy of sudden changes in national policies, such as the restrictions recently imposed in China on foreign investment in K-12 programs.

The Rise Fund has made investments across these themes, and as we enter the next decade, the correlation between educational attainment and economic opportunity will continue to drive the demand for tools and services that bridge these two goals. For investors and entrepreneurs who choose wisely, opportunities abound for attractive returns and impact through the power of education.

Continued here:
Education Is the New Healthcare, and Other Trends Shaping Edtech Investing - EdSurge

One of the largest utility companies in the U.S. Midwest, Ameren, has announced that it will spend $7.6 billion on a five-year grid modernization plan that includes installing smart meters for its more than 1.2 million customers, adding solar energy and battery storage in rural areas, switching to storm-resilient utility poles and wires, and purchasing 700 megawatts (MW) of wind power, Utility Drive reported.

The initiative, known as the Smart Energy Plan, is the latest expansion of Amerens green-energy push. The company, which serves homes and businesses in Missouri and Illinois, announced three years ago that it would retire more than half of its coal-fired generating capacity by the end of 2022. Ameren has already made substantial investments in green energy and energy efficiency programs in Illinois, starting in 2011. The new $7.6 billion program would focus on Missouri

The utility plans to install 120,000 smart meters in Missouri in 2020 and more than 800,000 by 2023, as well as web portals that customers can use to access their energy data, Greentech Media reported. Ameren also aims to purchase 50 MW of solar in Missouri by 2025 and 100 MW by 2027. Lastly, the $7.6 billion strategy includes spending $1 billion for wind energy in 2020.

Missouri currently lags far behind its midwestern neighbors in wind capacity Illinois has more than 5 gigawatts (GW), Oklahoma has 8 GW, and Iowa has 10 GW. As Ameren prepares to close some of its coal-fired power plants, investments in wind energy could help narrow this gap in electricity generation.

Amerens annual earnings have gone up in recent years since launching its green energy initiative in 2019, the companys net income was $828 million, up from $815 million in 2018, according to Utility Drive. The utility said the Smart Energy Plan could bring more than 3,000 jobs to Missouri.

The Smart Energy Plan means investment in state-of-the-art technology, equipment, and controls to reduce outages and restore power faster when they happen, Ameren Missouri President Marty Lyons said in a statement. Weve been able to continue our system upgrades and create significant jobs while lowering rates over the last two years.

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Major Midwest Utility to Invest $7.6 Billion in Smart Grid Technology and Renewables - Yale Environment 360

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The spread of the coronavirus helped to sink the Dow Jones Industrial Average more than 900 points when the market opened on Monday.

And if that decline goes past 1,000 points, it could be the biggest one-day drop since 2018.

If you're like many investors, you may be inclined to check your investment balances, including your 401(k), in reaction to the news.

Yet reacting to a sudden market fall is exactly what you shouldn't do, according to one expert.

"Volatility is inherently frightening," said Dan Ariely, professor of behavioral economics at Duke University and chief behavioral economist at personal finance app Qapital. "Being frightened means that we are paralyzed, we think about it too much."

"It influences our well-being, and it doesn't necessarily lead to good decisions," he added.

In 2008, when the markets were going crazy, Ariely found himself checking his own accounts more frequently as everything changed every half hour.

On a Friday morning, before a weekend away with his wife, he found himself consumed with checking his investments. And the compulsion put him in a bad mood.

"I wasn't going to sell," he said. "I wasn't going to buy; I was just kind of looking obsessively.

"It was about noon when I realized I was out of control," Ariely said. "I was looking too much."

Consequently, Ariely decided to enter his password wrong three times and lock himself out of his account.

"I couldn't check anymore, and the weekend was much nicer," Ariely said.

What's more, Ariely took his time before fixing his account so that he could check it again.

"If we're going to look at it going up and down, we're just going to be more miserable," Ariely said. "We're not only going to be more miserable, but act on it."

