As we celebrate the achievements of Olympic and Paralympic athletes it is interesting to think about how they have achieved their success.
It seems to me that there should be parallels with the business world and, in particular, my area of interest, financial modelling.
FOCUS
No one can doubt the single-minded focus of these successful athletes. Concentration is paramount and distractions are kept to a minimum (for example, there was a self-imposed social media ban for the hockey teams). So why don’t the same rules apply to us mere mortals in the business world?
According to Tony Crabbe’s excellent book “Busy”, on average we are interrupted by an email every 5.2 minutes. We may feel that we are being productive when we are answering those emails, but actually we are achieving very little of value. Multitasking drops the performance of a Harvard MBA to that of an eight year old and makes us 40 per-cent slower.
REST
No one would expect Andy Murray to play in the Olympic final on three hours’ sleep. So why in the corporate world (or in the training room) do we imagine that people can perform effectively when they are sleep-deprived? A recent McKinsey study highlighted research that after 17-19 hours of wakefulness, “performance is equivalent to a blood alcohol level above the legal drinking limit.”
And it’s not just about sleep. Taking proper breaks during the day is also important. I find that a 45 minute lunch break during training (with no alcohol and away from computers) leads to a far more productive afternoon of financial modelling than when people eat a sandwich at their desks.
Running my UK training courses in Bournemouth means easy access to the sea front. According to Tony Crabbe, research shows that a stroll on the beach significantly improves our cognitive performance, whereas a city walk does not.
I have also noticed from 20 years of training that it is counter-productive to work too late or to model complex issues at the end of the day when brains are tired. Part of the challenge of training is to identify the correct time of day to introduce certain topics – never tackle tax after 5pm!
PRACTISE
Elite athletes acquire new techniques and then practise them repeatedly (see Malcolm Gladwell’s Outliers for his 10,000 hours theory). Similarly financial modellers need to learn and practise time-saving fundamental skills, for example shortcuts, efficient formula choice and model structure. Then these basics then become automatic and part of subconscious thought, freeing up the brain to move on to more complex modelling issues.
THINK
“If I had an hour to solve a problem, I would spend 55 minutes thinking about the problem and five minutes thinking about solutions” Albert Einstein
In our world of instant gratification and responses, the art of thinking seems to be disappearing. A recent survey found that 58% of office workers only spend 15-30 minutes per day thinking and 30% are not thinking at all.
Just like any athlete taking time out to find inspiration, similarly financial modellers need to think about the problem they are trying to solve, rather than rushing to a quick fix solution (unnecessary iterative macros spring to mind). And we should never stop thinking, learning and adapting. Perhaps unsurprisingly, I seem to get the most inspiration on knotty modelling problems whilst walking the dogs.
So the next time we are contemplating an Olympic final or a financial model, let’s remember to focus, rest, practise and think.