Practical Leadership – Clear Direction

One of the key tasks of a leader is to provide clear direction for the path to be followed. Otherwise followers have to guess where they need to contribute their time and effort.
For direction to be clear, it needs to be communicated and kept up-dated in terms that each follower can understand. In today’s complex changing workplaces, with many competing priorities, providing clear direction is fundamental to effective leadership.
Most people want to do a good job and want to make a contribution to their team and organization. But they are often unsure of what is the best use of their time and effort.
Most organizations have Corporate Plans and strategies to achieve corporate goals. But how each organization member needs to contribute to the implementation of these strategies is rarely clear. Usually each person is left to identify their contribution and use their best endeavours to do what they believe needs to be done. This an incredibly inefficient high risk way to work, but unfortunately it is the norm.
The major problem with leaving it to people to work out how they need to contribute, is that in today’s workplaces, people are usually asked to do more work than is physically possible. So they need to decide what they will do, and what will get done if more resources (mainly time) become available.
Consequently there is a high risk that contributions to important strategic tasks will be sidelined by urgent, but less important, tasks. This adds to the likelihood that strategic tasks will not be done due to inadequate direction and accountability.

"Timing the market" is considered by many to be a foolish exercise. Timing the market is indeed foolish if it is done the way many seem to think it is done. However, it is really a matter of having a good sell strategy or stop loss system coupled with a good buy strategy. Expert timers do not buy because they feel a stock is a "good" one to own, or sell because they feel it is "high." They buy because there has been a buy signal, and they sell because there has been a sell signal.

Some writers in the financial media color their articles with their own uninformed opinions rather than search out the facts. Let me give you an example of what I mean. In a recent well-known financial publication, a widely followed writer wrote about "market timing" and said that it has taken on a new meaning that differs markedly from the original meaning of the term. The term "market timing" has been used in reference to how some individuals trade mutual funds by illegally locking in an unfair price advantage and profiting on small pricing gaps between markets in different time zones. The writer mentioned above informed the reader that in the original definition, market timing involved shifting money into cash or bonds when the investor thinks stocks are overpriced and moving back into stocks when he or she thinks they are cheap. This author was correct with regard to the changing of the definition. However, he then went on to say what he thinks is wrong with the original timing concept.

The problem is that he leads his readers to assume timing decisions are based on what the timer "thinks" about the market and economy and what he believes "ought" to be the influence of such an environment on investments. This indeed appears to be the way most amateurs and some under-performing professionals practice "timing." Fund-provided data does show that there is more money flowing into funds at market highs and more withdrawals at market lows, reflecting how most people attempt to "time" their investments. This does show that, as a group, they are almost always wrong. In fact, that's why there is such a thing as a "contrary market indicator" based on what the small investor is doing. It is an odd-lot volume indicator based on the fact that the small investor tends to increase his buying at the highs and increase his selling at the lows. Therefore, when there is mounting odd-lot buying (individual investors are "feeling good" about the market), professionals view it as a warning signal of an impending market downturn.