Steven
Key takeaways:
- Stop thinking of ‘I don't know,' as a negative, meaning, ‘I have no idea,' or ‘I am not smart enough.' Start thinking of it as, ‘I don't have all the facts yet,' or ‘there are some unknowns'
- An expert will be better than a rookie, but neither can know for sure what the outcome will be. The expert will have seen more scenarios and as such will be able to better predict the outcomes given the facts, but both are still making guesses.
- Make peace with the fact that in many things, we cannot be sure–and that is okay.
- Redefine what it means to be wrong. If you have a 10% chance of your strategy failing, then your strategy fails, you were not wrong. Your bet just didn't work out. That was always a possibility.
- Sometimes long shots land. Blaming the bookie misses the point.
- Beware of resulting-second guessing your decision if it ends badly. If you analyzed the data available and made a sound decision, then the outcome was bad, it doesn't mean you made a bad decision. Luck and/or incomplete data may change the outcome. The decision may still have been sound.
- All decisions are bets.
- We have a predisposition to believe things we hear are true, even if they are not.
- Motivated reasoning is interpreting new information based on your existing beliefs. This is dangerous, but it is our default. It is very hard not to do.
- The purpose of fake news is not to change views or opinions. It's to entrench already held beliefs.
- We are rarely 100% or 0% confident in our beliefs. Thinking in probabilities or percentages brings this to mind. Saying you are 70% confident on a decision reminds us of this and makes it easier change our minds in light of new information. It feels bad to go from, ‘I am 100% convinced,' to ‘I am wrong.' It's much easier to go from, ‘I am 65% confident,' to ‘I am 40%' or ‘There was a always a 35% chance this was going to work out differently than I anticipated.' This way conflicting information isn't a threat.
- Calculate the expected value of new ventures/customers. If there is a 75% chance of landing a $1 million account, that account is worth $750,000. If there is a 5% chance of landing a $25 million account, that account is worth $1.25 million.
- Do a ‘pre-mortem'. Before embarking on a project, imagine you are at the end. What could have gone wrong? This allows you to spot pitfalls but also makes it much easier for people to share dissenting views.
Key Takeaways:
Many of these concepts were not new to me but sometimes they were presented in a new way that grabbed me.
- Everyone in your workplace should use the same vocabulary and concepts. This allows everyone to move in the same direction and align quickly.
- Are you providing a little value to many people or a lot of value to a few people?
- People need to want what you offer. Don't build a product you think is great then try to force people to want it. Find out what they want and build that product.
- Every business is trying to satisfy a need in Maslow's Hierarchy of Needs. The more needs you can meet (and touching on several different levels) the more appealing you will be.
- Often when someone is buying a product, the way it makes them feel or the perceived social status is as important as it's other value. Add social status considerations into your sales pitches.
- Competition is good. It means you have a viable product. It also means you can piggyback on the hard work and innovation of other people.
- Sometimes projects that don't make a lot of money are worth pursuing for the experience or good will you gain.
- 12 Forms of Value: Product, Service, Shared Resource (gym, library, etc.), Subscription, Resale (acquire a product and resell it), Lease/Rental (temporarily grant the use of an asset for a fee), Agency (acting as an intermediary to bring together buyers and sellers), Audience Aggregation (attract a large group of people then sell access to that audience), Loan, Option, Insurance, Capital
- Customer attention is limited. Customers filter their attention, allocating more resources to things they care about. How do we get around their filters? How can we piggyback on something our customers are already paying attention to? When competing for someone's attention, you are competing against everything else in their world. To earn their attention, you need to be more interesting or more useful than all the alternatives. You only care about the attention of people who are likely to purchase from you.
- The best way to cut through the distractions and get someone's attention is to make them feel curious, surprised, or concerned.
- It's not about having the biggest customer base, it's about having the best customer base.
- What is the entry point for our potential customers? If you get to them first, any future or competing offers will have to measure up to yours. For example, Huggies sends free diapers to hospitals and expectant parents. Now, if a diaper is missing a feature that Huggies has, you'll likely prefer Huggies, even if the other diaper is better in other ways.
