OPE: No Greater Leverage

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If you study financial success books on investments, you will likely come across the terminology “OPM.”  It stands for other people’s money.  The idea is to start with nothing, but use other people’s money to become fabulously wealthy.  Widely used in the real estate world, this concept of financial leverage and OPM is often hyped on infomercials.

How does it work?

You want to buy a rental property, but you don’t have the money.  You put down a small amount and finance the rest from the bank.  Let’s say you buy a house for $100,000, but you only put down $5,000.  When the price goes up to $150,000 and you sell the house, in addition to the rental income you earned, you pocket $50,000.  In simple terms, the magic of OPM is that you made $50,000, but you only used $5,000 of your own money (if anything at all!).  That’s an extraordinary return on your investment.  Obviously, given the housing downturn, many people are realizing that the $100,000 home doesn’t necessarily become $150,000 and could end up at $50,000.  That has been a painful lesson to many, but the OPM concept is still a valid approach.

My entire life has been spent studying a different type of leverage—one leveraging not other people’s money, but something much more valuable.  And its value is always there and cannot go down.  In fact, the more it is used, the more it goes up in value.

What is it?

What’s Your Skin Type?

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Most of the time, you will see leadership advice admonishing younger managers to be thick skinned.  Ditto for advice to new authors, songwriters or anyone in the public arena.  The mantra never changes:  Have a thick skin.

Any leader will tell you that you cannot be too sensitive.  There are always critics.  No matter what your intentions, you will find that some people will respond negatively.  That’s just human nature.

But everyone reacts differently to criticism.  Believe me, I’ve had my share.  Some of it is mean or misguided, so I ignore it.  Some of it is hilarious, so I keep it to laugh.  And some of it is true and points out a weakness, so I keep it to learn.

Listening to the toughen-up directive always made me wonder.  It’s a common mantra, but what do you do with that advice?  Is there an emotional gym to strengthen our ability to ignore criticism?

Why the Little Things Matter

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Not too long ago, a major power outage affected millions of people in Arizona, California and Mexico.  Two nuclear reactors were temporarily shut down.  Traffic backed up for miles all over the area.  Cars collided as frustrated drivers navigated without traffic signals.  Airports were shut down, stranding passengers.  Happening on an incredibly hot, triple-digit-temperature September day, the power outage knocked out much needed air conditioning.  It left people stuck in elevators.  Even the outdoors was affected.  San Diego beaches were closed when almost two million gallons of raw sewage spilled, a result of the water pumps failure at the regional station.  The failure continued to wreak havoc days after it was resolved.

Why did all of this happen?

What Was So Great About Catherine the Great?

Catherine the Great was by any definition a political success story.  Baptized Sophia Augusta Frederica, she rose from a young German girl to later take the name of Catherine II and become the most powerful woman in the world.  Moving to Russia at just fourteen years old, with no knowledge of the language and no hereditary claim to the throne, she later ascended to power in a coup.  The people of Russia loved her and she became one of the greatest benevolent despots ever known.

How she achieved such power is a fascinating study in leadership whether you agree with her methods or not.  Robert K. Massie now chronicles her extraordinary life in his new book, Catherine the Great.  Massie is a superlative author, historian and biographer.  He won the Pulitzer Prize for Peter the Great:  His Life and World.  His many books are loved for his ability to bring his characters to life.

What were some of the personal qualities serving Catherine’s goals?

Finding the Needle in the Office

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What needle?

The expression “moving the needle” first appeared in England during the industrial revolution.  The reference was to gauges on steam engines.  During World War II, it became a more common term in reference to aviation gauges.  In business today it’s synonymous with making progress.

I’ve seen three major types of people in business.  One person can describe the needle, the other can move the needle, and rarely someone can do both.  What do I mean?