Extreme Ownership Book Summary

This is a book summary of Extreme Ownership: How U.S. Navy Seals Lead and Win – Jocko Willink and Leif Babin. It is a high level run through and I recommend reading the book at least twice in its entirety. These are some of the notes I took as I read it to help guide as a reference. Each bullet below is a chapter and principle of leadership in the book.

  • Extreme ownership – the leader is ultimately responsible for everything that happens under his command. Jocko tells a story about how they had a blue on blue where they had friendly fire. A lot of individuals made mistakes, but it was ultimately his fault: he could have planned the operation better, could have made sure everyone knew where they needed to be, made sure communication with the Iraqj forces were clearer on where they would be..etc. ultimately it all came back to him.
    • What this means for business – own up to your mistakes as a leader and you will will be more respected for it. A lot of people can make excuses for themselves on why something isn’t happening. If you fail or your team fails: own it. That is what it means to be an owner and that is what it means to be the leader.
  • There are no bad teams, just bad leaders – Good leaders get the most out of their teams they find and utilize peoples’ strengths. Bad leaders think their teams are bad and they are just stuck with a bad team. Bad leaders don’t get their teams working together and think all of their decisions were the right ones. They don’t admit when it’s their fault. “If you were making the right decisions it wouldn’t have failed”.
  • Believe – ‘Even my initial reaction was “ Hell no”. It just wasn’t worth the risk. Why would we go into combat without every possible advantage, much less a self-inflicted distinct disadvantage? I didn’t believe the this mission made sense. I didn’t believe it was smarts. I didn’t believe it would be successful. To imagine a firefight alongside Iraqi soldiers with such inferior training and questionable loyalty seemed outrageous, perhaps suicidal. But as my task unit Bruiser’s commander, I knew my actions  and mind-set carried great weight among my troops. These were my orders, and for me to lead, I had to believe. So I kept my doubts to myself and asked the simple question “why?”’ – He goes on to explain how he gained his believe by understanding why the generals were asking him to do this. The long term goal of the operation was to have the Iraqi forces capable of sustaining themselves into the future, and due to the current demands, “on the job” training was the only way to accomplish this.
  • Check Your Ego – You need to be able to check your ego at the door. There is no room for ego in a battle, and it translates to business as well. Don’t be concerned about being outperformed in a task, as long as that performance makes your team better and closer to achieving its mission. This comes back to ‘Extreme Ownership’ in that you need to check your ego and understand the motivation behind peoples’ actions and how you as a leader failed to explain some important bigger picture strategy items of the project. If there is a good reason they should be doing something, you need to make it clear to your subordinates of the ‘why’ it is important: standard operating procedures, etc.
  • Cover and Move – The principle of ‘cover & move’ is a simple one. It really boils down to teamwork and making sure you are utilizing your resources to their potential. The example in the book was that they were set up as a sniper team deep in the enemy territory and they knew after the mission was over that they would go back to their command outpost before nightfall (outside of the standard) because they knew the enemy would carry out an attack on their position if they stayed put. Both sniper teams went back, but the one further into enemy territory took on fire as they returned. They utilized ‘cover & move’ to work as a team and everyone made it back safely. When they got back they were chewed out by the commander because they didn’t utilize the other SEAL sniper team for cover. They were so focused on their small unit that they didn’t pull the resources from the larger team. The business example was about an organization complaining about a related party supplier that they were forced to use for their product launch. The partner-supplier was causing delays and delays meant money. This should be a competitive advantage, but they were not utilizing the partner to its full extent. They ended up working closer with he partner and understanding what drove their timeline to optimize the value stream and start getting things done on time. As someone in manufacturing I can personally relate to this business example. The more you can work together with your suppliers and customers to help them understand the cost and timeline drivers, the better your teamwork will be which drives better communication, understanding, and trust.
  • Simple – Everyone has heard the acronym KISS – Keep It Simple Stupid. This is the KISS chapter of the book. Do not over-complicate things. As a leader it is your responsibility that your initiatives are clear. Any complexity will be compounded when things go wrong. The example int he book was related to how the bonus structure worked at a company for manual labor. They had a convoluted system that took multiple variables and mashed them together to have an engineer’s wet dream of efficiency metrics. It was complex and the employees didn’t follow how it worked so the drivers they were being measured in weren’t clear to them. They ended up changing it to be a throughput and quality metric that drove bonuses that was much simpler.
  • Prioritize & Execute – The principle here is to define what is the highest priority, don’t get overwhelmed, and execute that top priority. It is easy to try to do too many different things at once which typically results in nothing getting accomplished. A leader needs to be able to step back and look at the problem strategically:
    • What is the highest priority problem?
    • Lay out a simple clear priority effort to your team
    • Develop and determine the solution using input from the team when possible
    • Direct all resources to that high priority problem
    • Move to the next highest priority
    • Always be ready to react if the priorities shift
      • Don’t let your focus on one priority cause ’target fixation’ be able to view the problems you are facing and reprioritize as they develop.
  • Decentralized Command – Human beings are not able to effectively manage more than 6-10 people. Teams must be broken out into smaller groups with clear leaders. Those tactical level leaders need to understand not just what to do, but why they are doing it. There needs to be alignment between the high level leadership all the way down the chain of command working towards the same goals. When things start to break down, leaders that try to do too much themselves can degrade into chaos. Use decentralized command to lead up and down the chain of command without micromanaging the teams.
  • Plan – The planning process is so critical to any operation it is almost a cliche in the business world. That doesn’t make it any less important though. This chapter focuses in on the most important part of the planning process and communication: Commander’s intent. The plan needs to be simple enough so the entire team can understand and own their roles. The commander’s intent it the most important part of the brief. It sets the definition of success and should guide each decision on the ground. It is also important for leaders to delegate the planning process down the chain of command. The leader should be able to keep a high level perspective and oversight of the mission without getting caught in the details. If you can maintain a higher level perspective it allows you to see the big picture and focus on the strategic aspects while seeing any gaps in the plan that need to be fixed and are more difficult to see at the detail level. They detail out the planning process on page 207:
    • Analyze the mission (define commander’s intent)
    • Identify assets and resources you have available
    • Decentralize the planning process
    • Empower key leaders to develop the plan for selected course of action
    • Plan for likely contingencies at each phase of the operation
    • manage risks that can be controlled
    • Delegate portions of the plan and brief to key junior leaders
    • stand back and be the tactical genius
    • Continually check and question plan against new information
    • Brief the plan to all participants
      • Emphasize commander’s intent
      • ask questions & engage w/ the team
    • Conduct post-operational debrief
      • Analyze lessons learned and implement in future planning
  • Decisiveness amid uncertainty – The key here is that you will never have complete information and a strong leader needs to make a call. The “wait & see” approach that a lot of people want to default to usually ends up showing a lot of weakness and puts you on your heels. You want to be the one that drives the issues. The business example was that there were two engineers that refused to work together and were undermining each other and overall creating a toxic environment. The choice was to see which one quit, or to let one go. The alternative options that wasn’t considered was to let both of them go and give a promotion to high performers. This is the most aggressive approach but it shows a lot of strength and decisiveness while showing that you will not accept that behavior no matter who you are.
  • Discipline Equals Freedom – The book talks about how creating disciplines in your areas of responsibility creates a pathway to freedom. It is a bit counterintuitive and will likely lead to resistance, but the at its core there is a principle. Order, standards, control and regimen may sound like the opposites of freedom, but it leads to freedom. In the book he Jocko discusses how they changed their evidence collection process from a haphazard ransacking to a strict procedure that has very specific jobs that are optimized for efficiency. I personally have two experiences that can relate to how enforcing strict standards can create a ripple effect of greater freedom. The first is in the standardization of our month end closing process in the finance team at my work. Month end used to be crazy: long hours, huge variations at the end of the month, and a ton of stress and inefficiency. We went through the long process of creating standard operating procedures for all month end processes and centralizing some processes to increase efficiency. These standards took our month end process from 2-3 long days to being able to close within a 24 hour period and being able to easily close more than one division. The other example I have is an article that circulates at my work every so often. It is basically about how standardization increases Innovation. It sounds counterintuitive, but there is a point to it. Increased standardization doesn’t just lead to higher quality and scalability within an organization. It frees up a ton of creative potential since people aren’t trying to figure out the best way to do something: there is already a standard. It only works when utilizing the other principles of Extreme Ownership because you need to allow the people on the front line getting feedback to those standards and making sure we are always improving. The chapter goes on to discuss the ideal leader in the Dichotomy of Leadership:
    • A leader must be:
      • Confident but not cocky
      • Courageous but not foolhardy
      • competitive but a gracious loser
      • attentive to details but not obsessed by them
      • strong but have endurance
      • a leader and a follower
      • humble not passive
      • aggressive not overbearing
      • quiet not silent
      • calm but not robotic
      • close with the troops, but not so close than one becomes more important than another or more important than the good of the team
      • able to execute Extreme Ownership while exercising Decentralized Command
This was probably the best, most complete book on leadership I have read. I think the principles found in this book can be applied to any leadership position in any organization. The book was compelling and had great examples that reinforced the principles. This is just a brief overview of what I found to be the most  useful information, but you will only get the most of it if you read it and apply it yourself.

RG

Steve Jobs – Book Review

I am not going to do a summary of this book since it is a biography. After reading it I would recommend anyone who wants to be inspired to read it. I was sure to underline a few of the major themes from the book for my reference, but I do not want to take any of the continuity and context that the book as a whole will provide. Steve Jobs was an incredibly complex person. From the early days when he was looked down upon as an arrogant hippie kid that didn’t wear shoes or shower to being kicked out of Apple after clashing with the CEO. Ultimately, he found his way back to Apple, where he went on to create some of the most revolutionary products of the last 15 years. You can claim to not be an ‘Apple person’ but there is no denying the impact Jobs had on the world. Below is a list of things I highlighted, starred, sticky-noted, etc.

  • Sought fulfillment from a dual legacy (pg 306)
    • Building innovative products
    • Building a lasting company
  • Craftsmanship – even (especially) with the parts unseen
  • The idea that what is truly important is creating great things instead of making money
  • He positioned himself at the intersection of the arts and technology
  • Simplicity – like Atari’s instructions for their Star Trek game were “1. Insert quarter. 2. Avoid Klingons”
  • His “Reality Distortion Field” – If he has decided something is going to happen, it will happen. Despite all advice and naysayers.
  • IF you act like you can do something, then it will work. “pretend to be completely in control and people will assume that you are”
  • The goal of an entrepreneur: Make something you believe in and making a company that will last
  • Apple Marketing Philosophy
    • Empathy – connection with the customer
    • Focus – Eliminate the unimportant opportunities. “Deciding what not to do is as important as deciding what to do. That’s true for companies, and that’s true for products”
    • Impute – “people DO judge a book by its cover” – a great company must be able to impute its values from the first impression it makes
  • Execution – “in the annals of innovation, new ideas are only part of the equation. Execution is just as important”
  • Being naive can be good. Because you don’t know if something cannot be done.
  • “The goal is to do the greatest thing possible, or even a little greater” – Hertzfeld
  • “If we’re going to make things in our lives, we might as well make them beautiful” – Bud Tribble
  • By expecting your team to do great things, you can get them to do great things
  • On Hiring – Get people that are creative, wickedly smart and slightly rebellious
  • You have to be ruthless if you want a team of A players- it is easy to put up with a couple of B players. “A players only work with other A players, which means you cannot indulge B players”
  • Jobs to the Mac team:
    • Don’t compromise
    • It’s not done until it ships
    • The journey is the reward
    • The customers don’t know what they want until we’ve shown them
  • Jobs’ pitch to get Sculley on as CEO ” do you want to spend the rest of your life selling sugared water, or do you want a chance to change the world?”
  • Jobs on getting older: “In most cases, people get stuck in those patterns, like grooves in a record, and they never get out of them” (page 189)
    • He was able to get out of his groove at the age of 45 with the iPod.
    • I personally consider this SDMBA journey I am on as my way out of the deep groove I had worn. The first step is recognizing it.
  • An observation is that the greatest successes were of him leading a small team with a focus to create a great product
  • His diet obsessions reflected  life philosophy – ‘one in which asceticism and minimalism could heighten subsequent sensations…things led to their opposites’ (pg 260)
    • Material possessions often cluttered life rather than enriched it
  • Apple fell from grace under several CEO’s after Jobs was ousted in 1985 since “they cared about making money – for themselves mainly, and also for Apple – rather than making great products”
  • The “Think Different” campaign- “The Crazy Ones” ad
  • When he came back to Apple he decided to kill a ton of product lines. He drove focus on 4 products by drawing a four-squared chart. In the two columns he wrote “consumer” and “pro”. in the rows he labeled “Desktop” and “Portable”
  • Design principles: “less but better” from German industrial designer Dieter Rams.
    • “Simplicity is the ultimate sophistication”
    • Simplicity that comes from conquering complexities, not ignoring
  • Apple Stores: “You can’t win on innovation unless you have a way to communicate to customers”
    • One entrance
    • Customers should be able to intuitively grasp the layout of the store as soon astroturfing they enter
    • “Impute the ethos of Apple products: playful, easy, creative, and on the bright side of the line between hip and intimidating”
  • Rewriting- on several occasions, Jobs and his team hit a point where they realized what they were working on was not right.  Jobs said “If something isn’t right, you can’t just ignore it and say you’ll fix it later. That’s what other companies do”
  • “The mark of an innovative company is not only that it comes up with new ideas first, but also that it knows how to leapfrog when it finds itself behind”
  • Motivations matter (pg 407) “The older I get, the more I see how much motivations matter. The Zune was crappy because the people at Microsoft didn’t really love music or art the way we do…”
  • Never be afraid of cannibalizing yourself – “If you don’t cannibalize yourself, someone else will.” He pushed forward knowing the iPhone would cannibalize the iPod, and the iPad would cannibalize the laptop.
  • Second product syndrome – “it comes from not knowing what make your first product so successful” (pg 430)
  • Collaboration – When designing the Pixar studio, Jobs insisted on a large atrium that was designed to encourage random encounters. “creativity comes from spontaneous meetings, from random discussions…” (pg 431)
  • Stanford Commencement Speech: The best way to begin a speech is “Let me tell you a Story” (pg 456-457)
    • Dropping out of Reed College
    • How getting fired from Apple turned out to be good for him “The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything”
    • “remembering you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.”
  • The Apple Voice: Simple, Declarative, Clean
  • The importance of infusing an entrepreneurial and nimble culture into a company (pg 509)
  • Apple’s (and Jobs’) response to the “antennaegate” on page 523
  • Accountability needs to be strictly enforced.
  • The future:
    • At the intersection of biology and technology – pg 539
    • The intersection of technology and education – pg 553, 544
  • Keywords: FOCUS, creating GREAT products
  • Strong leaders should not be reluctant to offend or piss people off – pg 556 (about president Obama)
    • Polite an velvety leaders, who take care to avoid bruising others are generally not as effective at forcing change
    • “my job is to say when something sucks rather than to sugarcoat it”
  • Jobs had a binary view of the world. Things were either: the best or the shittiest. whether it was food, an idea, a person…
  • “nature loves simplicity and unity. So did Steve Jobs”
  • Bob Dylan – “if you’re not busy being born, you’re busy dying”

