The Dept. of Housing and Urban Development (HUD) announced Friday it is instituting a one-year moratorium on the Federal Housing Administration (FHA) 90-day anti-flipping rule.
With certain exceptions, such as HUD-owned and bank-owned properties, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. However, beginning Feb. 1, buyers may use FHA-insured financing to purchase properties resold through private developers and investors, providing access to a broader array of recently foreclosed properties.
Under the temporary waiver, all transactions must be arm's-length, and most properties will require additional documentation of improvements and justification of the price increase. Additional documentation may include a second appraisal and a property inspection ordered by the lender.
C.A.R. recently submitted a letter to FHA Commissioner David Stevens detailing the challenges facing many home buyers using FHA loans, such as the lack of housing inventory available to FHA buyers, and the need for this rule to be revised to reflect current market conditions. The reexamination of the 90-day anti-flipping rule was passed as an action item during C.A.R.'s board of directors meetings in October.
Thursday, January 21, 2010
New rules for FHA borrowers
The Federal Housing Administration (FHA) today outlined future changes to the FHA home loan program. The changes first were proposed last month by Secretary of Housing and Urban Development (HUD) Shaun Donovan.
Rising defaults on FHA loans have led to the FHA’s cash reserves falling below federally mandated levels. FHA officials hope that policy changes will ensure borrowers have a stronger equity position and are less likely to default.
Policy changes include:
. Raising the up-front mortgage insurance premium: The premium will rise to 2.25 percent from its
current 1.75 percent. HUD is expected to release a Mortgagee Letter on Jan. 21 making the
premium increase effective in the spring.
. Raising the minimum credit score requirements: New borrowers will be required to have a minimum
FICO score of 580 to qualify for the FHA’s 3.5 percent down payment program. New borrowers with
less than a 580 FICO score will be required to put down at least 10 percent. FHA expects this to take
effect in early summer after it goes through the normal regulatory process.
. Reduce allowable seller concessions: The agency is lowering the maximum permissible level to 3
percent from its current 6 percent limit. FHA expects this to take effect in early summer after it goes
through the normal regulatory process.
Rising defaults on FHA loans have led to the FHA’s cash reserves falling below federally mandated levels. FHA officials hope that policy changes will ensure borrowers have a stronger equity position and are less likely to default.
Policy changes include:
. Raising the up-front mortgage insurance premium: The premium will rise to 2.25 percent from its
current 1.75 percent. HUD is expected to release a Mortgagee Letter on Jan. 21 making the
premium increase effective in the spring.
. Raising the minimum credit score requirements: New borrowers will be required to have a minimum
FICO score of 580 to qualify for the FHA’s 3.5 percent down payment program. New borrowers with
less than a 580 FICO score will be required to put down at least 10 percent. FHA expects this to take
effect in early summer after it goes through the normal regulatory process.
. Reduce allowable seller concessions: The agency is lowering the maximum permissible level to 3
percent from its current 6 percent limit. FHA expects this to take effect in early summer after it goes
through the normal regulatory process.
Thursday, January 14, 2010
Having a “can do” attitude
Having a “can do” attitude - very valuable.
Knowing when “can do” won’t do - priceless.
There are times when you’ve done your due diligence, you’ve been honest every step of the way with everyone connected to a venture or project, and suddenly, everything you’ve worked so hard for blows up in your face. You re-attack the problem and it’s like throwing a pebble at a freight train. The problem continues to vex, frustrate you, and is costly to you, your business, and your relationships. The problem is here to stay. The good news is so are you. The scenario I’m presenting to you is not being stuck in traffic. I’m talking about something which has significantly challenged your beliefs, your methods, even your confidence. In other words something significant.
Usually when “can do” fails, the first step is to seek comfort in the arms of others. But when significance strikes, we realize all too well while can be part of the solution they can’t make the problem go away. Being willing to trust others and seek external answers is good. What isn’t good is the usual answer we hear when we’re looking for more than just comfort, but answers. We approach our pastor to be told “You have to have more faith”. We call our parents and are told “Don’t worry dear, your father and I think the world of you.”. Too bad your ex-client or boss doesn’t. A coach or mentor may say “Fake it ‘til you make it” or tells us to invoke the “Power of Positive Thinking”. We approach our spouses or significant others and initially receive a compassionate response. But after awhile we begin to be a drain on the relationship because what’s happened is so big we can talk of nothing else. Defeat happens and you need to understand what it is, how to get out of it, and where to go from there. However, an unguided or unstructured means of restoration will result in more heartache and more problems. As for the original problem, it now becomes a pattern.
