It has been said that, if you always do what you have always done, you will always get what you have
always gotten. It is equally true that if you always see what you�ve always seen, you will continue to
behave as you always have. If you want to change an organization, you must change your way of
seeing the world. You must shed your biases in order to see the world with fresh insight. Only by
doing this can you develop approaches to business that will take you from ordinary to extraordinary.
The authors of this segment�s Learning Resources offer principles and practices that can lead to
new ways of seeing the world.
- Begin by explaining how Luntz�s principles can be applied to portfolio management.
- Then discuss how his principles relate to at least two prominent models of leadership.
- Next, contrast Luntz�s principles of winning to Laufer�s leadership practices.
- Finally, provide at least five criteria for measuring portfolio performance to validate the principles and
practices you have just discussed.
- Provide specific examples of how you would apply these criteria to your professional practice.
EXTRAORDINARY MANAGEMENT 2
How the Principles of Luntz could be applied to Portfolio Management
Luntz identified 9 Ps of winning which could be followed by a business person who
intends to be a winner for effective portfolio management. Luntz’s principles can be applied
to portfolio management by strictly following the 9 Ps of winning. These include (i) People-
Centeredness – all decisions regarding objectives, products and communication have to be
submitted to the main organizational question: in what way does that affect the everyday
persons? (Luntz, 2011). (ii) Paradigm Breaking – the manager is a game changer who has the
approach of never settling for the usual or conventional. (iii) Prioritization – the manager has
an uncanny capacity to prioritize and knows how to separate what should be done from what
must be done. (iv) Perfection – the manager is driven to perfection and this allows him/her to
reach excellence in portfolio management. (v) Partnership – the manager works with the right
people/partners/employees. (vi) Passion – the manager brings passion in portfolio
management. (vii) Persuasion – the manager persuades others to ensure effective portfolio
management. (viii) Persistence – to succeed in portfolio management, the manager knows
how to succeed over the long term, never accepts defeat and never gives up. (ix) Principled
Action – the manager has a set of guiding principles which allow him/her to succeed in
portfolio management (Luntz, 2011).
How Luntz’s Principles relate To 2 Prominent Leadership Models
Luntz’s principles relate to the following prominent models of leadership: charismatic
leadership and transformational leadership model. In Luntz’s principles, the first P of People-
Centeredness means that for the leader to be a winner, he or she should know what makes
team members or employees tick. As a successful communicator, the leader is charismatic
and charming (Senge, 2006). They also bring passion to whatever they do and the way they
communicate. This clearly relates to the charismatic leadership model in which the leader
EXTRAORDINARY MANAGEMENT 3
injects enthusiasm into the team, and he or she is really energetic in driving the team
members forward (Stogdill, 2011). Transformational leaders inspire their team with a
collective vision of the future. They spend much time communicating and are very visible.
This is in line with Luntz’s winning Ps of People-Centeredness, Paradigm Breaking, and
Prioritization of Luntz’s principles.
Contrasting Luntz’s Principles of Winning and Laufer’s Leadership Practices
Luntz’s principles of winning provide several guidelines that managers or leaders can
use in order to win particularly in business. In essence, Luntz’s principles demonstrate how
winners win and how a businessman can learn the way that winners usually win. The 9 rules
for winners are helpful to business persons who can use them to plan their communications to
emerge winners in the marketplace of today (Luntz, 2011). This differs to some extent from
Laufer’s leadership practices since Laufer’s leadership practices focus on good leadership in
the context of managing projects and how people can be successful by doing what is actually
right for the project and bring the project team members together to believe in the project
(Laufer, 2012). Moreover, Laufer’s leadership practices highlight what a project manager has
to do in order to deliver outstanding project results; that is, by leading rather than following a
Five Criteria for Measuring Portfolio Performance
Portfolio performance measures need to be an essential facet of the investment
decision process. The criteria for measuring portfolio performance to validate the principles
and practices discussed above include the following: (i) rate of return of a portfolio. It is the
most vital outcome from any investment (Gurroy & Omer, 2011); (ii) risk adjusted
performance measure; (iii) use of Treynor Index; (iv) use of Sharp Index; and (v) use of
Jensen Index – the three indices would be used to measure the risk-adjusted performance
EXTRAORDINARY MANAGEMENT 4
How I Would Apply the Criteria to My Professional Practice
In my professional practice, I would apply the aforementioned criteria by measuring
the rate of return to the company’s portfolio. An appropriate formula would used to compute
the return to a portfolio. The common methods for computing return to a portfolio that I
would use include Value Weighted rate of return and Time Weighted rate of return.
Secondly, I would apply the criteria by using the three indices – Treynor Index, The Sharp
Index, and The Jensen Index – to measure the risk-adjusted performance to determine
EXTRAORDINARY MANAGEMENT 5
Gurroy, C. T., & Omer, Y. (2011). Evaluation of portfolio performance. Oxford, England:
Oxford University Press.
Laufer, A. (2012). Mastering the leadership role in project management: Practices that
deliver remarkable results. Upper Saddle River, NJ: FT Press.
Luntz, F. I. (2011). Win: The key principles to take your business from ordinary to
extraordinary. New York, NY: Hyperion.
Shahid, M. (2013). Measuring portfolio performance. Journal of Finance, 32(9): 23-35
Senge, P. M. (2006). The fifth discipline: The art & practice of the learning organization.
New York, NY: Doubleday.
Stogdill, R. M. (2012). Handbook of Leadership: A Survey of Theory and Research . New York: Free