Books, Songs, and other things referenced in the book to look into later

Buy the book on Amazon

RG

Hackers & Painters – Book Review

Hackers and Painters by Paul Graham is an interesting read – much different from any of the other books I have read in this journey since it is a collection of his personal essays. I am not going to summarize the book like I have others, but I would like to write about some of the key insights I found that made me think a bit. If I had to summarize the book with a couple of key words, they would be: value creation, contrarian, a view inside the world of hacking, big ideas that are well thought out, and brilliant.

There are 15 total essays below is the list along with some of the key takeaways or quotes I took from them. There were a couple that went into the weeds on software languages and programming so I will briefly go over those.

  1. Why Nerds are Unpopular
    1. I took a couple of good notes in this section, but the summary is that the nerds are different and the social pressures of trying to be popular cause the “popularity middle class” students to try and push down the group that is different.
    2. The ‘nerds’ in school are are trying to play a different game from the others- one that is closer to the one played in the real world
    3. Graham says that the teachers do not know how cruel the kids are to one another. They are in a similar position to prisoners: their goal is to keep the prisoners on the premises, fed, and not killing one another.
    4. Things get better for nerds after school because in college and beyond the ‘pool’ gets a lot bigger and they can clump together.
    5. Graham argues that life seems awful to kids because the adults – who have no economic use for you- have abandoned you to spend years cooped up together with nothing real to do in the emptiness of school life.
  2. Hackers and Painters
    1. Graham says that Hackers and Painters have a lot in common. They are both creators. Hackers find themselves mislabeled as the ‘computer science’ which makes it seam like a science- and this has some negative implications from a research standpoint. I won’t labor it though…
    2. Hackers are like artists in that they look at the masters of the past to build in the future – like great painters, programers will look at source code and building upon their work.
    3. If you want to make money at some point – you should understand one of the reasons startups can beat massive companies. Companies want to dampen the variation in their process to avoid disasters. The problem with that is you end up dampening the high points as well as the low points.
      1. Big companies win by sucking less than other big companies- they aren’t shooting for making great products.
      2. The place to fight design wars is in new markets
  3. What you Can’t Say
    1. Ask yourself the following “do you have any opinions that you would be reluctant to express in front of a group of peers?” if the answer is no, you might want to think about that: everything you believe is something you are supposed to believe!?
    2. What would you get in trouble for saying?
    3. Heresy- what is shot down before even looking to see if it is true or not? indecent, improper, un-American, defeatist, etc
    4. Prigs – what are the taboos that we use? Graham suggests looking at what the picture the world looks like that we show our kids as a good place to see where the taboos are. Santa, sex, curse words, etc. A well brought-up teenage kid’s brain is a more or less complete collection of all our taboos – in mint condition!
    5. Mechanism: when everyone imitates the whim of some influential person
      1. “To launch a taboo, a group needs to be poised halfway between weakness and power. A confident group doesn’t need taboos to protect it. And a group needs to be powerful enough to protect it”
      2. Fashions tend to have the early adopters followed by the second, larger group driven by fear – that is afraid if they do not adopt they will stand out because they are afraid of standing out.
    6. Why?
      1. Challenge yourself to think contrarian because it is good for the brain. “to do good work you need a brain that can go anywhere. And you especially need a brain in the habit of going where its’s not supposed to”
    7. Pick your battles-  “argue with idiots, and you become an idiot” The most important thing is to be able to think what you want, not say what you want.
      1. The trouble with keeping your secrets to yourself is that you are missing out on the advantages of discussion: talking about an idea leads to more ideas.
    8. Always be questioning
      1. Everyone thinks that they are open-minded, though they will quickly draw the line at things that are really wrong. “in other words, everything is ok except things that aren’t”
      2. Always be questioning. That’s the only defense. What can’t you say? and Why?
  4. Good Bad Attitude
    1. The term “hacker” to the popular press means someone who breaks into computers. To programmers, this same term means ‘someone who is a good programmer’
    2. Graham tries to show the logic behind the mind of a hacker in this essay. To oversimplify it, it is someone who can master something. Or make it do whatever they want regardless of whether the computer wants to or not. Hackers are notorious for wanting to get inside things they are not supposed to: picking locks, breaking into computers, Jobs and Wozniak’s Blue Boxes to hack free long distance phone calls… etc.
      1. Show a hacker a lock and the first thing they will try to do is pick it
    3. Hackers see intellectual property and patents as a threat to the intellectual freedom they need to do their job
    4. “Hacking is the essence of American-ness. It is no accident that Silicon Valley is in America, and not France, or Germany, or England, or Japan. In those countries, people color inside the lines.
    5. The founding fathers of the US sound more like hackers – “the spirit of resistance to government” Jefferson wrote, “is so valuable on certain occasions that I wish it always to be kept alive.”
    6. Summary: Break the rules
  5. The Other Road Ahead
    1. This essay is about the starting of Graham’s company ‘Viaweb’ there is a lot of good stuff in the essay, but I want to focus on some more specific items
    2. For Hackers, there are two reasons you probably haven’t started a startup:
      1. You don’t know anything about business
      2. You’re afraid of competition
        1. Graham argues that neither of these barriers are big enough to be worried about
    3. There are two things you have to know about business:
      1. Build something users love
      2. Make more money than you spend
        1. “if you get these two right, you are ahead of most startups. You can figure out the rest as you go>”
    4. Making something people love:
      1. Make it clean and simple that you would want to use yourself
      2. Get version 1 out fast and continue to improve the software
        1. listen to users as you do but different users are right about different things
          1. Less sophisticated users show you what you need to simplify/clarify
          2. Most sophisticated users tell you what you need to add
      3. Compare your product to what it could be, not what your competition is
      4. If you can’t design software as well as implement it, don’t start a startup.
  6. How to Make Wealth – page 87 (good one to read again in the future)
    1. A startup is a small company that takes on a hard technical problem
    2. Ask yourself “how much smarter are you than your job description expects you to be?”
    3. If starting a startup was easy, then everyone would be doing it
    4. The key is this: you just have to start doing something people want
    5. Money is not wealth,  it is a side effect of specialization Wealth is created when you do something valuable (something people want)
    6. “Some of the best programmers are libertarians. In our world, you sink or swim, and there are no excuses. When those far removed from the creation of wealth – undergraduates, reporters, politicians,- hear the richest 5% of the people have half the total wealth, they think injustice! An experienced programmer would be more likely to think is that all? The top 5% of programmers probably write 99% of the good software.”
    7. In a company, the work you do is averaged with a lot of other people’s
      1. All a company is is a group of people working together to do something people want. It is doing something valuable that matters, not joining the group.
    8. Companies are not set up to reward people for working harder. You cannot offer to your boss that you will work 10X as hard if he will pay you 10X your salary. The official fiction of the workplace is that you are already working as hard as you can. The other problem is that the company has no way of measuring your work.
      1. This is part of why group work slows down difficult problems: in a large group, your performance is not separately measurable – and the rest of the group slows you down
    9. If you are in a job that feels safe you will never going to be rich: if there is no danger, there is almost no leverage
    10. Your goal is to be part of a small group working on a hard problem: Smallness = measurement
    11. A startup is not merely a group of ten people, but ten people like you
    12. Creating wealth has historically been due to the development of new technology
      1. To do this you need to deliberately seek hard problems
      2. Create barriers to entry
      3. As a rule, start by picking a hard problem, and at every decision point, take the harder choice
    13. For most people the most powerful motivator is not the hope of gain, but the fear of loss.
    14. Investors in startups care mostly about one thing: how many users you have. This is the metric you need to track for yourself.
    15. “A startup is, economically: a way of saying, I want to work faster. Instead of accumulating money slowly by being paid a regular wage over the course of fifty years, I want to get it over with as soon as possible.”
      1. The problem with working slowly isn’t that technological innovation happens more slowly, it is that it doesn’t happen at all.
  7. Mind the Gap
    1. Making money is a specialized skill. Nobody complains that some people are better at painting (writing, basketball, etc.) than others, but when it comes to money people think that inequity is wrong.
    2. Graham has three reasons for disparities of wealth:
      1. Daddy model of Wealth: Children tend to misunderstand wealth, confuse it with money, and think there is a fixed amount of it that is distributed by authorities vs. something that needs to be created and can be created unequally
        1. Kids do not create wealth, so they rely on what is given to them. When you are given something, it seems like it should be distributed equally.
        2. How much someone’s work is worth is not a policy question, it is determined by the market. That is why a CEO gets paid on average 100X the average person. Would you rather have 100 ‘average’ people running your company or Steve Jobs? The point isn’t that they are 100X more productive/skilled, but even if it is 10X, it is concentrated in one person – which makes it a lot more valuable.
        3. Saying certain kinds of work are underpaid is identical to saying that people want the wrong things
        4. The distribution may be unequal, but it is hardly unjust
      2. Stealing it
        1. Taxation/Confiscation
          1. The way to get rich here was not to create wealth but to serve a ruler powerful enough to appropriate it.
        2. The rise of the middle class caused wealth to stop being a zero-sum game
          1. Jobs and Wozniak didn’t have to make us poor to make themselves rich: they made things that made our lives materially richer. They had to or we wouldn’t have paid for them.
        3. For most of the world’s history, the main (and fastest) way to get rich was to steal it.
      3. Lever of Technology – will this increase the gap between the rich and the poor?
        1. It will certainly increase the gap between the productive and unproductive
          1. If you look at High School kids, they could get a job at McDonalds, or they could learn to write software or design websites: only some of them will, the rest will be flipping burgers.
    3. Alternative to an Axiom
      1. Policies are often criticized because they will increase the income gap between the rich and poor – It might be true that this increased gap might be bad, but you shouldn’t say that it is axiomatic.
        1. Graham argues that an increase in income variation is a sign of health: technology seems to increase variation in productivity faster than linear rates. If we do not see corresponding variation in income there are three possible explanations:
          1. Technical innovation has stopped
          2. People who would create the most wealth aren’t doing it
          3. They aren’t getting paid for it
            1. 1&2 would be bad, 3 would mean that only the things that are fun to do would get done
              1. The unfunny kinds of wealth creation would slow dramatically in a society that confiscates private fortunes. Several examples on page 119
      2. Graham finishes the essay saying that “you need rich people in your society not so much because in spending their money they create jobs, but because of that they have to do to get rich. Not trickle down effect where you get hired as the waiter, but if you let Henry Ford get rich he will replace your horse with a tractor. Don’t bust up the incentives for technological innovation and putting in the hard work.
  8. A Plan for Spam
    1. Graham talks about his strategy and program (pet hobby maybe?) for eliminating spam. I won’t go into the details here.
  9. Taste for Makers
    1. “taste” is the topic of this essay, with Graham pointing out that it is one of the ‘half-truths’ adults told us when we were growing up. You have been told that ‘taste’ is just a matter of personal preference but at the same time when you go to a museum you need to pay attention since Leonardo Da Vinci was a great artist. How are we supposed to reconcile these conflicting messages?
    2. Mathematicians consider good work to be ‘beautiful’, but what are the components that make something beautiful?
    3. How do you make good stuff?
      1. “if you want to make something that will appeal to future generations, one way to do it is to try to appeal to past generations”
    4. Good Design
      1. Good design solves the right problem
        1. Make sure you are answering the right question: what makes the most sense? Example of different font style – the most important thing about this decision is legibility, and it is easier to tell apart a lowercase g from y in Times New Roman than other fonts.
      2. Good design is suggestive
        1. They should suggest something, say something. Not telling you something, it lets your imagination fill in the gaps. For example, everyone makes up their own story about the Mona Lisa
      3. Good design is often slightly funny
        1. May not have to be funny, but it’s hard to imagine something that could be called humorless also being called good design
      4. Good Design is Hard
        1. If you’re not working hard, your probably wasting your time
        2. Form follows function, or form should follow function
        3. Wild animals are beautiful because they have hard lives
      5. Good Design looks easy
        1. Like great athletes, great designers make it look easy
        2. “when people talk about getting in ‘the zone’ I think what they mean is that the spinal cord has the situation under control. Your spinal cord is less hesitant, and it frees conscious thought for the hard problems
      6. Good design uses symmetry
        1. Nature uses it a lot, which is a good sign
        2. The danger of symmetry, and repetition especially is that it can be used as a substitute for thought.
      7. Good design resembles nature
        1. Nature has had a long time to work on the problem, So it is a good sign when your answer resembles nature.
        2. It is not cheating to copy!
        3. “The point of painting from life is that it gives your mind something to chew on: when your eyes are looking at something, your hand will do more interesting work.”
      8. Good design is redesign
        1. Experts expect to throw away some early work
          1. It takes confident to say ‘there is more where that came from’
          2. Don’t convince yourself that ‘its not that bad’
          3. Fear that if you try to redo something, it will turn out even worse
        2. “Dangerous territory, that. If anything, you should cultivate dissatisfaction”
      9.  Good design can copy
        1. A novice imitates without knowing it. Next he tries to be completely original. Then he decides its more important to be right than original
        2. If you don’t know where your ideas are coming from, you are probably imitating an imitator.
        3. The ambitious are not content to imitate. The second phase in growth of taste is a conscious attempt at originality
        4. The masters just want to get the answer right, if part of the right answer has already been discovered by someone else, that’s no reason not to use it
      10. Good design is often strange
        1. Not just beautiful, strangely beautiful
        2. “Einstein didn’t try to make relativity strange. He tried to make it true, and the truth turned out to be strange.”
        3. “Michelangelo was not trying to paint like Michelangelo. He was just trying to paint well; he couldn’t help painting like Michelangelo”
      11. Good design happens in chunks
        1. By location: fifteenth century Florence for painting, Silicon Valley, Grand Rapids beer scene
        2. Companies: lockheed’s Skunk Works; Manhattan Project, etc.
        3. Find the current hot spots and go to them
      12. Good Design is often daring
        1. “Today’s experimental error is tomorrow’s new theory. IF you want to discover great new things, then instead of turning a blind eye to the places where conventional wisdom and truth don’t quite meet, you should pay particular attention to them.”
        2. People in the past have made beautiful things by fixing something they thought was ugly
        3. “The recipe for great work is: very exacting taste, plus the ability to gratify it.”
  10. Programming Languages Explained
    1. Skipping this one – he goes pretty in-depth here (starts on page 146 for future reference)
  11. The Hundred Year Language
    1. “What programmers in a hundred years will be looking for, most of all, is a language where you can throw together an unbelievably inefficient version 1 of a program with the least possible effort… Inefficient software isn’t gross. What’s gross is a language that makes programmers do needless work”
    2. The holy grail of programming languages is reusability
  12. Beating the Averages
    1. Ask yourself: what makes your startup odd, unique, different
      1. A startup cannot do what all of the other startups are doing
      2. If you aren’t doing something odd, you’re in trouble
    2. At Viaweb, their secret sauce was the programming language Lisp, which allowed them to rapidly write their software
    3. In business, there is another more valuable than a technical advantage your competitors don’t understand
    4. A startup should give its competitors as little information as possible
    5. A startup has choices: if you have a choice in several languages, it is a mistake to program in anything except the most powerful one
    6. Comments about the power continuum for languages on page 176 which can be applied to other technologies. Basically – if you do not understand something, you do not know if you are looking up or down the power continuum. If you program in an inefficient language, it is easily to look down on other languages, but if you do not understand them, you might not realize that you are actually looking ‘up’ the continuum to something that is more powerful.
      1. “they’re satisfied with whatever language they happen to use, because it dictates the way they think about programs”
    7. Look at your competition to see what technology (languages) they are using- you can see it by taking hints from their job postings: are they looking for a specific type of experience? like C++, Java? etc.
  13. Revenge of the Nerds
    1. Talks about the ‘pointy haired boss’ that:
      1. Knows nothing about technology
      2. has very strong opinions about it
        1. This is why he says you need to use a certain ‘mainstream’ language: because it is a standard
          1. There will always be a lot of java programmers out there (easy to hire)
          2. I won’t get in trouble for using it – its a standard!
        2. He believes that all programming languages are pretty much equivalent
    2. If you start a startup, don’t design your product to please VC’s or acquirers. Design your product to win over the users, everything else will follow
    3. Beware: In technology, the current ‘best practice’ is the average,  not the best technology
      1. Technology should often be cutting edge.
  14. The Dream Language
    1. No real summary here – starts on page 200 about his vision for the hacker’s dream language: fast, efficient in writing, brief syntax, etc.
  15. Design and Research
    1. No real summary here, just a couple of high level takeaways- starts on page 216
    2. “If you think you’re designing something for idiots, odds are you’re not designing something good, even for idiots.
    3. Morale is key in design – for example if you are bored when you draw something, your drawing will be boring.
    4. “building something by gradually refining a prototype is good for morale because it keeps you engaged. In software, my rule is: always have working code. (Coster implications)
    5. “Design means making things for humans. But its not just the user who’s human. The designer is human too.