So when our relationships don’t cut it we turn to books and that’s good too. The problem is there are way too many books which offer quick, general, and ultimately childish answers. Because we’re in an emotionally altered state, we don’t feel like wading through even more complexity loaded with the unknown. If we feel self-pity then it’s “Don’t Sweat the Small Stuff (and it’s all small stuff)”. What about when your wife is diagnosed with cancer? I guess that’s small stuff. Or, we’re attracted to the mystical such “The Secret”. Essentially “The Secret” is that whatever happens to you is up to you and you alone via “The Law of Attraction” (basically a regurgitated form of “Positive Thinking”). But what about when a pedophile kidnaps and murders an 8 year old child? I guess they attracted it. Or how about the earthquake in Pakistan in 2005 which killed 70,000 people? Did all of those people attract it?
Society is under the delusion that if we just try hard enough, if we’re diligent enough, and have enough heart, victory is assured. The truth is that we can do all of that and more and still sometimes it’s just not our time. Anyone who chooses to make a living based on passion, knows that it’s a matter of time until we tumble and have to change. If you are doing something which you have been called to do, you know that although defeat is a probability over time, it does not make us who we are. We’ve found that the best method to rebound is contained by the “Six Rs”. Let’s look at the amazing comeback of George Foreman as an example.
1. Relax. When a good boxer takes a blow flush on the chin, he’ll relax and absorb the blow will allow the force to flow through him, vs. into him. There’s a reason why in most fatal DUI crashes, the drunk tends to survive. That’s because he has very little tension in his muscles at the point of impact. What this would look like in real life is quickly confessing what just happened. In other words, acceptance. We all hate to lose. However, we have to go into any venture knowing that although “failure is not an option” it’s still possible. If you know who you are and can already envision what might happen (and therefore put it in its proper perspective) you’ll come out on top and rebound quickly. If you’re attacked by someone wielding a knife, you have to know that you’ll be cut at least once, if not several times before you can disarm the attacker. If you defend yourself knowing this already, the chance of going into shock is greatly reduced and so is the chance of you becoming a statistic.
When George Forman fought in his earlier years, he had an amazing amount of power behind his punches. Before he was knocked out by Muhammad Ali in the “Rumble in the Jungle”, he had dispatched the second most powerful boxer of his day, Joe Frazier in a mere 2 rounds. Ken Norton (who broke Ali’s jaw) met a similar fate. But when Foreman squared off against Ali, Ali refused to go toe to toe with Foreman. He danced, backpedaled when he had to, and repeatedly got Foreman in a clinch. Foreman would have to expend energy to untangle himself, and by round 7, against all odds and the unanimous view of the pundits and the public, George Foreman went down. Years later when he reentered the ring, Foreman, although still possessing plenty of power, chose to absorb the blows by staying relaxed vs. bulling his way through the fight.
The endstate of being able to relax is not to cover up what happened. It’s also not repeating that lie we’ve been uttering since boyhood; “That didn’t hurt.”. But being able to talk about it, limit it for what it is, and make sound decisions after the fact. Ultimately, relaxed looks like not experiencing frustration to the point of paralysis when you think about it or deal with it.
2. Remove. If something has you against the ropes and you can’t absorb anymore punishment, remove yourself from the situation. That doesn’t mean you have to quit your job or reconsider what you’re doing for a living. If you remove yourself, you’ll avoid making emotional (as in hasty or reactive) decisions. A sound decision is one which when executed, results in peace in your heart. Try to get away for a bit. Take some time off, take a vacation, but get out of striking distance of the problem.
After George Forman was knocked out by Ali, he was never quite the same again. After a lackluster performance in subsequent bouts, he collapsed in his dressing room one night and basically had an emotional collapse which resulted in his becoming a born-again Christian. He decided to enter into the ministry and raise a family, both of which he did very well. Boxing was his passion and because of that he was very appreciative of what boxing gave him. He knew that he was meant to box and still, despite his intense training regimen, his heart being 100% in it, and his 44-2 record (31 by knockout), it just didn’t happen. He removed himself from the boxing world, seemingly never to come back.
He still boxed as a hobby, still trained, and therefore kept in touch with the boxing world. But he had removed himself from the effects of the media, the ability for anyone to criticize him, or mention that he just wasn’t the “George Foreman of old”. That’s what successful removal looks like. You’re still aware of the problem, but you’re far enough from it financially, socially, and personally, where you know that despite the fallout and feedback, you’re in a safe place.