Those moves often include fleeing from stocks to bonds or cash investments with a higher expected value for those with a lower expected value.

"Historically, those are some of the biggest mistakes that people can make," he said.

Dan Ariely, behavioral economist and psychologist.

Photo: Mary R.

Checking numbers, too, often can make it more difficult to accurately interpret trends, according to Ariely.

Take weight loss, for example. If people look at their weight in precise measurements with decimals say 162.3 pounds they tend to create stories to make sense of what they are seeing. And the result is often that they become unmotivated, Ariely said.

If instead people look at their weight data in a less granular way, say how it trends over several weeks, they can more accurately see what is happening. Plus, they tend to get less anxious and take better care of their health, he said.

More from Invest in You: How this couple paid off their $300,000 mortgage in 5 years Here's the secret to multiplying your savings Save $1,000 without sacrificing anything you really love

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Avoid this investing mistake as coronavirus fears grip the markets - CNBC

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CLEVELAND (WJW) -- The stock market took a major hit this week and so did many 401(k) retirement plans.

No one is sure how the coronavirus outbreak will effect the economy and that has many investors nervous.

"If you get online this weekend and look at your account balance and it freaked you out a little bit, you might want to wait until we get a little bit of a recovery, and then re-assess your level of risk and see if you want to diversity it into some other things," said Jim Lineweaver of Lineweaver Wealth Advisors in Valley View.

The virus halted production and manufacturing in parts of China, but Lineweaver said that has appeared to stabilize. He said American biotech companies could actually see a "boost" as they race to come up with a coronavirus vaccine.

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Could the coronavirus outbreak impact your retirement investments? We ask the experts - WJW FOX 8 News Cleveland

Growing up in Wappingers Falls in the Mid-Hudson Valley, Peter Fortunato loved horses and came to Cornell in 1968 to become a veterinarian. That changed during his first year when he realized his vocation was to be a writer, so he transferred into the College of Arts and Sciences. Peter was also inspired by his art history courses with Peter Kahn, who encouraged him to keep making visual art. Then he met his life partner and eventual wife, the poet Mary Gilliland when they were both advisees of James McConkey, who became a lifelong friend.

Peter graduated in 1972, but stayed on an extra year until Mary graduated. He wrote poetry, read about Zen Buddhism, and began practicing meditation after being introduced by Mary to the writings of poet Gary Snyder and philosopher Alan Watts. He earned money by working at Cornells High Voltage Lab, doing yard work, and modeling nude in figure painting classes at Cornell and Ithaca College.

After winning a fellowship in creative writing at the University of North Carolina, Greensboro, Peter and Mary moved South. While writing and earning an M.F.A. in poetry, he and Mary also worked as models for art classes. They were in high demand because while meditating they could sit still for so long.Greensboro was soon to be known as Little Atlanta. However, we lived in the country, and since cohabitation was illegal in North Carolina, we had to pretend we were married. After graduate school, while waiting for clear direction, he and Mary took a BOCES Carpentry class and each continued to write.

With no fixed plan we accepted friends offer to return for a weekend to Ithaca: Gary Snyder is coming to give a reading. We can go to that and the reception! We both adored Gary, who remains our friend and teacher, Fortunato said. The reading and the party were fantastic and went on into the early morning hours. Before we crawled home, Gary had invited us and we had agreed to join him and his family in Nevada County, California in the foothills of the Sierras, where he and his friends were building a community school.

Mary and Peter loaded their 1965 VW Bus and drove to California. We practiced Zen and we helped build the school. We wrote poetry and savored life with our hero and his circle, living off the grid, off the beaten path. [...] We found ourselves in the midst of the Back to the Land Movement. [...] It was an exciting time.

Loving the uncharted life, Mary and Peter had many adventures before trekking back to the East Coast. They worked in the San Francisco Bay area doing carpentry and house shingling. And Peter would constantly write. After living for a time on a houseboat in Sausalito and then back in the Mid-Hudson Valley for a while, Peter and Mary eventually returned to Ithaca in December of 1977. They were confident they could live anywhere, make friends, and do many different things to make a living.