Overall I enjoyed this collection of essays primarily because they challenge you to question things. They challenge you to think outside of the box you are in. There is a contrarian spirit to this book that is really inspiring and makes me take a look at my life, my biases, my safe spots, and the things that are engrained in by operating system.

RG

 

 

 

 

 

 

 

 

Zero to One – Book Review

Zero to One – Peter Thiel is an book about how to not just start a business, but how to make sure it defines a new category and progresses the world further. There is quite a bit of contrarian thought process similar to Hackers and Painters. Peter Thiel starts out the book saying that the big industry defining businesses will only happen once: Bill Gates and the operating system, Mark Zuckerberg and social networks, etc. These are one-time events and the next ‘Bill Gates’ will not create a new operating system, they will create something completely new that nobody had ever thought of. If you were to make a ‘new version’ of current technology, Thiel would call this going from 1 to n. It is incremental relative to what has already been done. The premise of 0 to 1 is that you are creating value from something that didn’t exist before (or didn’t exist in the dominant form you would see from Facebook, Microsoft, Google, etc).

Thiel says that one of the main questions he asks during a job interview is: “what important truth do very few people agree with you on?” He is looking for what inspires a contrarian mindset in the person he is going to hire because if they do not have any unique ideas, they are only thinking what they had been taught in school without thoughts of their own. “brilliant thinking is rare, but courage is in even shorter supply than genius.”

Challenges for the Future

  • While we cannot completely predict the future, we do know two things for certain:
    • It is going to be different
    • It must be rooted in today’s world
  • Progress can be defined in two ways:
    • Horizontal progress builds on previous things that we already know work (1 to n)
      • Globalization is a great example of horizontal progress: taking things that work somewhere (U.S) and moving them other places (China, Africa, etc.)
    • Vertical progress is the creation of something completely new (0 to 1)
      • More difficult to imagine because it is something that has never been done before.
      • The single word definition for vertical progress is technology, or any new or better way of doing things.
  • Why this matters?
    • “Spreading old ways to create wealth around the world will result in devastation not riches. In a world of scarce resources, globalization without new technology is unsustainable”
  • Startup thinking
    • It is hard (and rare) to develop new things in big organizations
    • It is also hard to do it all by yourself
    • “Startups operate on the principle that you need work of other people to get stuff done, but you also need to stay small enough so that you actually can.”

Dot Com Crash

  • The Dot Com bubble led to the Silicon Valley learning the following lessons that are still used dogmatically in today’s startup world:
    • Make incremental advances
    • Stay lean and flexible
    • Improve on the competition
    • Focus on products, not sales
  • Thiel argues that the following are probably more correct: 
    • It is better to risk boldness than triviality
    • A bad plan is better than no plan
    • Competitive markets destroy profits
    • Sales matters just as much as product
  • Thiel argues you shouldn’t necessarily oppose the cloud, but you should think for yourself

All Happy Companies are Different

  • Ask yourself the following business question: what valuable company is nobody building?
  • Thiel goes into the differences between monopolies and perfect competition.
    • Under perfect competition, no companies make an economic profit
    • Thiel views monopolies as the kind of business that is so good at what it does that no other firm can offer a close substitute.
      • Monopolies are the only way to create and capture lasting value. You don’t want to build an undifferentiated commodity business
      • The lesson here is that you want to stay away from competitive markets and focus on where you can create a monopoly.
      • When looking at your target market you need to include the relevant data: does Google compete with the U.S. Search advertising industry? The U.S. Online advertising? or even the global advertising industry? Companies that have a monopoly will typically downplay their significance in the market. Meanwhile the company that is in a fiercely competitive market will try to show how dominant they are in a smaller market than what they should be measuring themselves against-this can be very dangerous if you are not correctly understanding your market and competition.
  • Are monopolies bad?
    • No- Only in a world where nothing changes. In a static world, the monopolist is just a rent collector.
    • In the real world you can invent new and better things
    • If monopolies were bad, why would the government protect monopolies by creating and protecting patents?
    • Monopoly is the condition of every successful business
    • Monopolies are the economic wild card that create value in an economist’s static model. We should retrain our brain- “monopolies are good”

Competition and Rivalry

  • “Rivalry causes us to overemphasize old opportunities and slavishly copy what has worked in the past”
  • “Winning is better than losing, but everybody loses when the war isn’t one worth fighting”
  • Thiel’s PayPal was in a rivalry with Elon Musk’s X.com as the internet bubble approached and they realized they had to merge together to survive the
  • Don’t let your ego fight over trivialities

Last Mover advantage

  • A monopoly is only a great business if if can endure in the future
    • A tech company’s value is typically expected to come 10-15 years in the future
    • The most important question for durability is this: “Will this business still be around a decade from now” 
      • Numbers will not tell you the answer to this question, you will need to think critically about the qualitative characteristics of your business
  • Characteristics of a monopoly
    • Proprietary technology – a good rule of thumb is that it should be 10X better than ints closest substitute
      • This means you will need to invent something completely new to escape the competition
      • Examples
        • Apple iPad combined integrated design and operating system that solved the shortcomings of all other tablets to thatpoint
        • Amazon launched its claim to be the ‘world’s largest bookstore’ because it could request any book from their suppliers vs having to hold inventory of 100k books like Barnes and Noble
    • Network Effects
      • Facebook works because all of your friends are on Facebook.
      • You need to be able to start small, but also able to scale
        • Facebook started as just for Harvard students, but expanded to the world
        • “This is why successful network businesses rarely get started by MBA types: the initial markets are so small they don’t even appear to be business opportunities at all”
    • Economies of Scale
      • Software is a natural one here, once you create the product, incremental variable cost is close to zero
      • A service business like a yoga studio for example could never become a monopoly because of the cost associated with spreading , hiring, training, etc.
        • Air BnB and Uber were able to try and solve these issues by adding a software model to services
    • Branding
      • A company has a monopoly on its brand by definition – try to create a strong brand
        • Apple is the strongest tech brand, but you need to realize that it was build on the back of superior products.
        • Beginning with brand rather than substance is dangerous – Yahoo! story on page 53
        • When Steve Jobs returned to Apple, he slashed several product lines in order to focus on the handful of opportunities for 10X improvement
  • Building a monopoly
    • Choose your market carefully and expand deliberately- start with a very small market: it is easier to dominate a small market than a large one.
      • If you think your initial market might be too big, it almost certainly is.
      • “the perfect target market for a startup is a small group of particular people concentrated together and served by few or no competitors”
        • Any big market is a bad choice
        • Any big market already served by competing companies is even worse
          • Big red flag when entrepreneurs talk about getting 1% of a $100B market
            • The large market will lack a good starting point or be open to competition
    • Scaling up
      • Amazon shows how you can go from dominating a niche to expanding to adjacent markets: CD’s, videos, and software
        • Ebay did the same thing with collectibles: Beanie Babies, which was able to scale to other products, but it didn’t work as well for commodity products that you would buy at Amazon.
    • Don’t Disrupt- avoid competition altogether
      • “if you truly want to make something new, the act of creation is far more important than the old industries that might not like what you create.”
      • “if your company can be summed up by its opposition to already existing firms, it can’t be completely new and it’s probably not going to be a monopoly”
      • First mover advantage
        • This is tactic, not a goal. What really matters is making the last development in a market that allows them to enjoy years of monopoly profits