3. Replenish. This is where most of us go wrong. When we’re drained of energy and hope, we have to go somewhere to fill our tank. “Blowing off steam” is a part of the process. But the pursuit of pleasure, if it’s the core of what you do and think about, is not. It’s very seductive to sink back into the couch and zone out (“chillax” a friend of mine calls it) watching television. That’s ok, but ensure that you have a plan to get back up. The best way to do this is by a) accountability from a peer or coach and b) setting a time limit both long term and daily for leisure activity. And c) Selectively choosing the activities you will use to fill up your tank. Playing endless video games is neither relaxing nor replenishing. Most men play video games which entail shooting, killing, or some sort of competition (myself included). But when you’re done with your Halo or “Street Fighter” marathon, you’re not fulfilled, you’re spent. Try to focus on hobbies which entail some sort of creativity, something which is growth oriented. If it’s a video game, try one of the SIM games or even strategy games, something which uses your mind but doesn’t tax it. If you want to take a vacation, go somewhere relaxing, not Vegas. If you’re taking a break from your career or the market, choose something where you can come home everyday feeling somewhat fulfilled.
George Foreman’s boxing days were over (from his perspective) for quite some time. Yet in the interim he raised a family, developed a great church, constructed a youth center, and was willing to share his experiences on shows such as “The 700 Club”. Most importantly, he got his sense of humor back. Not by “keeping the dream alive” but by seeing what else he could do well, aside from boxing. You can tell where someone is emotionally by watching how they handle their pleasures. And what separates good men from great men, is how they spend their free time, how they connect with others when they’re down, and the sincerity of their reflection.
4. Review. This is usually where most men stop. You don’t have to indulge in debauchery in order to avoid the truth. You also don’t have to whip yourself endlessly (although you can expect this too). But if you want to stick it out, something has to change, usually you. We can keep doing what we do and succeed wildly at it for awhile. But eventually, conditions will change, either in your market, your industry, client base. Whatever it is, no one can get by doing the same thing over and over again no matter how brilliant their past performances were. If you’re properly and adequately replenished, then you’ll have regained your energy. Energy enables hope. And now you’re ready to review what you’ve done, what happened, and how you want to do things from here on out. If all of the above require changing who you are (and usually it does), then you’re ok with that too. What a review looks like is threefold: 1) Asking for counsel from a coach or mentor. A good coach can help you not only conquer lost ground, but to conquer yourself. 2) Being willing to conduct a thorough “AAR” (After Action Report) on not only what went wrong, but also what went right. Avoid the temptation to dissect your reasons for failure alone. 3) Refrain from taking anything which is said or discovered personally. In his book “Integrity”, Dr. Henry Cloud calls this process an “autopsy”. But just remember that you’re conducting an autopsy on something which will remain dead, be it a part of your character or way of doing things.
5. Re-Arm. George Foreman knew that he could no longer throw powerful combinations (a quick series of punches). Throwing a rapid succession of powerful punches like he used to would wear him out too quickly. And, although he had strength, he lost the 2 other “Ss” of punching power: speed and “snap”. Diminishing speed as you age is a given. And “snap” is the quickness and timing applied in retracting a punch. Think of striking someone with a whip. The pain you deliver is not from the whip hitting the unfortunate victim, but pulling back on the whip at just the right time so that the tip of the whip leaves a lash. However, rather than chase his ability to “snap” for endless hours in the gym for minimal overall return, he continued to get stronger and changed his strategy to overwhelm his opponents by sheer size.
What we’re getting at here is that when you decide to increase the lethality of your arsenal, you have to make what made you great even greater, and figure out a way to cover the gaps in your methods. If you spend the bulk of your time and effort working on your weaknesses, you’ll wind up having strong weaknesses. But you also have to find a way to manage your weaknesses. One of George Foreman’s weaknesses in his younger days was his attitude. In public, Foreman appeared morose and sullen. He appeared to be motivated by a grim determination. When he lost, boxing fans didn’t feel like they lost as well. But when he returned to the ring, he answered the borderline insults from the pundits with humor. In an upcoming bout with Evander Holyfield, a commentator said that Holyfield looked like a Greek god and Foreman looked like a Greek restaurant. In the commercial for the fight, Holyfield said that he couldn’t wait to wear the championship belt around his 32 inch waist. When the camera flashed to Foreman, he said “I can’t wait to wrap that belt around my 32 inch…..bicep!”. Foreman simply wasn’t attached to the outcome because God had asked him to do this. In addition to doing something he was literally called to do, he also repeatedly said that he wished to inspire “older folks” and show them that they were capable of more. This time, the American public had not only accepted Foreman, but adopted him as well.