- How addressable is your target market? It's unlikely to see a conference for people suffering with IBS where you can set up a booth. They would be much more effectively reached through ads on internet chat boards, or services like WebMD, or directly marketing to doctors. On the flipside, if you sell software that can revolutionize customer relationship management, you would likely find success in a booth at a tradeshow where you can actually talk to people and demo it.
- When someone is considering buying something, it's often a theoretical brain exercise, not an emotional thing. When you go for a test drive in a new car, it shifts from a theoretical, fact based decision to an emotional experience. It's much harder to engage your rational brain after the test drive. You're no longer thinking about how much horsepower it has, because you have felt the horsepower. How do we allow people to test drive our products?
- Framing is emphasizing some details and leaving out others. It would take way too long to go through every facet and feature of your product. Select the aspects your prospective customer cares about most. Be conscious of which parts you are highlighting.
- Present your offer. Discuss or clarify any issues the other party has. Answer objections. Remove obstacles. Ask for the sale.
- You're not a salesperson, you're an assistant buyer. You're not pressuring them to give you their money, you're helping them find a solution to a problem.
- Reciprocity. If you do something for someone, they start to feel like they owe you–even something as small as offering them a coffee or snack when they sit in your office.
- Reactivation is often easier than finding a completely new customer. We should have a list of all members that close accounts or payout loans. We can email them every three months with an invitation to come back. Include a special offer in your email.
- Zappos offers free expediated shipping on all orders. Customers are told their order should arrive in 5 business days. It usually arrives next day. What is our equivalent? How to we go above and beyond to surprise our members with exceptional service?
- It's not enough to have a great system or process. You need to maintain that system or process and keep driving it forward.
- Don't always feel the need to ‘compete'. Find your own niche and be really good at it. Blackberry tried to keep up with iPhone, but by the time they launched, iPhone had already iterated so many times, they couldn't catch up.
- The purpose of financial analysis is to make better decisions. If your data is bad, your analysis will be wrong.
- The four ways to increase revenue: 1) Serve more people. 2) Increase value of each transaction. 3) Increase the frequency of transactions per customer. 4) Increase prices.
- What is the lifetime value of a customer? If you sell little souvenirs in a place travelers aren't likely to visit again, their lifetime value is low. If you make thousands of dollars each year on their mortgage, their lifetime value is high. Lifetime value can be used to determine how much it is worth spending to attract a new customer.
- Fixed vs. variable costs. Fixed costs (salaried employees, rent on office space, etc.) are the same each month. Variable costs (raw materials, usage based utilities, hourly workers, etc.) will change in direct proportion to the amount of business you do. Savings in fixed costs accumulate, but savings in your variable costs are amplified by volume. If you make t-shirts and you save $1 per shirt made, your saving increase as you make more shirts, compared to saving $5 on your cell phone bill each month.
- Collect 70% of available information, then make a decision.
- Why is default time for meetings one hour? Like a gas will fill a container, so will your time. If we only had 10 or 20 minutes for a meeting, often we could get the same amount done without all the fluff.
- Keep teams small, elite, and surgical. Avoid communication overhead. The bigger the team gets, more time is spent on communication, less on the work.
- When you ask someone to do something, give them a reason, even if it is small.
- Use testimonials. Celebrity endorsements work because people like, ‘know', and trust them. A celebrity endorsement transfers that trust to you. The same works with a referral from a friend.
- If you lead people and want their thoughts, be very careful sharing your opinion tell after they have shared theirs. Often they will be influenced by your thoughts and you might not get their true opinions.
- Pygmalion effect. Expect more from people and they will give you more. They will live up to your expectations, whether good or bad.
- Gaul's Law: All complex systems that work have evolved from simpler systems that worked. A complex system designed from scratch will not work. Start building the simplest system that meets your needs. Then improve it. Eventually you will have a complex system.
- As soon as you fix one constraint or bottleneck, the next slowest part will become the bottle neck. Going through the cycle of fixing a bottleneck more often and quicker will result in a rapidly improving system.
- Second order effects: Actions have consequences, and those consequences will have consequences. Make changes to complex systems extremely carefully.
- Measuring the wrong thing is worse than measuring nothing. It can distract you from what is truly important.
- If you analyze bad data, your analysis will be bad.