While continuing to do carpentry and occasionally working as models, Mary and Peter found other opportunities: Mary completed a Masters at Cornell, and they both began careers in academia. They bought a rundown rental house and turneditinto a spacious, bright retreat with room for two writing studio offices, and a meandering garden leading down to Six Mile Creek.

Peters first book of poetry A Bell or a Hook, inspired by his life in California, was published by Ithaca House, located at 108 North Plain Street. Baxter Hathaway and wife Sherry created and ran the publishing company. Baxter, a renowned author, was also founder of the Creative Writing Program at Cornell, so this reunion was especially dear for Peter, who had studied writing with Baxter as an undergrad. Marys first poetry collection, Gathering Fire, was also published by Ithaca House.

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As Peter began teaching creative writing, composition and poetry at Cornell and Ithaca College, he also continued his studies in complementary alternative medicine. For many years, he has had a professional counseling practicefocusing on hypnotherapy, shamanism and Reiki.

Mary, a well-known poet, joined the Cornell University faculty in 1981 and retired from her full-time work in 2007. Peter who had been teaching on East Hill and South Hill for almost 30 years, in 2005 took a position at the newly opened Weill Cornell Medical College in Qatar. Mary also taught there for a semester. Peter stayed on for four years.

The students were very sincere and engaging, he said. With tolerance and mutual respect, as the War in Iraq continued several hundred miles away, we learned from each other.

It takes something unique for two writers to make a good life together, and Peter and Mary have continued unabated in their creative lives. We have worked hard as two artists, seeking to find our way. We have created a special synergy as a couple, understanding that we each need space and time and quiet to create, yet loving and valuing the time we can spend together.

Peter's new novel Carnevale is full of references to his early life in the Hudson Valley, as well as to the sexy, psychedelic 60s. All are invited to Peters reading March 11 at 6:30 p.m. in the Tompkins County Public Library.And then we hope to hear Marys version of this couples wild story.

Ithaca is filled with treasurespeople, places, programs. Marjorie unearths some of these gems every other week here in her column, Community Connections.

Excerpt from:
Peter Fortunato and a winding path to writing - ithaca.com

My parents gave me a nickname when I was young: mini-Martha, named after my Type A, efficiency-obsessed aunt.

We shared common habits like filling our schedules with activities for self-improvement, and wanting vacations to be planned down to the minute.

Why then would I center my career around the idea of doing nothing?

It was an idea embraced by my first boss and one of the most innovative thinkers I know. We worked at a research and consulting firm, solving problems for Fortune 500 companies when it exceeded their capacity to do so.

A trained anthropologist, she taught me the art of ethnography: spend hours, even days, on end with little to no agenda just observing. Observe the typical life of a subject. Observe how customers naturally interact in stores, on devices, with their friends.

With ethnographylike a fish in waterthe more you went with the flow of the experience, the clearer everything became.

This method for being was a forced break from my hyper-planned daily life. But the more I saw results, the more I embraced doing nothing as the true way to innovative thinking.

Harvard Business Schools Clayton M. Christensen undertook a broad study on CEO innovation and arrived at this same conclusion:

Innovators engage both sides of the brain as they leverage the five discovery skills to create new ideas. Associating is like the backbone structure of DNAs double helix; four patterns of action (questioning, observing, experimenting, and networking) wind around this backbone, helping to cultivate new insights.

Harvard Business Review

Now, this is not to say we must shun the cult of busy entirelytaking idea to application often requires a different mindset.

But were so focused on being always-on, that much of the modern day business worldand the world in generalmisses the forest for the trees.

Were a society addicted to short-term results, a quantified and measured life (looking at you Apple Watch), and data that tells us the what but not the why.