6. Re-engagement. Against all odds, and with several losses along the way, Foreman, at the age of 45, regained the heavyweight championship of the world (and not against weak opponents either). His championship fight was against Michael Moorer, who was not only stronger, but had beaten the “Greek god” Evander Holyfield. Moorer was not only stronger and quicker, he also had a first rate trainer, Teddy Atlas who trained Mike Tyson in his rise to greatness. Years later, Teddy Atlas appeared on ESPN as part of a round table of boxing experts who were debating the greatest heavyweights of all time. When he was asked about how his protégé Moorer was knocked out, Atlas replied; “I knew we were in trouble when I saw him walking towards the ring. He was wearing the same trunks he wore the night he was knocked out by Muhammad Ali. I knew we were in trouble because any man who is willing to confront his past is dangerous.”.
The “Six Rs” are proven. They’re reliable not just for how to get out of a rut, but how to do better next time. This is because the “Six Rs” focus on how to be better next time. Following this method won’t undo your past. But it will make it irrelevant. Not by denial, not by avoidance, but by making it a part of who you are.
Knowing when “can do” won’t do - priceless.
There are times when you’ve done your due diligence, you’ve been honest every step of the way with everyone connected to a venture or project, and suddenly, everything you’ve worked so hard for blows up in your face. You re-attack the problem and it’s like throwing a pebble at a freight train. The problem continues to vex, frustrate you, and is costly to you, your business, and your relationships. The problem is here to stay. The good news is so are you. The scenario I’m presenting to you is not being stuck in traffic. I’m talking about something which has significantly challenged your beliefs, your methods, even your confidence. In other words something significant.
Usually when “can do” fails, the first step is to seek comfort in the arms of others. But when significance strikes, we realize all too well while can be part of the solution they can’t make the problem go away. Being willing to trust others and seek external answers is good. What isn’t good is the usual answer we hear when we’re looking for more than just comfort, but answers. We approach our pastor to be told “You have to have more faith”. We call our parents and are told “Don’t worry dear, your father and I think the world of you.”. Too bad your ex-client or boss doesn’t. A coach or mentor may say “Fake it ‘til you make it” or tells us to invoke the “Power of Positive Thinking”. We approach our spouses or significant others and initially receive a compassionate response. But after awhile we begin to be a drain on the relationship because what’s happened is so big we can talk of nothing else. Defeat happens and you need to understand what it is, how to get out of it, and where to go from there. However, an unguided or unstructured means of restoration will result in more heartache and more problems. As for the original problem, it now becomes a pattern.
So when our relationships don’t cut it we turn to books and that’s good too. The problem is there are way too many books which offer quick, general, and ultimately childish answers. Because we’re in an emotionally altered state, we don’t feel like wading through even more complexity loaded with the unknown. If we feel self-pity then it’s “Don’t Sweat the Small Stuff (and it’s all small stuff)”. What about when your wife is diagnosed with cancer? I guess that’s small stuff. Or, we’re attracted to the mystical such “The Secret”. Essentially “The Secret” is that whatever happens to you is up to you and you alone via “The Law of Attraction” (basically a regurgitated form of “Positive Thinking”). But what about when a pedophile kidnaps and murders an 8 year old child? I guess they attracted it. Or how about the earthquake in Pakistan in 2005 which killed 70,000 people? Did all of those people attract it?
Society is under the delusion that if we just try hard enough, if we’re diligent enough, and have enough heart, victory is assured. The truth is that we can do all of that and more and still sometimes it’s just not our time. Anyone who chooses to make a living based on passion, knows that it’s a matter of time until we tumble and have to change. If you are doing something which you have been called to do, you know that although defeat is a probability over time, it does not make us who we are. We’ve found that the best method to rebound is contained by the “Six Rs”. Let’s look at the amazing comeback of George Foreman as an example.
1. Relax. When a good boxer takes a blow flush on the chin, he’ll relax and absorb the blow will allow the force to flow through him, vs. into him. There’s a reason why in most fatal DUI crashes, the drunk tends to survive. That’s because he has very little tension in his muscles at the point of impact. What this would look like in real life is quickly confessing what just happened. In other words, acceptance. We all hate to lose. However, we have to go into any venture knowing that although “failure is not an option” it’s still possible. If you know who you are and can already envision what might happen (and therefore put it in its proper perspective) you’ll come out on top and rebound quickly. If you’re attacked by someone wielding a knife, you have to know that you’ll be cut at least once, if not several times before you can disarm the attacker. If you defend yourself knowing this already, the chance of going into shock is greatly reduced and so is the chance of you becoming a statistic.