You Are Not a Lottery Ticket

  • Jack Dorsey said on Twitter once “success is never accidental” he took a lot of heat for it (coming from a billionaire white man) but there is a lot of truth to this statement. Waldo Emerson wrote “Shallow men believe in luck, believe in circumstances… strong men believe in cause and effect”
  • Thiel distinguishes between definite and indefinite people
    • A definite view – favors firm convictions , instead of pursuing many-sided mediocrity and calling it ‘well-roundedness.’ the goal is to make yourself indistinguishable.
    • Indefinite attitudes towards the future rely on randomness, lack of concrete plans to carry out. Becoming omnicompetent in order to be prepared for the completely unknown future.
  • Thiel created a matrix to show the difference between Definite and Indefinite and how they relate to Optimism and Pessimism. It is worth a read starting on page 62, and the diagram is below:

Thiel Definite

  • This matrix shows different scenarios/mindsets of the future along with the financial  (investments vs. savings scenarios) that correspond.
    • Indefinite Pessimism
      • Europe in the present keeps on kicking the can down the road. they know the future will be bleak, but they do not know what to do about it. They are reactionary when things happen, and there is hope that things won’t get worse.
    • Definite Pessimism
      • China knows that their future will be worse than it is today, but know they must prepare for the downfall. Savings are really high and the rich are trying to get their money out of the country
    • Definite Optimism
      • Knows the future will be better than the present if we plan and work to make it better. Thiel mentioned several large, bold things that have been accomplished in the past (nearly every decade until the 70’s): manhattan project, Empire state building, Interstate system, men on the moon/space program, etc. These bold strokes of innovation and growth have been replaced by Indefinite Optimism where we are unwilling to take major risks.
    • Indefinite Optimisim
      • America today- there is little investment and value creation or risk. Thiel blames the Baby Boomer population that “learned from childhood to overrate the power of chance and underrate the importance of planning”
    • Indefinite thinking spreads to other areas
      • Finance- is the only way to make money when you have no idea how to create wealth
      • Politics- the government used to be able to coordinate complex solutions to problems, but today the gov only provides insurance and entitlements
      • Philosophy
      • Life- instead of searching for a way to prolong lives, we have started looking at ‘life tables’ to tell us how long we are supposed to live. On page 75 Thiel put a side by side comparison of Biotech startups (indefinite thinking) vs. Software startups (definite thinking). This is why U.S. companies are letting so much cash pile up on their balance sheets- they don’t have a clear idea of what they should do with it.
    • The problem with all of this is that it is unsustainable: “how can things get better if there are no plans for it?”
      • For startups this is especially true- there is advice out there that you should build something and iterate it based on feedback. This is an ‘indefinite’ plan – Thiel argues that while Darwinism might be a fine theory in other contexts, for startups intelligent design works best.
      • Steve Jobs saw this in that you can change the world through careful planning- When the iPod was released, it was seen as ‘a nice feature for macintosh users’ but Jobs planned on the iPod to be the first generation of portable post-PC devices.
    • Thiel argues we need to have a cultural revolution to break us out this ‘indefinite thinking’ and back to a definite future. “It begins by rejecting the unjust tyranny of Chance”

Follow the Money: The Power Law (starting page 82)

  • I won’t spent too much time on this chapter, it is mainly about VC’s. The basic idea about the ‘power law’ is that the 80/20 rule applies to startups as well. A VC might invest in several startups in order to build a portfolio, but most likely only one or two will be very successful. What typically happens then is that they will give all of their attention to the struggling startups while neglecting the one that could make them the most money and gain that monopoly footing.
    • VC’s also have a curve where they will have the initial cash investment, then several of the startups will likely fail before the ones that succeed actually pay out. This can be a major cash issue for some VC’s

Secrets

  • “what valuable company is nobody building?” Thiel argues that every correct answer is necessarily a secret, or something important and well known. If you break the concept of ‘ideas’ into three groups, they would be:
    • Conventions – an easy truth we teach to grade school kids
    • Secrets – something that is hard, but doable. It is possible to figure these out with a lot of work
    • Mysteries – the unknown and unsolvable
  • Thiel argues we do not look for secrets like we used to. He gives a couple of reasons for this:
    • Incrementalism – we are taught the right way to do things is one small step at a time. This is how our education reward system is currently set up- there is no incentive for being an over-achiever.
    • Risk aversion- people are scared of secrets because they are afraid of being wrong.
    • Complacency- The social elites have the most freedom and ability to explore new thinking, but are often the least likely to. Why would you search for a new secret if you are already comfortably collecting rent on the stuff that has already been done?
    • Flatness- basically this is the mindset that “if it were possible to discover something new, wouldn’t someone from the faceless global talent pool of smarter and more creative people have found it already?”. This voice of doubt dissuades people from even trying: “we have given up our sense of wonder at secrets left to be discovered”
  • Why secrets must still exist
    • “to say that there are no secrets left today would mean that we live in a society with no hidden injustices”
      • look for irrationality
      • look for bubbles
      • look for things that are unjust
      • look for things that should be better
      • Think to yourself “in 100 years, what would I expect to replace this technology?”
      • Thiel talks about a ton of ideas on page 102 saying “The actual truth is that there are many more secrets left to find, but they will yield only to relentless searchers
  • The Two kinds of secrets
    • People – Things that people don’t know about themselves or things they hide because they do not want others to know
      • Finding out secrets about people, you need to ask yourself ‘what are people not allowed to talk about? what is forbidden or taboo?’ (this was also discussed in one of Paul Graham’s essays in the book Hackers & Painters
    • Nature – some undiscovered aspect of the physical world
  • What to do with secrets?
    • It is rarely a good idea to tell everybody everything you know. There is a golden mean between telling nobody and telling everybody. Thiel’s rule is “who ever you need to, and no more”
    • “Every great business is built around a secret that is hidden from the outside”

Foundations

  • “Thiel’s Law”: a startup messed up at its foundation cannot be fixed. Bad decisions made early on are very hard to correct after they are made.
    • Who you choose to partner with- ‘how well the founders know each other and how well they work together matter just as much (as technical abilities and complementary skill sets)
    • Ownership- its very hard to go from 0 to 1 without a team. In the boardroom for example, the ideal board size is three (and it should never exceed five) Thiel splits the functions of 3 concepts:
      • Ownership – who legally owns the equity?
      • Possession: who actually runs the company’s day to day business?
      • Control: who formally governs the company’s affairs
    • Team- everyone you involve should be involved full time (with some exceptions) but is key to note that if you do not own stock options or draw a regular salary, you are fundamentally misaligned (consulting).
    • Cash is not king- for startups, Thiel has found that a company does better the less it pays the CEO. Two main reasons being that if they make too much they risk becoming too much like a politician than a founder, it also sets an example if you are taking the lowest salary in the company. It also sets an example if you take the highest salary in the company
    • Vested Interests – Equity is seen as a useful form of compensation for cash-strapped startups. You need to allocate it very carefully- do not give everyone even shares. See page 115 for more on this. The key is to keep all compensation and equity details secret
    • Extending the Founding – Bob Dylan said ‘ he who is not busy being born is busy dying’. Thiel takes this to mean ‘being for’ is not a one time event. The most valuable company maintains an openness to invention that is most characteristic of beginnings

The Mechanics of Mafia

  • What would the ideal company culture look like? Immediately you think of the working conditions at Google or other Silicon Valley companies. Thiel argues that without substance the perks will not work.
    • “A startup is a team of people on a mission and a good culture is just what that looks like on the inside”
  • The PayPal Mafia as it is known has an impressive list of the initial PayPal team that has gone on to start seven businesses -all worth at least one billion each
    • The culture was strong enough to transcend the original company
  • Recruiting
    • Should never be outsourced
    • The first core group will likely be attracted by large equity stakes or high profile responsibilities
    • You need to answer the question “why should the 20th employee join your company?”
      • How do you attract someone who is also looking at a position at Google? There is no specific answer, but you need to convey your answer around your mission and your team: why is your mission compelling. Explain why the company is a good match for him personally
      • Offer them a an opportunity to do irreplaceable work on a unique problem alongside great people
    • Your goal is to build a tribe of like-minded people fiercely devoted to the company’s mission
    • “the best thing I did as a manager at PayPal was to make every person in the company responsible for doing just one thing“- defining roles reduced conflict, it simplified managing people.
  • Cults and Consultants
    • Thiel created a linear spectrum that showed consultants on one side with cults  on the other. The idea being that consultants are detached and the cults are dogmatic and completely devoted. He put “Zero to One Companies” in a circle on the side closer to cults. stressing that while cults tend to be fanatically wrong about something, successful startups tend to be fanatically right about something those on the outside have missed.

If you Build It, Will They Come? (starting page 126)

  • This chapter is about the importance of sales. Something a lot of startups will disregard as less important. The problem is that if you have invented something new but don’t have an effective way to sell it you have a bad business, no matter how good the product is.
  • Strong distribution plan (for effectiveness)
    • Your Customer Lifetime Value (CLV) must exceed the amount you spend on average to acquire a new customer (Customer Acquisition Cost (CAC))
  • There is a continuum of sales below that shows the target markets and distribution channels to use. There is a noticeable dead spot in the ‘sales to small business’ section

sales continuum

  • Complex Sales- those of 7 figures or more deal with large businesses and bureaucracies and government and requires a sales grandmaster (Thiel points to Elon Musk) that focuses on just a few of the most crucial people to overcome political inertia. Customer is going to want to talk directly with the CEO on business deals of this size.
  • Personal sales – usually takes the work  of a sales team that can move the product to a wider audience than the CEO alone. Sometimes it is key to focus small and expand (example on page 133)
  • There is a dead zone in the ‘sales to small business’ section. For example if you wanted to sell to all convenience stores or CNC tool shops it is a bit more difficult (less profitable and lower CLV-CAC value) since it needs a personal sales effort for a relatively small sale.
  • Marketing and Advertising- For relatively low priced products that have mass appeal but lack of method for viral distribution- you do not see door to door sales of laundry detergent. Startups need to be careful not to compete on advertising with big business budgets.
  • Viral marketing- “a product is viral if its core functionality encourages users to invite their friends to become users too (Facebook, PayPal)
  • The Power Law of Distribution – If you can get just one distribution channel to work, you have a great business.
  • Selling to non-customers – selling ideas to investors, stakeholders, employees, etc. “never assume people will admire your company without a public relations strategy.”
  • “Everybody Sells” – look around, if you don’t see any salespeople, your the salesperson!

Man and Machine

  • This chapter is about the rise of AI, Automation, machine learning, etc. Thiel has a more optimistic view of the rise of the machines. He believes that the best companies will use technology as complementary vs. a substitute for workers.
  • “The most valuable businesses of the coming decades will be built by entrepreneurs who seek to empower people rather than make them obsolete”
  • The Complementary vs substitute attitude is in part because he recognizes computers and humans are better at doing completely different things from one another. For example, it was a big deal when supercomputers were able to identify a cat with 75% accuracy from millions of YouTube thumbnails. But he put this into perspective that a 4 year old can do this with 100% accuracy.
    • Computers are good at handling a lot of data
    • Humans are good at making judgements
  • Computers are tools, not complements
    • “better technology in law, medicine, and education won’t replace professionals; it will allow them to do even more”
    • The REAL question that companies of the next generation need to ask is “how can computers help humans solve hard problems?”

Seeing Green (pg 152)

  • This chapter gives a nice overview of the 7 questions to ask and runs through a couple of examples of companies and industries that have succeeded and failed. As a side note, this is also a great chapter from an investor’s point of view. If you are investing in a startup company you should be asking yourself these 7 questions about the potential investment.
    • Engineering: Can you create a breakthrough technology instead of just incremental improvements?
    • Timing: Is this the right time to start your particular business?
    • Monopoly: are you starting with a big share of a small market?
    • People: Do you have the right team?
    • Distribution: do you have a way to not just create but deliver your product?
    • Durability: Will your market position be defensible 10 and 20 years into the future?
    • Secret: Have you identified a unique opportunity that others don’t see?
  • Starting on page 156, Thiel went through an example based on everything the “Cleantech movement” got wrong in the late 2000’s and compared it to Elon Musk’s Tesla- part of the movement, but was strategic in hitting all seven of the questions.
    • This isn’t to say that it is not an opportunity, but the companies all were pushing the same technology and it became highly competitive. They were all trying to ‘shoot an elephant’ when it came to the massive market opportunity. Tesla shows a good example of the exception.