The fact is that efficiency will hit a wall when we view it as a means and not an endflip the equation and see that the lack of structure (with bounds) is actually more productive than constant measurement.

This is something our clients realized and came to us for: A major gaming company hemorrhaging revenue among previously engaged consumers. A hyper-growth entertainment platform unsure where to best invest next.

In each case, we were approached for our outsider perspective and we, in turn, approached the problems without major pre-conceptions.

Zen buddhism had known about this trick of millennial, calling it beginners mind:

In the beginners mind there are many possibilities, but in the experts mind there are few.

Shunryu Suzuki, Zen monk

The new products we rolled out to clients, the improved storylines, the better user experienceall of these were birthed from doing nothing but observing.

Why?

We let insightful connections come to us. We do not logic our way into them.

This is why Netflixs recommendation engineas precise as it iswill never be as powerful as somehow seeing a truly random film and unexpectedly end up loving.

When we are intent on directing the story of our life at every moment, we end up with an uninspiring narrative where the past is always prologue.

The idea of true creativity can become elusive.

Walk down a random street and simply noticinga piece of street art, an interesting outfit, the way two strangers interact. No objective. Just wander.

When our self-directing mind has a chance to rest, we pick-up on more and we build a fertile foundation for creativity to strike.

Ill borrow another page from Buddhism on this one. In Zen Buddhism, great insights are learned through seemingly mundane tasks: meditate on a paradoxical Koan or just peel potatoes.

You want spiritual insight? Dont think about spirituality while peeling potatoes. Simply peel the potatoes.

Indeed, its healthy to give ourselves time with no set objective, but its also damn productive.

Thats the great irony for those of us (hand raise) naturally inclined towards goal setting and achieving, AKA Type As.

Give yourself a break and take a break.

I mean it.

It might just be the most useful moment of your life.

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Why Efficiency is the Enemy of Innovation - Thrive Global

This time itll be different.

What do you mean?

Exactly what I said; in the past I wasnt willing to do what it takes. But this time I mean it. This time, Ill get there.

What are you going to do differently?

I dont know if I really need to anything different. I just need to stay focused.

Why will you stay focused this time when you didnt the last three times?

Ill just do it. I mean, I really want it.

Didnt you want it before?

Yeah, sure. But I wasnt willing to do the work. I gave up too easily.

I see. So how do you know you wont give up again this time?

I know me. Now, I really need to do it. My doctor said that if I dont, Ill be in trouble.

I thought she told you that last time too.

She did. But I dont think I was ready. I had too much going on. Life was busy, you know?

Yes, I do. So, your lifes not busy now?

Well, no, it still is. But this time Im ready. This time Ill just find the time.

Where? What will you give up to find this time?

Im not sure I really need to. I just need to work smarter and stick with it.

Why will you stick with it this time when you didnt the last time?

Thats easy. Because this time I mean it.

You didnt before?

Sure, I did. But, I didnt really, really, really mean it. Now I do.

Good luck.

How often have you made the same promise over and over? How many of ended up exactly like the others? Detect a theme? As they say, If you always do what youve always done, youll always be where youve always been. Should you prefer a better visual, how about, When you get tired of walking into walls, open a door. Or, if you want to add a bit of the cosmic to it: The Universe will not change its rules to accommodate our whims, fantasies, or desires.

Changing a habit, whether that means quitting smoking, exercising more, or even having a better attitude; requires an understanding not only of what you want in the end, but why youre not already there.

As a habit-change primer, I offer theFour Assumptions of Success(in nor particular order). Understand and adopt these, and change comes easier and is more likely. (These are based on NLP, Neuro Linguistic Programming; which Wikipedia describes as apseudoscientificapproach to communication, personal development.)

1) Every behavior is generated by positive intention.

Even what we call bad habits are born of the goal of making our life easier, healthier, or happier. As example, smoking although obviously not a good thing to do has the positive intention of reducing stress. Sadly, the side effect of the behavior is it harms your health. Identify the intention of the behavior youre trying to change and work to find a new way to accomplish it, leading to

2) There is always another choice.

