Handling Workplace Diversity
With current measures of $4 trillion and estimates of $5T and higher, the foreign exchange market is the largest and most liquid market in the world. As such, it also attracts a large diversity of participants with differing ethnicity, nationality, and needs. Since macroeconomics plays a major role, the respective outlook of each region is considered when making various business decisions which can range from which nations currencies to buy or sell to safety and diversity of funds in case one nation’s currency fails. Assets can and should be diversified between stores of wealth to include currency from various nations as well as precious metals and other commodities. Diversity in this industry should be sought after rather than just dealt with as its encountered. A current example involves the upcoming revaluation of the Iraqi Dinar. By knowing a middleman contact inside the country or having actual foreign accounts there you stand a reasonable chance of actually profiting from it instead of being scammed in the midst of all the hype. Other advantages include being able to acquire overseas company registrations and accounts with personal economic connections to overcome burdensome local government regulations.
The most prominent advantage to working with a diverse work force is the availability of specialized skills. While I will take advantage of programming resources from Russia and Panama, I will also garner trading expertise from Venezuela and Denmark. Where language barriers exist, there are already translation technologies available to help bridge the understandings. With global communication infrastructures growing larger and faster, we can be in touch instantly by collaborating real time through video and and virtual tools such as desktop sharing. At the same time I can be chatting with a trader in Turkey, sharing a chart with another in London, and placing market orders on a currency from Asia while viewing instant economic reports out of Europe. To become more aware of the inter-related effects each nation and culture has on the others, a sound grasp on geography, economics, and even psychology will be helpful.
Where the world appears to be headed next is towards a regional governing model similar to the United States and the European Union beginning with the Arab and Asian regions. The first step is noticeably by sharing the same currency to achieve economic stability. Beyond this we also have institutions growing in power such as the International Monetary Fund utilizing the Special Drawing Rights as a global reserve currency and the G20 with the stronger voting rights of the emerging economies. These will continue to change the face of the foreign exchange market and prompt eventual differing instrument choices.
Personal Communication Style
From the identification exercise I found my communication style to be primarily an intuitor which made sense due to my creativity, intellect, and idealism but it was disheartening to see the negative traits included as being fantasy-bound, impractical and overly theoretical. Secondarily, I was identified as a senser which includes being decisive, assertive, technical, and results driven but also can imply being impulsive, aggressive, lacking trust, and self-involvement. Although I scored thirdly as a thinker, I see these traits most in myself which includes being exact and precise, deliberate, and one who weighs all alternatives, along with the negatives of being a nitpicker, rigid, and indecisive. What I scored the least in falls in the category of being a feeling which includes being caring, conscientious and persuasive, along with the negative traits of being wishy-washy, guilt ridden, and manipulative.
Armed with this knowledge, I should be better equipped to recognize when my behavior is displaying the wrong traits and then correct it to maximize my performance. One aspect that stood out most to me was the lower total in the Thinker category when exposed to stress. I do find solutions to problems come easier when I can take a break from them.
An area where I see improvement is required involves assuming the parties I am communicating with has the same perception and knowledge that I do or will express a similar opinion on the best way to deal with any particular situation. Regardless of whether they heard and understood everything I was communicating to them, I need to remain aware that they could and probably are interpreting the message from their own standpoint and determining a course of action that reflects their own values and not necessarily my own regardless of what is stated in my company’s mission statement.
An example of wrong communication involved my attempt to open a business checking account. When I stated the nature of my business as a commodity pool operator, I expected its financial aspect to be readily understood and accepted by a like institution. Imagine my surprise when after explaining thoroughly the exact definition of the processes as it related to the retail foreign exchange industry, the concept still remained uncertain and a fear or participation replaced what I expected to be an accepted opportunity. What caused me the most consternation was after indicating I planned to move large amounts of wealth through this banks services and having chosen them due to my ethical value that its corporate headquarters was part of the our local tax base, that they even refused my attempt to fill out an application by indicating the nature of my business would present too much work on their part to monitor. Regardless, I was left to bank across the street where I received an account within an hour after completing an anti-money laundering survey.
Decision Making
The first barrier to effective decision making is the omission of risk or opportunities or environmental data through complacency. The second is discounting risk or opportunities or the need to act by defensive avoidance. The third is panic by attempting to frantically solve a problem and the fourth is not deciding to decide to accept the challenge or the need to make the decision.