When George Forman fought in his earlier years, he had an amazing amount of power behind his punches. Before he was knocked out by Muhammad Ali in the “Rumble in the Jungle”, he had dispatched the second most powerful boxer of his day, Joe Frazier in a mere 2 rounds. Ken Norton (who broke Ali’s jaw) met a similar fate. But when Foreman squared off against Ali, Ali refused to go toe to toe with Foreman. He danced, backpedaled when he had to, and repeatedly got Foreman in a clinch. Foreman would have to expend energy to untangle himself, and by round 7, against all odds and the unanimous view of the pundits and the public, George Foreman went down. Years later when he reentered the ring, Foreman, although still possessing plenty of power, chose to absorb the blows by staying relaxed vs. bulling his way through the fight.
The endstate of being able to relax is not to cover up what happened. It’s also not repeating that lie we’ve been uttering since boyhood; “That didn’t hurt.”. But being able to talk about it, limit it for what it is, and make sound decisions after the fact. Ultimately, relaxed looks like not experiencing frustration to the point of paralysis when you think about it or deal with it.
2. Remove. If something has you against the ropes and you can’t absorb anymore punishment, remove yourself from the situation. That doesn’t mean you have to quit your job or reconsider what you’re doing for a living. If you remove yourself, you’ll avoid making emotional (as in hasty or reactive) decisions. A sound decision is one which when executed, results in peace in your heart. Try to get away for a bit. Take some time off, take a vacation, but get out of striking distance of the problem.
After George Forman was knocked out by Ali, he was never quite the same again. After a lackluster performance in subsequent bouts, he collapsed in his dressing room one night and basically had an emotional collapse which resulted in his becoming a born-again Christian. He decided to enter into the ministry and raise a family, both of which he did very well. Boxing was his passion and because of that he was very appreciative of what boxing gave him. He knew that he was meant to box and still, despite his intense training regimen, his heart being 100% in it, and his 44-2 record (31 by knockout), it just didn’t happen. He removed himself from the boxing world, seemingly never to come back.
He still boxed as a hobby, still trained, and therefore kept in touch with the boxing world. But he had removed himself from the effects of the media, the ability for anyone to criticize him, or mention that he just wasn’t the “George Foreman of old”. That’s what successful removal looks like. You’re still aware of the problem, but you’re far enough from it financially, socially, and personally, where you know that despite the fallout and feedback, you’re in a safe place.
3. Replenish. This is where most of us go wrong. When we’re drained of energy and hope, we have to go somewhere to fill our tank. “Blowing off steam” is a part of the process. But the pursuit of pleasure, if it’s the core of what you do and think about, is not. It’s very seductive to sink back into the couch and zone out (“chillax” a friend of mine calls it) watching television. That’s ok, but ensure that you have a plan to get back up. The best way to do this is by a) accountability from a peer or coach and b) setting a time limit both long term and daily for leisure activity. And c) Selectively choosing the activities you will use to fill up your tank. Playing endless video games is neither relaxing nor replenishing. Most men play video games which entail shooting, killing, or some sort of competition (myself included). But when you’re done with your Halo or “Street Fighter” marathon, you’re not fulfilled, you’re spent. Try to focus on hobbies which entail some sort of creativity, something which is growth oriented. If it’s a video game, try one of the SIM games or even strategy games, something which uses your mind but doesn’t tax it. If you want to take a vacation, go somewhere relaxing, not Vegas. If you’re taking a break from your career or the market, choose something where you can come home everyday feeling somewhat fulfilled.
George Foreman’s boxing days were over (from his perspective) for quite some time. Yet in the interim he raised a family, developed a great church, constructed a youth center, and was willing to share his experiences on shows such as “The 700 Club”. Most importantly, he got his sense of humor back. Not by “keeping the dream alive” but by seeing what else he could do well, aside from boxing. You can tell where someone is emotionally by watching how they handle their pleasures. And what separates good men from great men, is how they spend their free time, how they connect with others when they’re down, and the sincerity of their reflection.