The Founder’s Paradox

  • Thiel argues that founders hold onto the more ‘extreme’ traits of the personality spectrum (below). Founders also are likely to have ‘fatter’ tails when it comes to the graph. Founder Distribution.png
  • We should be more tolerant of the founders who seem strange or extreme; we need unusual individuals to lead companies beyond mere incrementalism.

Conclusion: Stagnation or Singularity

  • Thiel finishes the book with a prophecy/challenge. He says there are 4 scenarios that could happen in the future:
    • Recurrent collapse – a more historical view of how things have been in the past: an alternation between prosperity and ruin.
    • Plateau – This is what most people seem to assume: that the ‘developed’ world will plateau and the developing world will catch up. Overall the future would look a lot like the present.
    • Extinction – A collapse so devastating that we won’t survive it
    • Takeoff – This is likely the most difficult to imagine: accelerating takeoff toward a much better future
  • The challenge to us is “which of the four will it be?”

RG

 

 

 

 

Getting To Yes- Book Summary

Getting to Yes – by Roger Fisher and William Ury

Getting to Yes is a national bestseller that was published in the early 80s with the intent to study and improve successful negotiation tactics. To start, they want to set some guidelines for what makes a negotiation successful. They judge a negotiation on three criteria:

  • Should be produce a wise agreement if agreement is possible
  • It should improve or at least not damage the relationship between the parties involved
  • It should be efficient (no time wasted)

Positional Bargaining – What we want to avoid is what the authors call positional bargaining – basically what you would call haggling: you start your sales price at $100, the counter offer is $40, and you go back and forth until it is finally negotiated to a price both can agree on. This is inherently dishonest and inefficient. The other problem is that it locks your ego in with your position. you tend to get locked in and want to stay consistent/save face because of what you have said in the past. There is also the risk that due to the emotional investment, anchoring and  arguing over positions that no deal will be made at all. Additionally, with positional bargaining, the more people that are involved in a negotiation, the more serious the drawbacks to positional bargaining. It is also not an answer to be a soft negotiator because it leaves you vulnerable to the other person that is playing hardball. In positional bargaining, the negotiating game is biased in favor of the hard player. There is a comparison between the hard and soft negotiator on page 9.

What is the alternative?? The game of negotiation takes place at two levels: it addresses the substance, and it addresses the procedure for dealing with the substance. The goal is not to decide between Hard and Soft positional bargaining; rather it is to say ‘neither’ and change the game (sounds like Tim Ferriss). The goal here is on Principled Negotiation or Negotiation on the merits. This can be reduced to 4 basic points:

  1. People – separate the people from the problem. You want to keep the emotions out of the negotiation as much as possible. You want people attacking the problem, not each other.
  2. Interests – focus on the interest, not positions. You want to satisfy their underlying needs. Thus you need to understand what it IS that they actually want.
  3. Options – generate a variety of possibilities before deciding what to do
  4. Criteria – insist that the result be based on some objective standard. Market value, expert opinion, custom, standard, law, etc. that can be used objectively.

There are three stages to a negotiation, each dealing with the four elements above:

  1. Analysis – Where you are trying to diagnose the situation, gather information and organize it. understand the people issues involved, note the options already available.
  2. Planning – Generate ideas and decide what you are going to do. Generate additional options and criteria for deciding.
  3. Discussion – Join to seek agreement on objective standards for resolving opposed interests. Generate options that are mutually advantageous.

Separate the people from the problem

Remember that negotiators are people first, they have emotions, values, different backgrounds, different viewpoints. They are unpredictable, and so are you. If you fail to deal with other people sensitively as humans prone to human reactions, it can have disastrous results for a negotiation. Always ask yourself “Am I paying enough attention to the people problem?”. Every negotiator has two kinds of interests: the substance and the relationship. The goal should always be to have a customer become a regular one. You also want to work on the ‘people problem’ by bringing it up: “where perceptions are inaccurate, you can look for ways to educate. If emotions run high, you can find ways for each person to let off steam. Where misunderstanding exists you can work to improve communication.” People problems typically fall into one of three categories:

  • Perception – “Understanding the other side’s thinking is not simply a useful activity that will help you solve your problem. Their thinking is the problem” You have to realize that objective reality lies in their heads. Facts, even if established may not do anything to solve your problem. So what can you do??
    • Put yourself in their shoes- how you see the world depends on where you sit. This is one of the most important skills a negotiator can possess.
    • Don’t deduce their intentions from your fears – do not assume what you fear is the same thing that the other side intends to do.
    • Don’t blame them for your problem – it is usually counterproductive, cause them to become defensive, they will stop listening
    • Discuss each other’s perceptions – “communicating loudly and convincingly things you are willing to say that they would like to hear can be one of the best investments a negotiator can make. Remember, you first need to put yourself in their shoes to understand their perceptions
    • Look for opportunities to act inconsistently with their perceptions – the idea is to break their assumptions of you. See page 27 for example.
    • Give them a stake in the outcome by making sure they participate in the process – Give them the ownership. “if you want the other side to accept a disagreeable conclusion, it is crucial that you involve them in the process of reaching that conclusion”
    • Face saving: make your proposals consistent with their values
  • Emotion  – Emotions on one side will generate emotions on the other. In negotiations, the stakes are high and feelings are threatened
    • First recognize and understand emotions, theirs and yours – Write down what you feel, do the same for them. Ask yourself why you are having these emotions.
    • Make emotions explicit and acknowledge them as legitimate – Talk to the other side about their emotions. “It does not hurt to say ‘You know, the people on our side feel we have been mistreated and are very upset…. Do the people on your side feel the same way?'”. This shows some vulnerability which opens up the discussion.
    • Allow the other side to let off some steam – People obtain psychological release through the simple process of recounting their grievances
    • Don’t react to emotional outbursts – One example had a group that implemented a rule that only one person could get angry at a time. If you break the rule, that implies that you have lost self control and you lose face.
    • Use symbolic gestures – on many occasions a genuine apology can defuse emotions effectively
  • Communication – Without communication there is no negotiation. There are a couple of issues that can come up in a negotiation
    • Negotiators are speaking to impress third parties or their own constituency. They try to talk the spectators into taking sides.
    • People not listening to each other – they are too busy trying to think of what you wills ay next that you forget to listen to what the other side is saying now.
    • Miscommunication, or being misinterpreted.
      • Communication issues can be solved by:
        • Listen actively and acknowledge what is being said – don’t be afraid to say something like ‘did I understand correctly that you are saying that…’ Remember that understanding is not agreeing. You can understand the other side, but still disagree with what they are understanding
        • Speak to be understood – a negotiation is not a debate or a trial.
        • Speak about yourself, not about them – It is more persuasive to describe a problem in terms of its impact on you than in terms of what they did or why: “I feel let down” instead of “you broke your word”. A statement about how you feel is hard to challenge.
        • Prevention works best – The best time to handle people problems is before they become people problems
        • Build a working relationship – The more quickly you can turn a stranger into someone you know, the easier a negotiation is going to become.
        • Face the problem, not the people – It is more effective for parties to think of themselves as partners in a hardheaded, side-by-side search for a fair agreement advantageous to each.
      • The summary of the communication issues is to deal with people as human beings and with the problem on its merits.

Focus on Interests, Not Positions

  • Look for the difference between positions and interests- you want to focus on the latter. Interests are what motivate people. There are several good examples on pages 40-41. The most basic illustration is that two people are arguing over an orange, both believe they are entitled to it and neither wants to budge. This illustrates their position: the desire for the orange. What they do not know unless they can uncover it is that one of them wants the orange to make orange juice, the other wants the peel for a sauce they are making. This is their interests:  you want to reconcile the interests. “Behind opposed positions lie shared and compatible interests, as well as conflicting ones.” The authors use a landlord-tenant relationship to show the shared, indifferent,  and conflicting interests:
    • Shared interests
      • Stability
      • Well maintained apartment
      • Good relationship with one another
    • Not conflicting but differing interests
      • Tenant may not want to deal with fresh paint, the landlord does not want to pay the cost of repainting the other apartments
      • Landlord wants security of a down payment today, the tenant is fine with that as they are willing to pay.
    • Conflicting interests
      • Price for the apartment is all that remains to be settled. It is best to look at the market for rental properties to help define this.
  • The problem with interests?
    • Interests tend to be unexpressed, intangible, and even inconsistent
    • You need to understand theirs as well as yours… how do you do this??
      • Ask “Why?” – not only for justification of their position, but to understand the needs, hopes, fears, and desires that it serves.
      • Ask “why not?” – Think about their choice
      • Realize each side has multiple interests
      • Write down interests, make a list of all of the ones that may be on either side.
  • Interests cont’d
    • The most powerful interests are basic human needs
      • social economic well-being
      • sense of belonging
      • recognition
      • control over one’s life
  • Communicating interests
    • Talking about interests- you want the other side to know what your interests are.
      • Make your interests come alive, be specific. Having concrete details not only make a description credible, they add impact.
        • As long as you do not imply the other side’s interests are unimportant or illegitimate, your an afford to take a strong stance.
        • If you want the other side to take your interests seriously and appreciate yours, make sure you begin by demonstrating that you appreciate theirs
    • When you talk about the problem, put the problem before the interests
      • instead of “we believe you should…” give your interests and reasoning first and your conclusions or proposals later. Otherwise the other side will not be listening to your reasons and be trying to come back with a defensive.
    • Look forward, not back
      • Talk about where you want to go rather than where you have come from – page 53
    • Be concrete, but flexible
      • Convert your interests into concrete options
      • Treat the options you create as “illustrative specificity” that takes care of the interests. Baseball contract example on page 53-54
    • Be hard on the problem, soft on the people.
      • It might not be wise to commit yourself to your position, but it is wise to commit yourself to your interests.
      • They should know you are attacking the problem, not them**
      • Use the power of cognitive dissonance – page 55
        • People dislike inconsistency and will act to eliminate it. For example, “if you attack a problem, such as speeding trucks on a neighborhood street, and at the same time give the company representative support, you can create cognitive dissonance for him. To overcome this dissonance, he will be tempted to dissociate himself from the problem in order to join you in doing something about it.
      • Successful negotiation requires being both firm and open

Invent options for mutual gain

  • Figure out how to expand the pie before deciding it up
  • There are 4 obstacles that inhibit the inventing of options
    • Premature judgement
      • Judgement hinders imagination
    • searching for the single answer
      • for most people, inventing is not part of negotiating. People see their job of narrowing the gap between positions, not broadening the options available
    • assuming a fixed pie
      • People assume it is ‘either-or’ “either i get it or you do”
    • thinking that “solving their problem is their problem”
      • People think that ‘we have enough problems of our own, they can look after theirs
  • Prescription is a 4-step process
    • Separate the inventing from deciding
      • Use a brainstorming session to create as many ideas as possible.
      • Brainstorming keys for success on page 61
      • Brainstorm on your side and consider brainstorming with the other side as well.
    • Broaden the options on the table rather than look for a single answer
      • use the brainstormed ideas to think about the problems and generate constructive solutions
      • The circle chart – page 68
        • Think about a particular problem
        • thinking about a descriptive analysis
        • consider what ought, perhaps, to be done
        • Come up with some specific and feasible suggestions for action
      • Look through the eyes of different experts
      • Invent agreements of different strengths in case the sought after agreement is out of reach.
    • search for mutual gains
      • Identify the shared interests (see the last chapter)
        • Always ask “do we have a shared interest in preserving our relationship?”
      • Dovetail differing interests – when each side wants different things (orange peel example)
      • There is a whole list of things that one party might be more interested in than the other on page 74
      • “Look for items that are low cost to you and high benefit to them, and vice versa”
    • Invent ways to make their decision easy
      • Your task is to give them an answer, not a problem. to give them an easy decision vs. a tough one.
      • Evaluate an option from the other side’s point of view – how might they be criticized if they adopt it? This will help you think from their shoes, what restraints the other side is working with.
      • Understand the other side’s constituents “why are they saying these things”
      • Test an option by writing it in a ‘yes-able proposition’ where they can finish the negotiation with the single word ‘yes’

Insist on using objective criteria

  • You want to use a benchmark- the more objective the better. If you are negotiating on the basis of will you will run into major differences of interest. The goal is to negotiate on some basis that is independent of the will of either side.
  • You want to be open to reason, but closed to threats. The goal is to reach a solution on principle, not pressure.
  • Principled negotiation produces wise agreements amicably and efficiently.
    • Refer to a precedent and community practice
    • It protects a relationship
    • This method is much more efficient
    • You want to appear and feel ‘reasonable’
  • How to develop objective criteria, and how to use them in negotiation
    • Use ‘fair’ standards
      • market value
      • precedent
      • scientific judgement
      • professional standards
      • etc.. rest of list is on page 85
    • Fair procedures
      • The age-old way to divide a piece of cake between two children: one cuts, the other chooses. Neither can complain about unfair division. There are a few variations of this – see page 86-87
    • Negotiating with objective criteria
      • Frame each issue as a joint search for obj. criteria
      • Reason and be open to reason on what standard is most appropriate
      • Never yield to pressure, only to principle
    • “Look, you want a high price and I want a low one. Lets figure out what a fair price would be”
      • ask ‘what is your theory’
    • Insisting an agreement is based on objective criteria doesn’t mean that it be based solely on the criteria you advance
      • Be open to reasonable persuasion on the merits
    • Never yield to pressure, it can take many forms:
      • bribe, threat, manipulative appears to trust, or simple refusal to budge
      • Never yield to pressure, only to principle
    • There is a really good anecdote on how to handle this on page 92-94. How to use objective criteria in a negotiation