My own personal decision making style often reflects a blend of strategies that have not necessarily been properly fitted to the tasks at hand. While I would prefer and also enjoy utilizing the creative process which allows both creativity and innovation, I have often found myself being susceptible to the intuitive approach from taking the reported opinions of others as facts instead of the optimizing approach which I most commonly resort to for decision making since given the time it allows me to fully understand the alternatives.
What I need to avoid is becoming weighed down with the decision itself or being mired in it to the point of missing the opportunity that was presented or increasing the damage which the decision was intended to avoid. In my profession of trading, sometimes decisions must be almost mechanical or instant in order to lock in profits or avoid what could become catastrophic loss. Intuition can be helpful as long as it stems from adequate experience but allowing emotions to control the process will usually result in certain ruin. Once the time has been taken for proper analysis, the results need to be trusted and relied on in the heat of the moment when the proper decision needs to be performed. It can at that moment, be too easy to allow fear or the influence of greed to dictate the decision.
Many times I stand satisfied that even though I didn’t make the best decision, the decision that I did make was determined by following my preset procedures, rules, and policies. In retrospect, this then allows me to review those aspects and determine if a change would result in consistently better results. A case in point recently involved a decision to close a trade due to the accelerated rate of profits it was producing. Although the price still continued further in my favor after closing the trade, I felt exonerated when the price collapsed back to what would have erased almost all of the profits. Needless to say, had I remained in the trade as my rules were dictating, I would have amassed three times the profit I did realize by now with the possibility of further upside potential. What resulted after realizing this unforeseen error was a simple change of a single word within the rules which will potentially allow me to psychologically accept the same conditions in the future without jumping to irrational conclusions.
Personal Code of Ethics
I feel following this code of ethics would be required to ensure the success of the company. It outlines the core principles demanded by both regulators and clients. By adhering to them, a greater probability of both acquiring and retaining clients exists.
I. Honesty
A. Adherence to the law.
1. Commodity Futures Trading Commission Licensed
2. National Futures Association regulated.
3. State licensed entity
B. Selling and marketing practices
1. Better Business Bureau certified
2. Transparent/regular performance reporting
3. Industry fee and percentage structures
C. Non conflict of interests
1. Principal trades mirror clients
II. Quality
A. Research performed in-house
1. Technical analysis methods deployed
2. Fundamental analysis of data
3. Market sentiment consideration
B. Documented trading strategies
1. Sound money management principles
2. Disciplined market entries
III. Financial reporting
A. NFA/Dodd-Frank regulation compliance
1. Regular reporting performed
2. Client records compliant and archived
B. Complete tax reporting of gains and losses
1. Detailed trading statements archived
2. CPA tax preparation
Social Responsibility Plan
Social responsibility will remain an important factor of my business plans. Inclusive of this will be my immediate and extended family as a primary social sphere to ensure they can enjoy both the benefits derived from it’s success and even extend them as a sense of security into their own family lines. At the very least I expect to be able to provide the local public employment through the use of products and services but I expect to participate in and even create community projects with the intent of providing the opportunity to achieve a better quality of than what is possible given the area’s existing resources.
I realize the aspects which influenced my ability to gain the skills required for performing my businesses’ functions has its roots in what I was exposed to from additional program funding in public education. Along those lines, if our communities let alone our nation is to remain competitive in this new global marketplace, we will need to ensure access at any means to the information and technology required to produce innovation. The answer to the current problem of high unemployment which resulted from over capacity will be solved by investing in the training of new skills and fostering the ability to create and engage in new ideas.
As such, I see social responsibility as it relates to my business not so much as environmental protection but more along the lines of human protection. Through education of those willing to show the effort for achievement, the effects can be magnified as those individuals and groups become higher production forces and create additional needs for good and services of their own through the simple act of producing. Granted, the following acts of consumption can also have adverse effects on society and the environment but these can also be mitigated through the same route making education available.
I expect this process can be supported through grants and scholarships but I would intend to take it a step further which actual direct management of the offered resources instead of just handing them out for the possibility to be mismanaged. This can be a simple as selecting specific technology to be donated to an institution or as complex as creating and operating the facilities themselves. While I recognize this is not a novel approach to the solution, I perceive it is one that has been underutilized and unfortunately labeled as someone a problem belonging to someone else.