4. Review. This is usually where most men stop. You don’t have to indulge in debauchery in order to avoid the truth. You also don’t have to whip yourself endlessly (although you can expect this too). But if you want to stick it out, something has to change, usually you. We can keep doing what we do and succeed wildly at it for awhile. But eventually, conditions will change, either in your market, your industry, client base. Whatever it is, no one can get by doing the same thing over and over again no matter how brilliant their past performances were. If you’re properly and adequately replenished, then you’ll have regained your energy. Energy enables hope. And now you’re ready to review what you’ve done, what happened, and how you want to do things from here on out. If all of the above require changing who you are (and usually it does), then you’re ok with that too. What a review looks like is threefold: 1) Asking for counsel from a coach or mentor. A good coach can help you not only conquer lost ground, but to conquer yourself. 2) Being willing to conduct a thorough “AAR” (After Action Report) on not only what went wrong, but also what went right. Avoid the temptation to dissect your reasons for failure alone. 3) Refrain from taking anything which is said or discovered personally. In his book “Integrity”, Dr. Henry Cloud calls this process an “autopsy”. But just remember that you’re conducting an autopsy on something which will remain dead, be it a part of your character or way of doing things.
5. Re-Arm. George Foreman knew that he could no longer throw powerful combinations (a quick series of punches). Throwing a rapid succession of powerful punches like he used to would wear him out too quickly. And, although he had strength, he lost the 2 other “Ss” of punching power: speed and “snap”. Diminishing speed as you age is a given. And “snap” is the quickness and timing applied in retracting a punch. Think of striking someone with a whip. The pain you deliver is not from the whip hitting the unfortunate victim, but pulling back on the whip at just the right time so that the tip of the whip leaves a lash. However, rather than chase his ability to “snap” for endless hours in the gym for minimal overall return, he continued to get stronger and changed his strategy to overwhelm his opponents by sheer size.
What we’re getting at here is that when you decide to increase the lethality of your arsenal, you have to make what made you great even greater, and figure out a way to cover the gaps in your methods. If you spend the bulk of your time and effort working on your weaknesses, you’ll wind up having strong weaknesses. But you also have to find a way to manage your weaknesses. One of George Foreman’s weaknesses in his younger days was his attitude. In public, Foreman appeared morose and sullen. He appeared to be motivated by a grim determination. When he lost, boxing fans didn’t feel like they lost as well. But when he returned to the ring, he answered the borderline insults from the pundits with humor. In an upcoming bout with Evander Holyfield, a commentator said that Holyfield looked like a Greek god and Foreman looked like a Greek restaurant. In the commercial for the fight, Holyfield said that he couldn’t wait to wear the championship belt around his 32 inch waist. When the camera flashed to Foreman, he said “I can’t wait to wrap that belt around my 32 inch…..bicep!”. Foreman simply wasn’t attached to the outcome because God had asked him to do this. In addition to doing something he was literally called to do, he also repeatedly said that he wished to inspire “older folks” and show them that they were capable of more. This time, the American public had not only accepted Foreman, but adopted him as well.
6. Re-engagement. Against all odds, and with several losses along the way, Foreman, at the age of 45, regained the heavyweight championship of the world (and not against weak opponents either). His championship fight was against Michael Moorer, who was not only stronger, but had beaten the “Greek god” Evander Holyfield. Moorer was not only stronger and quicker, he also had a first rate trainer, Teddy Atlas who trained Mike Tyson in his rise to greatness. Years later, Teddy Atlas appeared on ESPN as part of a round table of boxing experts who were debating the greatest heavyweights of all time. When he was asked about how his protégé Moorer was knocked out, Atlas replied; “I knew we were in trouble when I saw him walking towards the ring. He was wearing the same trunks he wore the night he was knocked out by Muhammad Ali. I knew we were in trouble because any man who is willing to confront his past is dangerous.”.
The “Six Rs” are proven. They’re reliable not just for how to get out of a rut, but how to do better next time. This is because the “Six Rs” focus on how to be better next time. Following this method won’t undo your past. But it will make it irrelevant. Not by denial, not by avoidance, but by making it a part of who you are.
Monday, January 4, 2010
Happy New Year?
Being the beginning of a new year, you may have developed a list of New Years resolutions. Having goals is excellent. Goals reflect a desire to be better than who we currently are. As the final seconds of the previous year count down, our hope builds and we say to ourselves “This year will be different.”. The ugly truth is that although 52% of us feel confident that we will be able to turn our resolutions into reality, only 12% of us actually do. And of that 12%, the overwhelming majority wishes it achieved their aims in a more cost-effective and less demanding way. The most cited reasons were lack of planning, poor situational awareness, and a narrow vision of what they really wanted to accomplish. An excellent case study in the mismanagement of all three of these key elements to goal attainment is Napoleon’s invasion of Russia.
The year was 1812 and Napoleon was the master of Europe. Against his wishes, Russia and England (the only two major powers he hadn’t conquered yet) continued to trade with one another. Napoleon’s strategic goal was to isolate Britain economically and politically. The purpose was to set the stage for a future invasion of England which he saw as his only remaining rival. The method would be a punitive expedition into Russia so severe that the Czar Alexander I would be compelled to cease trade with England and succumb to the economic system of the French Empire.