What if they are more powerful? Develop your BATNA

  • BATNA – Best Alternative To a Negotiated Agreement. This is your power in a negotiation – especially negotiating with a more powerful opponent.
  • In response to power, the most any method of negotiation can do is to meet two objectives
    • To protect you against making an agreement you should reject
    • To help you make the most of the assets you do have so any agreement you reach will satisfy your interests when possible
  • Protecting yourself
    • Do not use a bottom line – definitive number
      • it locks you and limits your ability to benefit from what you learn during a negotiation
        • By definition, a ‘bottom line’ is a position that is not to be changed
        • it inhibits imagination
        • It is almost certain to be too rigid
    • Know your BATNA
      • BATNA is basically what you will do if you are unable to come to an agreement
        • This is the standard against which you should measure any proposed agreement.
      • Insecurity of an unknown BATNA
        • Most circumstances, you are too committed to reaching an agreement. If you have not determined your BATNA, you are too pessimistic about what would happen if negotiations broke off
    • Formulate a trip wire
      • “don’t sell the house for under $160k until you have talked to me”
  • Making the most of your assets
    • The greater your BATNA, the greater your power
    • How to develop a BATNA: Page 103-104
      • Invent a list of actions you can take if no agreement is made
      • Improve some of the more promising ideas and convert them into practical alternatives
      • Select the one alternative that seems the best
    • Consider the other side’s BATNA- the more you know about their alternatives, the better prepared you are for negotiation
    • As a side note- it seems like preparation is the theme of this entire book. To be a good negotiator, you need to really know your stuff and their stuff too.
    • Negotiating with a more powerful opponent
      • A BATNA helps you negotiate on the merits

How to use Negotiation Jujitsu

  • 3 basic approaches to getting their attention on the merits:
    • what you can do – focus on the merits. It can be contagious
    • Focus on what they may do – ‘negotiation jujitsu’
    • Focus on what a 3rd party can do
  • Negotiation jujitsu
    • How do you prevent the cycle of reaction?
      • Don’t push back- refuse to react
      • Deflect attacks against the problem
      • “rather than resist their force, channel it into exploring interests, inventing options for mutual gain, and searching for independent standards.”
    • Attacks- Their ‘attack’ will consist of 3 maneuvers:
      • Asserting their position forcefully
      • Attacking your ideas
      • Attacking you
    • One way to counter is to unsimplify the other side’s requests if they seem unreasonable – example on page 110. If they present an unrealistic option, show them how it really isn’t an option in from your viewpoint.
    • Don’t defend you ideas, invite criticism and advice
      • Ask them what is wrong with it
    • Recast an attack on you as an attack on the problem
    • Ask questions and PAUSE
      • Ask questions instead of statements. They generate answers where statements generate resistance
      • Silence is one of your best weapons – use it. If they make an unreasonable proposal you might be best off not saying a word.
        • Don’t take them off the hook by going on to another question or comment of your own. some of the best negotiating is done when you are not talking.
    • Use the “one text procedure” where there are different interests, make one change at a time until both sides can start to agree.
      • Prepare a draft and ask for criticism – there is no commitment here necessary.
    • There is a successful role play of a negotiation on page 117-128 that uses a principled approach to get to the desired result.

Taming the Hard Bargainer

  • Most people will give in once and hope the other side is appeased and not ask for more. This often fails and they will continue to take you to the cleaners.
    • You need to focus on ‘principled negotiation’
  • If you catch them using a tactic, bring it up. Discussing the tactic makes it less effective and makes them worry about alienating you completely. Example: good guy/bad guy routine.
  • Utilize all of the principles in this book to keep the hard bargainer on track.
  • Tricky tactics fall into 3 categories:
    • deliberate deception (page 132-133)
      • Phony facts
      • Ambiguous authority
      • Dubious intentions
      • Less than full disclosure is not the same as deception
    • Psychological warfare
      • Stressful situations
      • Personal attacks
      • Good guy/bad guy routine
      • Threats – good negotiators rarely resort to threats. Warnings are much more legitimate than threats and not vulnerable to counter threats
    • Positional pressure tactics – 139-142
      • Refusal to negotiate
      • Escalating demands- never yield to pressure, only to reason
      • Hardhearted partner – the other side is not the one that makes the decision. “it is reasonable to me, but my wife absolutely refuses…”  -Request to speak with the partner
      • A calculated delay
      • “take it or leave it”
    • Don’t be a victim
      • Ask yourself if you would be embarrassed if there was a full writeup in the newspaper on how you negotiated.

Conclusion- a lot of this book seems like common sense. But it is easy to fall back into the positional bargaining that most people think of when they hear the word negotiate (haggling). This can be used as a guide for how to get through the tough negotiations while maintaining a solid relationship. I hope this was a helpful summary. I will be reading “getting past no” next!

RG

 

 

 

 

Good to Great – Book Summary

Good to Great by Jim Collins is another business classic. It is a book that I read about 4 years ago as a ‘required reading’ for when I started my current job. I read it at the time, but going back through it the second time knowing what I know today was definitely worthwhile. Over the years I have become a much more active reader, making notes, adding bookmarks, underlining things I want to quote, etc. So the second time through was worth the time I had considered skipping it in my curriculum.

Anyways, on to the book. The premise of the book is that Good is the enemy of Great, this is the first sentence of the book. This book is looking at what it takes to become a great organization, whether that is a business, nonprofit, or high school sports team. What are the key ingredients that make an organization make the leap from mediocrity to greatness. “We believe almost any organization can substantially improve its stature and performance, perhaps even become great, if it conscientiously apply the framework of ideas we’ve uncovered”. To understand how to get from good to great they were looking for catalysts. The author and his team had certain preconceived assumptions about what they ‘thought’ they would find that may come as a surprise. The things they did not find were:

  • Larger than life, celebrity leaders from outside the company
  • Links between success and executive compensation
  • Good to great companies focused equally on what to do as much as what not to do and what to stop doing (80/20 TF rule)
  • Technology was not a driver. It accelerated, but never caused the transformation.
  • M&A did not have a large role
  • Didn’t focus on motivating people or creating alignment
  • No big tag line, or launch event to signify transformations, they happened evolutionary.
  • Good to great companies were not (for the most part) in great industries.
  • Greatness it turns out is a conscious choice

There is a diagram the book uses to drive the concepts home (see below) the summary is that there are three broad stages: disciplined people, disciplined thought, and disciplined action. Each of these are then broken into two concepts. All of this is going on and building up until the breakthrough. Then they utilize the momentum from all of the concepts to continue driving the right things and keep the ‘flywheel’ spinning.

Good To great diagram.gif

Disciplined People:

  • Level 5 Leadership– Leaders in good to great companies had more in common with Lincoln and Socrates than Patton or Caesar.
  • level-5-leadership
    • Character traits of level 5 leaders:
      • Humility
      • Modesty
      • Unwavering resolve
      • Willpower
      • Un-curable need to produce results
    • They talk in terms of the success of the company
    • Most often, the level 5 leaders were brought up from within the company
    • Showed up in big decisions AS WELL as workmanlike diligence.
    • Often say they were lucky about their successes, but never blamed bad luck on their misfortunes
    • Further explanation and comparison between professional will and personal humility on page 36.
    • Many of them had significant life experiences that sparked or fathered their maturation: WWI experience, strong religious beliefs, near-death experiences, etc.
    • They are results-driven, take full responsibility, set up their successors for even greater success.
  • First Who, Then What – “Get the right people on the bus, wrong people off the bus, and the right people in the right seats- and then they figure out where to drive it”
    • The key point is that the ‘who’ decision comes before the ‘what’ decisions – before vision, strategy, org. structure, tactics, etc.
    • Leaders were rigorous, not ruthless in people decisions
    • How to be rigorous in people decisions:
      • When in doubt, do not hire (keep looking) – this is similar to the TF podcast that said ‘if it is not a HELL YES! it’s a no.’
      • When you know you need to make a people change, act
      • Put your best people on  your biggest opportunities
    • Compensation is not to motivate, it should be used to get and keep the right people in the first place
    • The right person has more to do with character traits and innate capabilities than it does with specific knowledge, skills’ tc.

Disciplined Thought:

  • Confront the Brutal Facts – Stockdale Paradox: you must maintain unwavering faith in that you can and will prevail in the end, regardless of the difficulties. while at the same time confront the brutal facts of reality. A very stoic philosophy.
    • You need to confront the basic facts of the current reality, when you do this the ‘right’ decisions become self-evident. But you need to first confront the brutal facts.
    • Create a culture where people have an opportunity to be heard and for the truth to be heard. You can create this culture by:
      • leading w/ questions, not answers
      • Engage in dialogue + debate (5 dysfunctions) but not coercion
      • Conduct autopsies of issues, without blame
      • Build red flag mechanisms that turn information into info that cannot be ignored.
    • Good to great companies had just as much adversity, but responded differently. “They hit the realities of their situations head-on”
    • Do not try to motivate people. Try not to de-motivate them. one primary way to de-motivate people is to ignore the brutal facts of reality.
  • The Hedgehog Concept (simplicity within the three circles) – If you cannot be the best in the world at your core business, then your core business absolutely cannot form the basis of a great company. Look for the center of the three circles (sweet spot) where passion, economic viability, and ability to become the best in the world.
    • This is a gem of the book. What we call the sweet spot at the company I work for. It is the intersection of your passions, skills, and what can be an economic engine. The “hedgehog concept” takes it one step further saying that you should ignore the things that do not fit into the intersection of these circles. It is not aligned with your purpose.
    • You need to understand what you can be world class at, and just as importantly you need to be completely honest and put the ego aside to say what you cannot be world class at. It is not a goal, strategy, or intention, it is an understanding
    • “best in the world” is not the same thing as a core competence.
    • “To get insight into the drivers of your economic engine, search for the one denominator (profit per x or, in the social sector, cash flow per x) that has the greater single impact.” VA/person, VA/hour, etc….
    • The council (page 114) can be useful to reiterate the hedgehog concept. it is an iterative process that took the good to great companies in the study an average of 4 years to get down.what-is-your-hedgehog-concept-jim-collins-zest-ebiz

Disciplined Action:

  • Culture of Discipline – When you combine a culture of discipline with an ethic of entrepreneurship, you get the magical alchemy of great performance.
    • Sustained great results depend on a culture full of self disciplined people who take action, fanatically consistent with the three circles
    • Bureaucracy comes from having the wrong people on the bus
    • “A culture of discipline is not just about action. It is about getting disciplined people who engage in disciplined thought and who then take disciplined action”
    • Do not confuse a culture of discipline with a tyrant who disciplines.
    • You need to have the willingness to shun opportunities that fall outside the three circles.  A “once in a lifetime” opportunity is irrelevant if it is outside the hedgehog concept. a great company will have many  “once in a lifetime opportunities”
    • “stop doing” lists are more important than “to do” lists
  • Technology Accelerators  – Good to great companies use technology differently than others. They are typically the pioneers in the application of carefully selected technologies. The technology in itself is never the primary root cause of greatness OR decline.
    • Avoid the tech fads and bandwagons, yet they become the pioneers in the application of carefully selected technologies- pick and choose the ones that are aligned with their hedgehog and can be used as an accelerator of momentum
    • How a company reacts to technological change is a good indicator of its inner drive for greatness versus mediocrity.
    • Most of the good to great execs. didn’t even mention technology as a major factor in the interviews.

Flywheel Concept and Doom Loop – No single defining action, program, innovation or lucky break can be attributed to going from good to great. It takes relentless pushing on the heavy flywheel to build the momentum through a point of breakthrough.