Our economy saw much growth potential as industrial but as time went on shifted to one more service oriented. Both of these aspects have since shifted to other nations due other conditions which those governments created. What we now are primarily left with is a knowledge based economy which has sadly been unsupported to a great extent.
Mission Statement
To continually extract copious amounts of wealth from global financial, commodity, equity, security, and derivative markets. This will be achieved through sound risk and money management while utilizing predictive technical and fundamental analysis with respect to market sentiment. Clear and precise policies, procedures and rules will be followed which dictate trading parameters including intermediaries, markets, instruments, risk, exposure, entries and exits.
SWOT Analysis
A. Potential Internal Strengths
1. Proven proprietary trading strategy
2. Technologically advanced
3. Specialized trading methods
B. Potential Internal Weaknesses
1. Discipline
2. Programming skills
3. Economic and political experience
C. Potential External Opportunities
1. Low barrier to entry
2. Client waiting list
3. Unlimited income growth potential
D. Potential External Threats
1. Lack of adequate local services
2. Government regulation
3. Political market intervention
Major assumptions include current performance projecting towards and improving as future performance along with the ability to scale size without affecting performance. Environmental trends facilitating this plan include the evolution of free trade and emerging markets along with technological advancements in automation and communication.
The most difficult part of my plan I expect to achieve is automation of the strategies. With a myriad of possibilities, it can be challenging to define precise rules that model every situation and then to maintain them as markets evolve.
10 Year Plan
I. Objectives
A. Amass client accounts ( 1 - 3 Years )
1. Display performance
2. Create and operate an exempted commodity pool
3. Achieve CTA license
a. Pass series 34 exam
b. Pass series 3 exam
c. Perform background check
4. Assume NFA regulation
5. Acquire Percentage Allocation Money Manager account
B. Automate strategies ( 3 - 5 Years )
1. Enlist programmers
2. Perform statistical probability analysis
3. Utilize quantitative fundamental analysis
C. Expand Operations ( 5 - 10 Years )
1. Recruit traders
2. Add instruments
3. Add markets
4. Provide larger facilities and staff
5. Repeat
D. Assume total exposure ( 10 years + )
1. Eliminate clients
2. Break the markets
3. Setup trusts
4. Liquidate remaining holdings
Primary goals will be necessarily completed in order before the next one can be achieved. Objectives will mostly be performed, expanded, and evolved as needed.
Team Creation
Team creation within my organization will carry with it some expected inherent risks. These can include fraud and embezzlement on many levels so as such, not only will extensive due diligence need to be performed with each member’s selection, but will also need continual review and monitoring to ensure they have remained trustworthy. This can pose some potential for some delays in team building as well as making it harder to fit the resulting team members together. The harsh reality is a dearth of this industry’s participants possessing the basic value of honesty. Coupled with the necessary requirement of recruiting specific skills from a global workforce, it can become challenging to examine backgrounds and character.
The industry norm of course is to rely on references and background checks but an additional proposal to this undertaking could involve simply asking some more pointed questions or providing a carefully crafted interview which delves into the psychological makeup of the individuals to discover these traits and potential for unethical behavior.
I would expect as well to take a personal interest in the team’s individuals as much as possible to ensure their needs were continually met and develop a two way trust. The bottom line is that trust is earned with loyalty as a result so the importance lies in providing and maintaining an organization which promotes such values. While this seems like a dream in comparison to the corporate environment that has evolved, I think we could all stand to take a lesson from the early companies who personally supported their employees instead of treating them like a number.
Basic Leadership Style
I tend to be a theory Y person who is ambitious and as an idealist, I like to believe sometimes to my detriment that the world around me is all made up of theory Y individuals as well. I realize that reality proves different however, so although I try to take this into account, I tend to gravitate more towards and am able to better affect those who share my attitudes.
I have seen myself operate in various style of leadership over time yet I mostly lead with a democratic style. I never suppose that I have all the right methods so I prefer to remain open to others discoveries of a better ways. Where I think I most fall back on a autocratic style is when I’m presented with untried opinions which in themselves can have ulterior motives. I also tend to lean that way due to sometimes lacking proper communication which prevents a democratic situation from existing.
Where I think I draw the line on the democratic style is before it takes on a life of its own and the members attempt to usurp authority from their feelings of empowerment. While delegation of authority is important, it also needs to align with a structure that insures the original objectives are effectively worked towards instead of new ones being produced which do not share the same goals.