Planning: What set Napoleon apart from all other generals was his extraordinary attention to detail not only on the battlefield but also on the drawing board. Napoleon meticulously arranged for the construction of supply depots to enable the French army to achieve his objective of punishing Russia into compliance. We all know what happened next. What many don’t know is the true cause of the demise of the French army. “General Winter” did not destroy the French Army as many assume. It merely finished the job which Napoleon’s lack of oversight began. Although the lack of winter clothing resulted in a rout instead of an orderly retreat, Napoleon’s lack of a plan for resupply once in enemy territory literally snatched defeat from the jaws of victory. As a result within 8 weeks, the “Grande Armee” had suffered 50% casualties to disease, starvation, and desertion all without engaging in any large scale (and therefore decisive) battles. By late June the French army had slaughtered virtually all of its horses for food which crippled supply efforts since its supply wagons were horse-drawn. By the time Napoleon had crossed the Russian border, his army was literally feeding on itself. By September of 1812, the Grande Armee went from 690,000 effectives to only 135,000 again, without even fighting one battle. The plan had failed. There was no effort to modify it and not even talk of making a new one. Meanwhile the Russian army was nowhere in sight.
Situational Awareness: Success leaves clues. Fortunately, so does failure. More often than not, we receive signals along the way which, if handled properly, can allow us to maintain our even increase momentum. When we’re emotionally involved in a big project which has already incurred high cost and commitment on our part, the temptation to “drop the shoulder” and continue to attack increases. There’s a satisfaction in doing what others told you could not be done. But when the thrill of victory dissipates, have you reached your true objective?
A month before entering Moscow, Napoleon finally found and fought the Russian army at the Battle of Borodino. The hope of inflicting a decisive defeat didn’t materialize. Borodino was a nasty, vicious, bloody battle which accomplished nothing. Although the Russians withdrew, the “Grand Armee” was now down to 95,000 men. Taking Moscow was questionable and holding it was impossible. The army would be lucky to make it back to France much less ask anything of Czar Alexander.
It was time to stop, reassess, and ensure actions aligned with goal achievement and resources could handle reality. Virtually all of Napoleon’s advisors urged him to at least stop and consider the situation. Napoleon would have none of it. He had succumbed to the “sunk cost fallacy” which is basically a reluctance or refusal to change a course of action due to overfocus on resources committed or already spent. What’s needed is not necessarily quitting or abandoning your aims. However, when setbacks accumulate to the point of not only compromising the goal but bringing you to the point of ruin, it is definitely time to stop, review, and seek counsel.
Vision: There is a Japanese proverb which states “Vision without action is a daydream, action without vision is a nightmare.”. The purpose of the campaign was to force Russia to cease trading with England. That’s it. When losses accumulated and it seemed that Napoleon could actually “lose” he changed his mind to achieve a goal which was “doable” but would not support his original intention. Napoleon’s army did reach Moscow by mid-September. However, the residents had fled (including Czar Alexander) and burned Moscow to the ground. Because Napoleon had compromised his vision, his judgment followed suit. Consequently the master of Europe forgot that winning a war was no longer about taking a capital city and being presented with the keys. After leaving France with 695,000 experienced and competent soldiers, the Grand Armee returned to France with only 5,000 stragglers. Napoleon, having abandoned his troops in the field, returned to France only to be handed over to his enemies. His original vision of a French Empire which could act with impunity had crumbled around him. His country paid for his lack of planning, his army paid for his lack of situational awareness, and a promising future for both himself and France paid for his lack of vision.
Napoleon is but one of many individuals who have failed to achieve enormous goals due to poor planning and unwillingness to see the truth. Many top-ranked executives, small business owners, generals, and others have gone this route. However the ones who manage to recover momentum and achieve something truly significant know the difference between a risk and a gamble. The difference is best summed up by Erwin Rommel, a great general in his own right; “A risk is a chance you take; if it fails you can recover. A gamble is a chance taken; if it fails, recovery is impossible.”
In order to assume risk with confidence, develop a plan which is solid and flexible. Understand what your blind spots are and employ people who can tactfully point them out. Seek the company and counsel of those who are experienced enough to remind you when you are straying from your integrity, values, and vision. Or, you can roll the dice. The choice is yours.