  • This is basically a Plan Do Check Act (PDCA) of the entire good to great practice this book outlines.
  • Sustainable transformations follow a predictable pattern of buildup and breakthrough likened in the book to pushing a giant flywheel until it gains enough momentum to break through.
  • Good to great companies only really used large acquisitions AFTER breakthrough, in order to accelerate the already fast spinning flywheel.
  • “The good to great leaders spent essentially no energy trying to ‘create alignment’, ‘motivate the troops’ or ‘manage change.’ Under the right conditions, the problems of commitment, alignment and change largely take care of themselves. Alignment principally follows from results and momentum, not the other way around”

Good to Great -> Built to Last

  • Since Jim Collins also was the author of “built to last” the last chapter is about how to make the transition from a “good to great” company to one that will last many generations. The basic idea is that you want to preserve the basic Core values and purpose of the organization while being open to changing cultural and operating practices as well as specific goals and strategies. In summary: keep the underlying foundational principles the company was built on, but allow change to occur in everything else. There is an interesting graphic about how Disney did this on page 197.
  • The four key ideas of Built to Last are as follows:
    • Clock building, not time telling: Build an organization that can endure and adapt through generations of leaders and multiple product life cycles. vs. one leader and one idea
    • The Genius of “AND” – Get rid of the mentality that it is an EITHER OR decision. Figure out how you can have AND: “Purpose AND profit, continuity AND change, freedom AND responsibility, etc.”
    • Core ideology – Instill the core values and purpose as principles to guide the decisions for long term.
    • Preserve the core/Stimulate Progress-  Preserve the core ideology as an anchor WHILE stimulating change, improvement, innovation, and renewal in everything else. Keep the ideology at the forefront!
  • BHAG’s (Big Hairy Audacious Goals)
    • Good BHAGs are set with understanding. There should be a connection between BHAGs and the three circles of the Hedgehog Concept. This is where the magic happens

Collins ends the book with a thoughtful statement: “For, in the end, it is impossible to have a great life unless it is a meaningful life. And it is very difficult to have a meaningful life without meaningful work. Perhaps, then, you might gain that rare tranquility that comes from knowing that you’ve had a hand in creating something of intrinsic excellence that makes a contribution. Indeed, you might even gain that deepest of all satisfactions: knowing that your short time here on this earth has been well spent, and that it mattered.” 

RG

 

The 7 Habits of Highly Effective People- Book Summary/Review

The 7 Habits of Highly Effective People – Stephen R. Covey

The 7 Habits is one of the great personal development books of our time. It is pretty much recommended reading wherever you look and for good reason. It is based on some solid principles that are timeless and is focused on a holistic approach to getting more out of life. I went into the book thinking it would be more about how to be effective professionally, but realized pretty quickly that it is more about being effective as a human being. The framework of the book is set up in the first chapter called ‘inside-out’ where he  discusses the Pygmalion effect- where perceptions become reality and you find that there are often self-fulfilling prophecies. What this teaches us is that we must look at the lens itself, through which we see the world as well as the world we see. The focus on the sense shapes how we interpret and respond to situations. Paradigms are another focus of this chapter- a paradigm is the way we ‘see’ the world in terms of perceiving, understanding, or interpereting. He gives an example using a map as an analogy. If you were trying to find your way, but the map you have has errors on it or if it was a map of a different city than the one you are in, you would not be able to find your way. ‘character ethic’ solutions would not help you such as working on your behavior or attitude about the situation. you just plain have the wrong map. Page 32 has an exercise that shows this. the exercise is to show two pictures to different groups with very minor differences in them. The first is obviously a young woman and the other is of an old woman. Then a third picture is shown that blends the two together a bit, two both groups and they will often argue their points strongly. Because each side has a different paradigm to start from, they are not seeing the other person’s perspective. The point is that neither is right or wrong, but rather that their experiences has persuaded them that they must be correct. If you are looking at the book, the pages are on 33/34/53. “where we stand depends on where we sit”.  Paradigm shifts-  the term paradigm shift has been used to describe the phenomenon that in almost every significant breakthrough in the field of scientific endeavor is first a break with tradition, with old paradigms. Cecil B. Demille observed “it is impossible for us to break the law. We can only break ourselves against the law.” On learning: ‘if you don’t let a teacher know at what level you are- by asking a question, or revealing your ignorance- you will not learn or grow. WE must learn to listen, and this requires emotional strength- highly developed qualities of character. There are times to teach and times not to teach. When the relationship is strained and air charged with emotion, an attempt to teach is often perceived as a form of judgement and rejection.

  • The way we see the problem is the problem.

An overview of the 7 habits

  • For this book, we define ‘habits’ as the intersection of knowledge, skill and desire
  • The book is supposed to be progressive to get you away from dependence, to independence, and finally into independence. This is the maturity continuum.
    • Dependence- the paradigm of you – you take care of me, you come through for me, etc.
    • Independence- the paradigm of I, I can do it, I am responsible, I am self-reliant, etc.
    • Interdependence- The paradigm of we– we can do it, we can cooperate, etc. Interdependent people combine their own efforts with the efforts of others to achieve their great success.
  • Covey says that effectiveness lies in a balance- what he calls the P/PC Balance. With P/PC you want to make sure you are not sacrificing the PC to get a short term P. In the book he compares this to killing the goose that lays the golden eggs.
    • P  stands for production of desired results
    • PC stands for production capacity – the ability or asset that produces P. There are basically 3 types of assets:
      • Physical – An example is a power lawnmower- the “p” would be that it is mowing your lawn. However if yo neglect the PC and do not do the maintenance on it, you will find that will lose its power capacity and essentially fail to provide your P.
      • Financial – example is our capacity to earn. if we do not continually invest in improving our own PC, we limit our options and can be locked in our present situation.
      • Human- One example is a marriage. An issue would be if the couple are more concerned about getting the ‘golden eggs’ or benefits, than they are about preserving what makes them possible, they become sensitive and inconsiderate, neglecting the things important for a deep relationship.
    • Suggestion for better learning of the principles in this book: share, discuss and teach what you learn within 48 hours of when you read it. It will help you internalize it.
  • Private Victory- the first three habits are the habits of Private Victory. To get you from dependence to independence. They are mean to increase your self confidence and get you to know yourself in a deeper, more meaningful way. You will be able to define yourself from within
  • Public Victory- habits 4-6. You will discover and unleash both the desire and resources to heal and rebuild important relationships that have deteriorated or even broken.
  • The 7th habit – if deeply internalized will renew the first six and make you truly independent and capable of effective interdependence.

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Private Victory

  • Habit 1: Be Proactive
    • Based on the premise that we are self-aware beings. You are able to look as an observer to your own involvement in something. The story of Victor Frankl- who was a Holocaust survivor that was able to realize his basic identity that they could not take away: “He could decide within himself how all of this was going to affect him” – It was his freedom to choose his response.
    • “Between stimulus and response, man has the freedom to choose.”
    • In addition to self-awareness, we have imagination. Or the ability to create in our minds. We have a conscience, or a deeper awareness of right and wrong. Finally we have independent will – the ability to act based on our self-awareness, free of all other influences
    • Proactivity is that we have responsibility for our lives. Our behavior is a function of our decisions, not our conditions. We have responsibility – “response-ability” – the ability to choose your response. Highly proactive people do not blame circumstances, conditions, or conditioning for their behavior. Their behavior is a product of their own conscious choice, based on values.
    • There are 3 central values in life:
      • Experiential- what happens to us
      • Creative – that which we bring into existence
      • Attitudinal- our response to difficult circumstances. Frankl considers this the highest of central values.
    • Initiative- means recognizing our responsibility to make things happen.
      • “Use your R&I” resourcefulness and initiative. This is what Covey says that you should say when people are not living up to their abilities.
      • Holding people to the responsible course is not demeaning- it is affirming
      • Take initiative and ACT!

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    • Circles of influence
      • Proactive people focus their efforts on the circle of Influence: They work on the things that they can do something about. The nature of their energy is positive, enlarging, and magnifying, causing their circle of influence to increase. This would be considered a positive feedback loop where your influence spirals larger as you concern yourself only with the things you can control.
      • Negative energy causes the circle of influence to shrink. This happens by blaming and accusing attitudes, reactive language, feelings of victimization, etc.

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    • Problems will fall under 3 categories:
      • Direct control- involves our own behavior
      • Indirect control – problems involving other people’s behavior
      • No Control – problems we can do nothing about (past or situational realities)
    • Proactive story- pages 94-95 about a proactive executive that was able to grow his circle of influence by focusing on what he had control over. He was able to make the president of the company’s weaknesses irrelevant, which was noticed. and eventually the president brought him into the ‘inner circle’
    • Proactive doesn’t mean to be pushy or aggressive. It is simply to be smart, value driven an knowing what is needed.
    • The “have’s” and “be’s” on page 96 – is a good way to figure out if you are focusing within or outside of your circle of influence.
    • The proactive approach to a mistake is to acknowledge it instantly, correct, and learn from it.
      • NOT to acknowledge a mistake, not to correct it and learn from it, is a mistake of a different order. It puts a person on a self- deceiving and self-justifying path.
    • Making commitments and promises is in the very heart of the circle of influence. This is an area we can work on immediately: we can make a promise and keep it.  Or we can Set a goal- and work to achieve it. 
    • 30 day proactivity test and Application suggestions on pages 100-101
  • Habit 2: Begin with the End In Mind
    • Exercise to think of yourself at your own funeral- what would you want people to say?
      • Personal answer/themes: Genuine person/Innovator/helped thousands of people/visionary/friend
    • Use the above exercise to help define success for yourself. Think about the motives and why these things are important to you. Then put it into action.
    • All things are created twice: In mind and in physical creation
      • Whether we realize it or not, we are either the second creation of our own proactive design, or we are the second creation of other people’s agendas, of circumstances, or of past habits.
    • Leadership vs. management
      • “Management is doing things right; leadership is doing the right things. Management is efficiency in climbing the ladder of success; leadership determines whether the ladder is leaning against the right wall”
    • In Habit 2 we have the ability to ditch the scripts we were raised with and have the responsibility to “create new ones that are more effective, more congruent with our deepest values, and with the correct principles that give our values meaning”
    • Develop your own Personal Mission Statement- pages 113-115
    • Logotherapy- helping an individual find his unique meaning, mission, true purpose in life.
    • Whatever is in the center of your life will be the source of your security, guidance, wisdom, and power
      • Security – Sense of worth, identity, emotional anchorage, self esteem , basic personal strength
      • Guidance – Your source of direction in life
      • Wisdom – “Your perspective on life, your sense of balance, understanding of how various parts and principles apply and relate to each other. It embraces judgement, discernment, comprehension. it is the gestalt or oneness, an integrated wholeness”
      • Power- your faculty or capacity to act, the strength and potency to accomplish something
    • Alternative Centers – or core paradigms of people
      • Spouse centeredness- strong emotional dependence of a spouse. You tend to revert back to the scripts you had growing up.
      • Family centeredness – get their sense of security from the family tradition and culture or the family reputation
      • Money centeredness – This focus will bring about its own undoing. You will become too vulnerable to things that may impact your net worth.
      • Work Centeredness – Their fundamental identity comes from work
      • possession centeredness – tangible material possessions as well as intangible possessions such as fame, glory or social prominence
      • Pleasure centeredness- centered around fun and pleasure. Often become too quickly bored with each succeeding level of ‘fun’.
      • Friend/enemy centeredness – identify themselves by their friends or even their enemies. An example of enemy centeredness is when an enemy has so much control over your happiness and you will take no responsibility for the issue.
      • Church-centeredness – image or appearance can become a dominant consideration. These people will label others ‘active’ ‘inactive’ ‘liberal’ etc.
      • Self-centeredness – perhaps the most common today. very little security, guidance, wisdom, or power in the limited center of the self.
      • There is a summary of all the centers and the impacts on guidance, security, wisdom and power.
    • A Principle Center
      • Centering yourself on correct principles. You will be able to create a solid foundation for the development of the four life-support factors.
        • Security comes from knowing that correct principles do not change. We can depend on them.
        • Wisdom and Guidance – come from correct maps, from the way things really are, have been and will be.
        • Personal power is of a self-aware, knowledgeable, proactive individual, unrestricted by the attitudes, behaviors, and actions of others or environmental influences.
        • Summary of principle centers for the 4 life support factors on page 132.
    • Personal mission statement- page 136-137
      • We ‘detect’ vs invent our missions in life
      • If Habit 1 tells you ‘you are the programmer’, habit 2 tells you ‘now write the program.’
        • “Writing or reviewing a mission statement changes you because it forces you to think through your priorities deeply, carefully an to align your behavior with your beliefs
      • Habit 2 primarily uses the right side of the brain- of Imagination and conscience.
        • “I can use my right brain power of visualization to write an ‘affirmation’ that will help me become more congruent with my deeper values in daily life”
          • A good affirmation has five basic ingredients: it’s personal, positive, present tense, visual, and emotional. example on page 141. The more vividly you can imagine it, the more deeply it will be experienced.
        • “All peak performers are visualizers: they see it, they feel it, they experience it before they actually do it. they begin with the end in mind”
        • Affirmation and visualization are forms of programming. Be careful not to submit ourselves to programming that is not in harmony with our basic centers.
        • make sure you do not get completely absorbed by one role and neglect the other important ones.
      • Mission statements should be written for families: page 146, and organizations: page 147.
        • Organizational mission statements must be written by everyone. “no involvement, no commitment.”
    • Pages 152-153 have the application exercises.
  • Habit 3: Put First Things First
    • “You are the creator, you are in charge.”
    • You can live out habit 3 by practicing effective self-management.
    • Left-brain:management; right-brain: leadership. “manage from the left; lead from the right.”
    • All successful people have one thing in common: they put First Things First. Leadership decides what the first things are. Management puts them first, day by day, moment by moment. Carrying it out.
    • The Four Generations of Time management
      • Notes and checklists
      • Calendars and Appointment books
      • Prioritization, clarifying values and relative worth of activities based on those values. (this is mostly where we are today)
      • The Fourth Generation is that we do not manage our time, rather we manage ourselves. Instead of focusing on ‘things and time’ we focus on preserving and enhancing relationships and on accomplishing results. (P/PC balance)
    • The two factors that define an activity are ‘urgent and important’ There is a time management matrix in the book that shows you do not even want to do quadrants III and IV. Quadrant II is where we want to focus: it is the box that takes initiative and proactivity to get after. It is the quadrant where progress is made.