Managing Conflict and Stress
Conflict is ultimately expected in my realm of business due to the high levels of stress encountered by the individuals. This is produced by the lack of control encountered in the marketplace and the heightened sense of responsibility encountered from managing large sums of capital. Each individual can be affected differently depending on various personal attributes such as how they value their own performance or whether they take individual successes of failures personal. Offsetting the buildup of stress by providing or encouraging healthy methods of releasing it can assist in avoiding blowups and burnouts. I have typically suffered more from the resulting burnout but have on occasion been subject to blowing up and venting it upon someone else which can create the conflict. Placing people together who are subject to the same forces without release can just be asking for explosive conflict.
I won’t even go into the many unhealthy ways traders cope with their stress but their tends to be a high washout rate in this profession. Accepted statistics place the beginning failure rate at 85% with some estimates even higher. Yet the potential for success continues to draw more into the markets all the time as is necessary due to its zero sum nature since every trade needs to have other side to it and every win is offset by the loss of someone else. The ability to control these losses can naturally go a long way in reducing the amount of stress experienced. Other than that, the basic fundamentals of good health such as proper diet, exercise, are the best methods of preventing and relieving stress.
While avoiding conflict is desired, the reality is that it will occur and obviously cannot be tolerated for long. I tend to allow frustrations to be vented as long as they are not physical but a mutual remedy is required as a resolution. This ultimately can require a final judgment on matters but I look more at what is just rather than become beholden to someone due to their level of experience or performance.
Managing Change
As I introduce change into the business, my expectation is that the need will be readily apparent to all those involved so it will be a welcomed relief to receive. I realize that in reality that can be too much to be expected but with enough proper communication, I think the organization can be informed enough to understand how the majority of the parts operate so the changes won’t come as such a surprise. Couple that with a culture of continuous improvement where change is the norm and resistance will be proactively avoided.
By encouraging or incentivizing the groups and teams to work towards the common good of the business and not selfishly as individuals, then change can be evaluated for what it represents to the success of reaching our stated goals. Change in this sense can now also be identified whether it truly is a reasonable undertaking instead of just a whim, desire, or control play from the upper management.
When the majority of employees can grasp the vision of a company and embrace it as their own, they should naturally insist on changing things that interfere with its progression from a personal standpoint due to the perceived benefits. My job as a leader is to create that vision which can be shared and attained by all levels of the organization.
When resistance is encountered, I would also expect that all their coworkers who perceive why the change is needed and perhaps even requested certain aspects of it would assertively address those in resistance to it knowing that such an action by their coworkers is not only affecting the business, but also indirectly themselves by the potential for continual loss as a result. Where that strategy falls short, engaging the uncooperative employees from a managerial standpoint in an effort to get them to understand their own reasons for resistance would also expose their true motives to themselves which they may not want to have to justify to their fellow coworkers. While this may sound a little demeaning, leaving such an attitude to continue has further reaching affects should it infect the whole company.
Understandably, in all business there is risk which can generate fear in some who lack a tolerance for it and do not want step out too aggressively even with the support of a large group. While this serves as checks and balances to avoid catastrophes, if the change doesn’t frighten the entire organization, then there is good probability the individual lacks commitment to the organization. The final question I would have them pose to themselves would involve asking if this is truly a business that they want to be a part of in the first place. An individual is pretty much helpless to try to control the entire organization while they are already dislocated from it. From there I would bring in more managers and co-workers to inquire of the same thing to let the reality of the resistance be exposed until it either left, convinced everyone else to stop the change, or the employee left. There will be times for comprise when it is warranted for the benefit of the whole, but will be zero tolerated when it is for the indulgency of self.
Inside of the markets there is a constant sea of change and risk regardless due to forces competing for a lack of resources. Change becomes the norm from regulators trying to fix the game to small traders exploiting loopholes that the larger players are too slow to prevent. When you get stuck thinking that what is working right now is going to continue the same way and you camp out there is when you’re about to be left behind. Inability to change is the forerunner to extinction.
Management Control
My preference in developing an employment culture is to foster creativity and innovation. As such, management needs to be kept on a tight leash to prevent stifling those conditions. If the employees are afraid to step out of line to question a process or offer an alternative, then we are losing the potential value from the quality of colleagues we set out to collect in the first place. All need to feel some empowerment in their position to affect results and assist in providing the reasons for being there at all.