It might not seem like it but there is another option. Continuing with the same example, I could reduce stress by meditating or exercising. I might not want to or I might not like the options, but if I ask how do I get the results I want? Instead of why do I have to change? A path will make itself known.

3) There is no such thing as failure, only feedback.

Simply because we didnt get what we expected doesnt mean we failed. Labeling something as failure, generates within us the urge to quit. After all, if its not working, why would I continue to pursue it? To get past this barrier, look at the results you get from your actions in the same way that a scientist would conduct an experiment. See what worked and what didnt. Alter the course and move forward.

SaidPaul Batalden, active Emeritus Professor of The Dartmouth Institute, Every system is perfectly designed to get the results it gets. In other words, if youre not getting the results you expected, its not that the system is broken, rather youre using the wrong system. Tweak it.

4) You have all the tools you need to accomplish whatever you want.

No one is born onto this planet doomed to failure. We all have skills and strengths to move us toward whatever we need. Sometimes, however, its important to realize that the tool we are using might be inappropriate for the results we desire and the correct tool might be the willingness to reach out and seek advice.

Scott Q Marcus is a nationally known weight loss expert for baby boomers and the CRP Chief Recovering Perfectionist of http://www.ThisTimeIMeanIt.com. His new book, co-written with his sister, The Busy Baby Boomers Motivational Guide to Weight Loss is at http://www.BabyBoomersGuides.com.

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The assumptions of success - Red Bluff Daily News

Executive Summary

Up to 85% of big data projects fail, often because executives cannot accurately assess project risks at the outset. But a new research project offers some guidelines and questions to ask yourself before launching a new big data initiative to help predict its success. Access to data is obviously a precondition for any initiative focused on data-driven growth. However, not all available data is useful, nor is it unique and exclusive. Moreover, not all data is available. The question executives need to ask is Can we access data that is valuable and rare?. If the answer is yes, you then need to ask: Can employees use data to create solutions on their own? and Can our technology deliver the solution? And finally, Is our solution compliant with laws and ethics? Little value can be created if your solution breaks the law. Moreover, if users think of the solution as creepy, you might face a media backlash. Try this structured approach to predict the success of your next big data project.

Big data projects that revolve around exploiting data for business optimization and business development are top of mind for most executives. However, up to 85% of big data projects fail, often because executives cannot accurately assess project risks at the outset. We argue that the success of data projects is largely determined by four important components data, autonomy, technology, and accountability or, simply put, by the four D.A.T.A. questions. These questions originate from our four-year research project on big data commercialization.

The components needed for success with big data can be positioned along two dimensions: (1) the focus of the activities (the projects ideation or implementation such as coming up with an idea for a big data project versus actually implementing the project) and (2) the focus of the transformation (digital backbone or getting peoples support such as building the IT-architecture needed to create a sufficient digital backbone or making sure that employees can and will apply data and that this application is in line with societal opinions on what should and should not be done with data). These two dimensions create a matrix of D.A.T.A. components and the key questions executives need to ask when contemplating new big data projects, as seen below.

The figures below provide an overview of the D.A.T.A. components, the related questions, and the rationale behind them as well as examples. Moreover, the table demonstrates the sequence in which the different aspects should be considered in data projects. In the following, we provide an in-depth outline of each component.

Data: Access to data is obviously a precondition for any initiative focused on data-driven growth. However, not all available data is useful, nor is it unique and exclusive. Moreover, not all data is available. The question executives need to ask is: Can we access data that is valuable and rare? Only when these criteria are fulfilled can executives hope to gain a temporary competitive advantage based on data.