The year was 1812 and Napoleon was the master of Europe. Against his wishes, Russia and England (the only two major powers he hadn’t conquered yet) continued to trade with one another. Napoleon’s strategic goal was to isolate Britain economically and politically. The purpose was to set the stage for a future invasion of England which he saw as his only remaining rival. The method would be a punitive expedition into Russia so severe that the Czar Alexander I would be compelled to cease trade with England and succumb to the economic system of the French Empire.
Planning: What set Napoleon apart from all other generals was his extraordinary attention to detail not only on the battlefield but also on the drawing board. Napoleon meticulously arranged for the construction of supply depots to enable the French army to achieve his objective of punishing Russia into compliance. We all know what happened next. What many don’t know is the true cause of the demise of the French army. “General Winter” did not destroy the French Army as many assume. It merely finished the job which Napoleon’s lack of oversight began. Although the lack of winter clothing resulted in a rout instead of an orderly retreat, Napoleon’s lack of a plan for resupply once in enemy territory literally snatched defeat from the jaws of victory. As a result within 8 weeks, the “Grande Armee” had suffered 50% casualties to disease, starvation, and desertion all without engaging in any large scale (and therefore decisive) battles. By late June the French army had slaughtered virtually all of its horses for food which crippled supply efforts since its supply wagons were horse-drawn. By the time Napoleon had crossed the Russian border, his army was literally feeding on itself. By September of 1812, the Grande Armee went from 690,000 effectives to only 135,000 again, without even fighting one battle. The plan had failed. There was no effort to modify it and not even talk of making a new one. Meanwhile the Russian army was nowhere in sight.
Situational Awareness: Success leaves clues. Fortunately, so does failure. More often than not, we receive signals along the way which, if handled properly, can allow us to maintain our even increase momentum. When we’re emotionally involved in a big project which has already incurred high cost and commitment on our part, the temptation to “drop the shoulder” and continue to attack increases. There’s a satisfaction in doing what others told you could not be done. But when the thrill of victory dissipates, have you reached your true objective?
A month before entering Moscow, Napoleon finally found and fought the Russian army at the Battle of Borodino. The hope of inflicting a decisive defeat didn’t materialize. Borodino was a nasty, vicious, bloody battle which accomplished nothing. Although the Russians withdrew, the “Grand Armee” was now down to 95,000 men. Taking Moscow was questionable and holding it was impossible. The army would be lucky to make it back to France much less ask anything of Czar Alexander.
It was time to stop, reassess, and ensure actions aligned with goal achievement and resources could handle reality. Virtually all of Napoleon’s advisors urged him to at least stop and consider the situation. Napoleon would have none of it. He had succumbed to the “sunk cost fallacy” which is basically a reluctance or refusal to change a course of action due to overfocus on resources committed or already spent. What’s needed is not necessarily quitting or abandoning your aims. However, when setbacks accumulate to the point of not only compromising the goal but bringing you to the point of ruin, it is definitely time to stop, review, and seek counsel.
Vision: There is a Japanese proverb which states “Vision without action is a daydream, action without vision is a nightmare.”. The purpose of the campaign was to force Russia to cease trading with England. That’s it. When losses accumulated and it seemed that Napoleon could actually “lose” he changed his mind to achieve a goal which was “doable” but would not support his original intention. Napoleon’s army did reach Moscow by mid-September. However, the residents had fled (including Czar Alexander) and burned Moscow to the ground. Because Napoleon had compromised his vision, his judgment followed suit. Consequently the master of Europe forgot that winning a war was no longer about taking a capital city and being presented with the keys. After leaving France with 695,000 experienced and competent soldiers, the Grand Armee returned to France with only 5,000 stragglers. Napoleon, having abandoned his troops in the field, returned to France only to be handed over to his enemies. His original vision of a French Empire which could act with impunity had crumbled around him. His country paid for his lack of planning, his army paid for his lack of situational awareness, and a promising future for both himself and France paid for his lack of vision.
Napoleon is but one of many individuals who have failed to achieve enormous goals due to poor planning and unwillingness to see the truth. Many top-ranked executives, small business owners, generals, and others have gone this route. However the ones who manage to recover momentum and achieve something truly significant know the difference between a risk and a gamble. The difference is best summed up by Erwin Rommel, a great general in his own right; “A risk is a chance you take; if it fails you can recover. A gamble is a chance taken; if it fails, recovery is impossible.”
In order to assume risk with confidence, develop a plan which is solid and flexible. Understand what your blind spots are and employ people who can tactfully point them out. Seek the company and counsel of those who are experienced enough to remind you when you are straying from your integrity, values, and vision. Or, you can roll the dice. The choice is yours.
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