My view of a manager’s position is ensure there isn’t anything preventing the managed from performing their functions to the fullest potential. I would almost go as far as removing their doors from their offices to ensure timely access and availability when those responsibilities are required. An organization’s strength relies on all parts working together rather than being fractured into classes. Breaking down the barriers to communication and involvement between the departments will result in cohesion between levels to share common goals.
Of course there will still be the need for the managers’ qualifications to make needed decisions and plan future stages but by removing the separations they become a rightful extension of the main labor component and provide the competitive edge to outperform. Since the managers have a better view of the big picture, they can allow the specialists to focus on the specifics without straying too far from all the other objectives. The ability for those performers to tap into extended resources adds insight for effectiveness. The connectivity of all parts of the organization through management creates a single entity which can readily achieve its purpose.
There will always be a need for managers to refer to a higher leader in order to coordinate between themselves but it should be relatively limited to reporting progress or receiving new directives. Where this higher layer differs in comparison to the lowest is reflected in the managers who must serve in both directions.
Appraising and Rewarding Performance
After recognizing that not all employees share the same skills, knowledge, experience, or attitude, I still contend they all share the same purpose and should share the same rewards and losses proportionately. Granted, someone with greater authority will also have the ability to impact the outcome of events to a greater effect, but they will also stand to gain or lose a greater share depending on the outcome of their actions.
To accomplish this division of reckoning, a model must be created similar to stock in a public company. As shareholders buy or sell more stock, so does their equity in the company change up or down. As more stock is issued, or as more stockholders acquire it, the value of that stock fluctuates accordingly. Now imagine a company’s ability to take its excess profits and split it up like dividends to its shareholders but instead to bequest it to its employees proportionately depending on their contribution to the company.
I once heard a wise man say that you only have 100%. You cannot provide more than that, it’s all you have. Along those lines then, by establishing every single employee with an individual percentage, they each are then directly impacted by both the successes and failures of the company. The only limits I would place on such a system would be the inability to lose more than nothing resulting in an employee having to pay in when the company took a loss, or by making it a straight commission process where nothing was paid out in the event there were no profits.
To then compliment this bonus or profit sharing structure, there would still be a normal wage structure funded by profits that were not deemed as excess and set depending on position but not by performance. If anything, they would be tied to inflation to swing both up and down respectively and adjusted otherwise according to company growth for remaining competitive in the labor market.
Where performance is concerned, a percentage adjustment would occur as both a reward to one and a loss to another. Again, you only have 100%. The crux to establishing an equitable way for both originally allocating these percentage points and appraising the modification of them would be by agreement. The original plan implementation would need negotiation by those currently employed and perhaps set by a ratio of their compared current wages and new employees would just have to accept the plan upon hire. Beyond that, pools would be established for the various departments and levels to allocate by unpopular vote. Although few are noble enough to say someone deserves more, they are more than willing to take someone’s away. I sure would want to be a profit creator in that environment to provide for my fellow voters.
Operations Management and Control
As my business grows I foresee the complexity growing with it as well. A major unknown at this time which will cause plans to adapt and shift involves the future evolution of technology. While that same technology carries great advantage, not progressing with it causes that edge to slip away. This demands a constant expertise in all things tech related from bandwidth to virtualization and from servers to mobile devices. Programming languages are continually developing as actual spoken languages are disappearing.
Operating from a mission critical standpoint requires redundancy beyond the norm. Servers can be placed directly inside of exchange houses. Generators can automatically pickup when batteries run low in power outages. Separate service providers can construct internet networks into the facilities in case one has an outage. Datacenters can be located in different regions of the country and even various countries to ensure whatever catastrophes occur that the show will still go on.
While much of this sort planning is potentially spread out beyond a simple 10 year plan, it can be deployed readily depending upon rapid success. Naturally such fast growth would carry its own detriments to the health of a developing company but they could be mitigated as well with proper management and planning. To ensure the same mission, goals, and objectives go with it, I expect the need to have them documented and then communicated on an ongoing basis to maintain the singleness of the same vision.
Without an opportunity to see the end before beginning, I would expect all planning and deployment to be on a needs driven basis as it rightly should be. As the company succeeds, so does it grow as those profits are reinvested back in and more opportunity is created.