Consider the Danish social fitness-tracking app Endomondo. In 2015, the American athletic apparel company Under Armor bought Endomondo for $85 million in an attempt to build the worlds largest digital health and fitness community. Endomondo had more than 20 million users and over 80% of them were located outside the United States. Hence, Under Armour expected the acquisition to not only provide access to data that it considered valuable and rare, but also to give the company immediate scale and increased international presence, as stated in the press release. The very price that Under Armor was willing to pay illustrates the value that it assigned to Endomondos data. Consequently, data is becoming a resource that increases in commercial potential with its user value and its uniqueness in the marketplace.

Autonomy: Autonomy, or decentralized decision-making, gives employees a mandate to come up with ideas for data-enabled solutions that they can initiate on their own. It is an essential step in the ideation phase, and it similarly deals with the human component of digital transformations. In this regard, the question executives need to ask is: Can employees use data to create solutions on their own? Unlocking the commercial potential of data requires the engagement of many people from multiple levels and departments.

Google serves as an example of this key component. Google has long been famous for allowing decentralized decision-making and for making dedicated resources available for initiatives across the organization. Google has 20% time, where it allows engineers to work on projects of their own choosing 20% of the time. Moreover, Google makes its computing resources and data available to its engineers 20% projects. One project that originated as a result of the 20% time policy and that made extensive use of a variety of data was Google Now (a mobile assistant that proactively delivered information to users based on search habits). Although Google Now no longer exists, the underlying functionality is still used. Autonomy is not only important for creating and launching new initiatives, but also for learning and for adapting existing processes. Consequently, employees need to be able to use data to initiate, create, and adapt their own solutions.

Technology: Technology is similarly essential for success with data. It comprises an important first step in the implementation phase as well as an essential component for the digital backbone. Here, the question executives need to ask is: Can our technology deliver the solution? You can have all the data and ideas in the world, but if your technology can only deliver a prototype, a beta version or non-scalable volume, no real value will ultimately be created for your firm.

An example of the importance of technology is illustrated in the blockchain collaboration between Maersk and IBM. Maersk had long wanted to streamline and simplify the administrative hurdles of global trade. However, it was unable to do so before the emergence of blockchain, which provided the technical backbone to create a solution to the problem. As Maersk arguably did not have the needed blockchain capabilities in-house, it partnered with IBM to create Tradelens, a global trade platform designed to minimize costs and increase the transparency of global shipping. In other words, enabled by blockchain technology, Tradelens digitizes the global supply chain and provides information to all actors. Consequently, it is necessary for any data-enabled solution to have sufficient technology to deliver it.

Accountability: Accountability refers to obtaining both regulatory and societal permission for your data solution as well as being able to demonstrate this compliance. It comprises an important step in the implementation phase and is an essential part of the human component of digital transformations. The question executives need to ask in this regard is the following: Is our solution compliant with laws and ethics? Little value can be created if your solution breaks the law. Moreover, if users think of the solution as creepy, you might face a media backlash.

The impacts of neglecting accountability can be seen in the Facebook/Cambridge Analytica scandal. As shown in the Netflix documentary The Great Hack, Cambridge Analytica harvested personal Facebook data to identify and target persuadables (i.e., people likely to be persuaded by certain messages) with the aim of changing their minds in the 2016 U.S. presidential election. The argued misuse of personal data raised questions from both legal and ethical points of view. The case has had severe implications for the parties involved, and it has made both users and lawmakers more aware of the legal and ethical challenges of data collection and usage. Consequently, no solution should be expected to become a long-term success if it is not compliant with the law, societal ethics, and norms.

As you have probably noticed, these D.A.T.A. questions ask for simple yes/no answers. This means that you can determine the likelihood that your next big data project will be a success by tallying your answers to the questions. In other words, if you answer yes to three questions and no to one, your project has a score of 3.

Use the table below to score your next project. As is evident from the table, you will need a score of 4 to be confident of success with your data project. A score of 3 means that the project still requires substantial work in order to succeed, as all four components are essential for big data projects. Consequently, you can think of the components as need to have rather than nice to have.