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    • The enemy of “Best” is often “good”
      • Decide what your highest priorities are and have the courage to pleasantly, smilingly, non-apologetically say “no” to other things
      • Our personal mission empowers us with the wisdom to make these decisions effectively.
    • The 6 important criteria of a Quadrant II organizer:
      • Coherence – harmony integrated between your vision and mission, roles and goals, priorities and plans, and desires and discipline. Also a place for your short and long term goals.
      • Balance Keep your various roles right in front of you so you do not neglect certain areas
      • QII focus- tool that encourages and motivates to spend time in Quadrant II. He suggests organizing your life on a weekly basis so you can prioritize the things without getting sucked into the whirlwind of the day to day.
      • A ‘people’ dimension – a tool that deals with people, not schedules. you need to think in terms of effectiveness when dealing with ‘people’
      • Flexibility – your tools should be your servant, never your master
      • Portability- you should be able to carry it with you most of the time.
    • 4 Keys to becoming a QII self-manager. There is an example of their version on pages 174-175
      • Identifying roles – write down your key roles. Examples on page 171
      • Selecting goals – One or two important results you should accomplish in each role during the next seven  days.
      • Scheduling – should be able to see the week ahead. get your goals in there. Leave room fro spontaneous experiences.
      • Daily adapting – Review your schedule every morning to put you in touch with the value based decisions you made when you organized the week.
    • Advances on the ‘fourth generation’ of time management skills. It is…
      • Principle centered
      • Conscience-directed
      • Defines your unique mission, including values and long term goals
      • Helps you balance your life by identifying roles
      • Gives greater context through weekly organizing.
    • Delegation means growth. If done properly with growth in mind. You want to use what Covey calls ‘stewardship delegation. Which is focused on “what” not “how”
      • Focus on results vs. methods. Make a clear, up front mutual understanding of expectations in five areas:
        • Desired results
        • Guidelines
        • Resources
        • Accountability
        • Consequences
        • **remember that trust is the highest form of human motivation. It brings out the best in people. it does take time and patience.  For more on how to use this”stewardship delegation” look through pages 182-186.
    • Application suggestions on page 188-189

Public Victory

  • The Paradigms of Interdependence
    • The emotional bank account- the feeling of safeness you have with another human being
    • You can make deposits through courtesy, kindness, honesty, and keeping commitments. You can build up a reserve. When the trust account is high, communication is easy, instant, and effective
    • If you have a habit of showing discourtesy, disrespect, cutting people off, overreacting, ignoring, becoming arbitrary, betraying trust, etc. you can overdraw an emotional bank account and the trust will be low. Characterized by having to walk on eggshells and having to think about everything you say, etc. Many families and marriages are filled with it.
    • 6 Major deposits
      • Understanding the other person- “one person’s mission is another person’s minutiae”. Our tendency is to project out of our own autobiographies what we think other people need or want.
      • Attending the little things- “in relationships, the little things are the big things”
      • Keeping commitments- People tend to build their hopes around promises, particularly promises about their basic livelihood.
      • Clarifying expectations- all about communication
      • Showing personal integrity: keeping promises, fulfilling expectations. Be loyal to those not present. In doing so, you build the trust of those who are are present.
      • Apologizing sincerely when you make a withdrawal: Great deposits come in sincere words… “i was wrong” “that was unkind of me” “I gave you no dignity, and I’m deeply sorry” etc. It takes a great deal of character to apologize quickly and out of one’s heart rather than out of pity. Also, it must be perceived as sincere.
    • P Problems are PC opportunities- a chance to build the emotional bank accounts that significantly affect interdependent production
  • Habit 4: Think Win/Win
    • There are six paradigms of human interaction:
      • Win/Win- this is what we are aiming for. Think about it in terms of negotiation. This is based on the paradigm that there is plenty for everybody, and that one person’s success is not achieved at the expense or exclusion of the success of others. Its not your way or my way, its a better way,  a higher way. And the only real alternative in interdependent realities.
      • Win/Lose
      • Lose/Win
      • Lose/Lose
      • Win
      • Win/Win or No Deal
    • Five dimensions of Win/Win- Win/Win involves mutual learning, mutual influence, mutual benefits
      • Character
        • Integrity – you need to have a deep sense of what a Win is for you
        • Maturity- the balance between courage and consideration. The ability to express one’s own feelings and convictions balanced with considerations for the thoughts and feelings of others.
        • Abundance mentality – There is plenty out there for everybody. The abundance mentality takes the personal joy, satisfaction, and fulfillment of habits 1/, 2, and 3 and turns it outward.
      • Relationships-Focus on the issues, not the personalities or positions. If the Emotional Bank accounts are high, you will have a deep enough respect for one another. Remember No Deal is always an option, or you could also choose to go to the low-form of Win/Win – Compromise.
      • Agreements- Performance or partnership agreements shift the paradigm of productive interaction from vertical to horizontal, from positioning to being partners in success. The Five elements of a win/win agreement are:
        • Desired results- what is to be done and when
        • Guidelines – or parameters
        • Resources – Human, financial, technical etc. support available to accomplish the job
        • Accountability- standards of performance and time of evaluation
        • Consequences- Good and bad, natural and logical- what does and will happen as a result of the evaluation
        • It is much more enabling to to the human spirit to let people judge themselves than to judge them.
      • Win/Win Management training
        • learner controlled instruction – incentive for learner story on pages 235-238
      • Win/Win Performance agreements- focus on results, not methods.
        • “Following a deep and thorough discussion of expectations, guidelines, and resources to make sure they are in harmony with the organizational goals, the employee writes a letter to the manager that summarizes the discussion and indicates when the next performance plan or review discussion will take place.”  This agreement shows a ton of commitment
        • There are 4 kinds of consequences (rewards and penalties)
          • Financial- raise
          • Psychic- recognition/approval
          • Opportunity- training, development, perks, other benefits
          • Responsibility – scope and authority – either of which can be enlarged or diminished.
        • Win/Win Agreements specify consequences in one or more of those areas and the people involved know it up front. Everything is clear from the beginning.
      • Systems- Reward systems must be primarily focused on people achieving self-selected performance objectives and on groups achieving team objectives.
        • “It is often the system, not the people. If you put good people in bad systems, you get bad results. You have to water the flowers you want to grow.”
      • Processes – Four step process to achieving Win/Win Solutions
        • See the problem from the other point of view. Really seek to understand and to give expression tot he needs and concerns of the other party as well or better than they can themselves
        • Identify the key issues and concerns involved (not positions)
        • Determine what results would constitute a fully acceptable solution
        • Identify posible new options to achieve those results
    • Application suggestions on page 245-246
  • Habit 5: Seek First to Understand…  Then to be Understood
    • “Seek first to understand, then to be understood. This principle is the key to effective interpersonal communication”
    • Empathic listening- you need to build the skills of empathic listening on a  base of character that inspires openness and trust.
      • Most people do not listen with the intent of understanding. They listen with the intent to reply.
        • They prescribe their own glasses for everyone with whom they interact.
      • It is a deep, full understanding of the other person’s viewpoint, as well as an intellectual understanding.
      • Satisfied needs do not motivate- it’s only the unsatisfied need that motivates. Next to physical survival, the greatest need is psychological survival- to be understood, to be affirmed, to be validated, to be appreciated.
    • “the amateur salesman sells products; the professional sells solutions to needs and problems. The professional learns how to diagnose, how to understand.
    • 4 Autobiographical Responses
      • Evaluate- we agree or disagree
      • Probe- Ask questions from our own frame of reference
      • Advices- give counsel based on our own experience
      • Interpret – Try to figure people out, and explain their motives, behaviors, etc. based on our own motives and behavior.
    • Covey goes into a really good breakdown of this communication behavior – starting on page 257 and ending 264. It does a good job of illustrating how someone would typically respond, and how the conversation would go if you focus on understanding the underlying issue.
    • You need to be candid, and vulnerable. Also the skills in this chapter will not be effective unless they come from a sincere desire to understand.
    • Then seek to be understood
      • Greeks had a philosophy of ethos, pathos and logos. This can be applied to making effective presentations.
        • Ethos – your personal credibility. The faith people have in your integrity and competency
        • Pathos – the emphatic side. the feeling. You are in alignment with the the emotional thrust of another person’s communications.
        • Logos is the logic- the reasoning part of the presentation.
        • The sequence counts in a presentation. You want to establish credibility, understand and the person you are presenting to, THEN go forward with the logical side of your presentation. See pages 267-268 for more.
          • You can use this sequence by “Describe the alternative they are in favor of better than they can themselves. Show that you understand them in depth. Then carefully explain the logic behind your request.
    • The more deeply you understand other people, the more you will appreciate them
    • Application suggestions on page 271
  • Habit 6: Synergize
    • All the other habits prepare us for the habit of synergy
    • Two ingredients to having synergy takes place are Maturity and chemistry.
    • The more authentic you become, the more genuine in your expression. The more people can relate to your expression and the safer it makes them feel to express themselves.
    • The essential purpose behind creative work can be recaptured even if it is difficult to recreate a particular synergistic experience. It can be summed up by “we seek not to imitate the masters, rather seek what they sought.”
    • Cooperation + Trust in Communication = Synergy
    • Win/Win is looking for a higher way, better way than could be achieved with just the two opposing positions. Search for the ground that can be a win for all.
    • Valuing the differences  is critical to synergy- the mental, emotional, psychological differences between people.
    • seek first to understand, then to be understood, then seek synergy
    • Application suggestions on page 296.

Habit 7: Sharpen the Saw

  • Focused on the 4 Dimensions of renewal (interestingly enough, practicing Yoga fits all 4)
    • Physical – this means exercise that focuses on endurance, flexibility, and strength. You need to focus on exercise, nutrition and stress management.
    • Mental – Most comes through formal education, but after that most people let their minds atrophy. Try limiting TV to 7 hours per week. You should try to read broadly to expose yourself to great minds. Make a goal: book per month, every two weeks, every week. “the person who doesn’t read is no better off than the person who can’t read”. Writing is another powerful way to sharpen the mental saw. It promotes clarity, exactness and context.
    • Spiritual – a daily practice of meditation. There is a story on page 305 of a prescription on how to come back to yourselves called ‘the turn of the tide” by Arthur Gordon. It is worth a read every once in a while. The prescriptions given were “listen carefully”, “try reaching back” and “examine your motives”. If one’s motives are wrong, nothing can be right. Then the final prescription was “write your worries on the sand”
    • Social/Emotional- centered more on the principles of interpersonal leadership, empathic communication, and creative cooperation. Covey believes a life of integrity is the most fundamental source of personal worth.

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    • You should see this investment in yourself as a type of healthy addiction
    • Balance in renewal. You need to make sure none of the 4 dimensions are neglected as it will impact the rest.
    • Synergy in renewal- you will find that these dimensions have effect on each other
      • Physical health has affect on mental health
      • spiritual health affects social/emotional strength
    • “your economic security does not lie in your job; it lies in your own power to produce- to think, learn create and adapt. That’s true financial independence.
    • The upward spiral- “regular feasting on inspiring literature, thinking noble thoughts, and above all, living in harmony with its still small voice” The upward spiral of personal growth gets us to learn, commit, and do on increasingly higher levels.
    • Application suggestions on page 319

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  • Inside-Out again
    • The key to growth and happiness is the space between stimulation and response. There is a good story in the book starting on page 322 about how he spent a year in Hawaii and how he was able to deepen his relationship with his wife while applying many of the principles in this book.
    • ‘The highest and most powerful motivation in doing that is not for ourselves only, but for our posterity , for the posterity of all mankind. As once someone observed, “there are only two lasting bequests that we can give our children-one is roots, the other wings”‘
      • empower your children ‘give wings’ with the freedom to rise above negative scripting that has been passed down to us.
    • “achieving unity-oneness-with ourselves, with our loved ones, with our fiends and working associates, is the highest and best and most delicious fruit of the seven habits.
    • T.S. Eliot quote to end the book “We must not cease from exploration. And the end of all our exploring will be to arrive where we began and to know the place for the first time.”

– RG-