An example illustrates the necessity of all four components. Facebook has unique and valuable personal data, such as data on users relationship status. In fact, Facebook is able to accurately predict whether a given relationship will last. While this may comprise unique and valuable data (yes to question 1) that Facebook employees are free to build solutions around (yes to question 2), and even though Facebook has the technology to deliver such a solution (yes to question 3), such a solution would seem slightly unethical to most people (no to question 4). Therefore, such a project would be assigned a score of 3, as critical work on accountability is required for it to be successful.

Big data projects are arguably in need of a more data-driven approach to predicting their success. While expectations regarding the business potential of big data are astronomical, returns have thus far been weak. Part of the problem is arguably that executives do not know how to predict the success of data projects, as few structured approaches to doing so exist. With our D.A.T.A. framework, executives can finally start to make data-informed decisions on big data projects.

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Use This Framework to Predict the Success of Your Big Data Project - Harvard Business Review

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Its fascinating how indignant people can get when other people lie about things, yet they readily accept the lies that they tell themselves all the time. Think about it. People respond with things like how dare you lie to me or we cant have a meaningful relationship if you lie to me, but then these same people are perfectly fine with how often they lie to themselves. When you constantly lie to yourself, you chip away at your self-confidence. And the more you allow yourself get away with it, the less likely you are to ever create the different life or career success that you say you want.

The great big lie that destroys career success is the lie people tell themselves about how they dont have choices and are unable to create a fulfilled and successful career. When we dont like any of our choices, we sometimes complain that we had no choice at all, and that is the saddest thing in the world. When we dont want to grapple with the negative consequences that come with choices, we complain about how unfair all the consequences are.

People blame their career failures on a lack of choices or options in life. But the truth is that the reason most people stay stuck in jobs they hate isnt because they dont have any choices; its because they dont like the choices they have because all choices have some kind of change or cost attached to them. People dont like that they have to give up something to make something else better happen. They dont like the risk and uncertainty of their options, and so they end up showing that they dont have the courage to make any choices. Hence, the status quo holds, and they never experience career success. It simply becomes easier to say that they dont have any choices rather than face the fact that they do have some but are afraid to make the change.

By falling for the big lie, people get to complain about their lives and careers and act like everyone else somehow has it easier than they do. They get to play the victim and sometimes become miserable about life. Again, Ive observed that people become most angry and upset when others lie to them, but yet they find it way too easy to lie to themselves on a regularsometimes dailybasis, seemingly without consequence. Here are some examples:

You name it. We have all kinds of plans for the things we need to do to get to that next level in our careers and have sustained career success, but too often these things end up as no more than lies.

Career fulfillment cant be achieved when people lie to themselves about how they will do something different to experience career success, but dont. This means that you have to get real with yourself about what kind of life and career you truly want and then face yourself about what you are willingor not willingto do to make it happen. You have to get real with yourself about whether or not you are willing to pay the cost to experience your desired life and career.

Dont ever get fooled into believing there isnt a cost (a trade off of sorts) on the path to success. Happiness has a cost. Peace and joy have a cost. And yes, life and career success have a cost. If you arent happy with where you are today, you arent going to just wake up one day happy. If you work a job that you hate, you arent going to suddenly start loving it. The great truth about lying is that we lie to ourselves more than we lie to anyone else, and too many of us find it completely acceptable to do so. If you want a better life and a better career, then take note.

Among other things, you eventually stop believing in yourself. How does lying to yourself make you feel? How do you hold yourself to account? Do you ever make repairs on yourself, and if so, what are they? What does it do to your psyche? How do continual self lies and lack of accountability impact your ability to actually follow through to sustain personal or career success?

As you journey through your career, you will have several different discussions and conversations with several different people, but be absolutely clear that the most important conversation you need to have for career success begins and ends with yourself. If that conversation starts and ends with you lying to yourself, you will continue to be unfulfilled in your career.

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The Great Big Lie That Will Destroy Your Career Success - Forbes