- Intervention bias and null hypothetical. When something happens, you will be tempted to act. This can often lead to bigger problems than just letting things ride. Act carefully.
- When optimizing a system adjust one variable at a time so you can ensure your actions are making the difference you want.
- Make something 85% good enough then move on. Driving for complete perfection will slow you down more than that last 15% is worth and that last 15% might not even be possible.
- Innovate, then slow down and take time to consolidate and maintain what you built.
Maybe it happened, maybe not. I have no trouble believing it's possible. What I do struggle to believe is that the author would have been so up in arms had it been the ‘other side' behind these actions.
What I know for sure is that the further you go to either extreme on the political spectrum, the harder it is for me to give credence to your views. I don't think there are very many issues that are as black and white as most people like to believe. Saying things like “any thinking person would...” or bollocking entire groups of people just because the believe something different than you makes it very difficult for me to think much about what you are saying.
It's hard to know what is true and what isn't. Spending time in an echo chamber makes it very nearly impossible.
I didn't like the author's style. It was repetitive, egotistical, and too confident.
Key takeaways:
- Value Disciplines:
1. Operations Excellence allows you to offer the best price by having the best operations.
2. Product Leadership allows you to provide the best product by constantly innovating.
3. Customer Intimacy allows you to give the best service and customer experience by knowing your customer and what they want.
- Marketing: don't try to sell your company. Just present it. Make something worth buying and trust the consumers will notice.
- Bo talked about one company that had birthday lunches. Everyone with a birthday in the current month got together for a lunch provided by the company.
- Good people resent it when other employees show up late.
- A company needs three things:
1. Steady gross margins that you protect
2. A healthy balance sheet, as shown current cash-to-debt and debt to equity ratios.
3. A sound business model governing how the company delivers value and earns a profit while doing it.
- Protect your Gross Financial Margin. Just because you have sales, doesn't mean you are making money.
- There is an interesting look at Umpqua Bank around 7:41:00 in the audiobook. The bank would be extremely cautious about who was allowed to open accounts the provided exceptional service. It came at a premium, but their clients would happily pay for it.
- “Profits are the by product of a well run business, not end goals by themselves.”
Key takeaways:
I'm struggling. I think there was a lot of good content in this book, but it was hard to see through all the self promotion.
- The COO is not responsible for doing things, rather ensuring things get done.
- Sometimes you need a COO to obey and execute, sometimes you need a COO to challenge you.
- You don't need to be an expert, you just need to hire experts, then get the best out of them. Use the Socratic method.
- Don't make decisions by yourself. Help your experts make the decisions. Empower, don't rescue.
- Momentum creates momentum. Get things done, don't worry about making them perfect. The momentum will carry the projects towards perfection.
- People don't fail, systems fail.
- Aim for systems that can be written on a post-it note that someone with an MBA and someone who has never run a lemonade stand can both execute.
- If the rate of change outside your business is faster than inside, you're out of business.
- Cameron talks about creating an operating manual for yourself that others you work with can read. What frustrates you? What are your principles? What do you expect from others? What excites you? etc. Give people a quick overview of who you are, what to expect from you, and what you will expect from them.
- Break down your plans: annual targets, quarterly plans, monthly touchpoints, weekly activities, daily actions.
- We need to give more thought to interviewing process and annual performance reviews. 3:12:32 in the audiobook.
- The COO and CEO should be friends. Spend time together away from the office once a week or so. Build trust and friendship. Read the same books and talk about them.
- Developing people is more important than getting stuff done.
- Delegating is asking “Who else could do what I'm doing now?”
- Don't speak first and squash the discourse. Encourage everyone to contribute.
Boring. I gave up halfway through. Then I read some reviews, thinking I must have been missing something for this book to be so widely regarded as McCarthy's best work. It seemed a lot of people thought the back half was better. So I picked it up again.
I finished it three days later and I still don't like it.
Interesting enough. It's hard to imagine living during wartime and how the war touched so many lives.
This book and ‘Shadow Divers' made very interesting comparisons between the German and American soldiers as people and the ‘honor' of fighting for one's country. I'm not sure I'm ready to think there was much honor in what Nazi soldiers did, whether they knew about the atrocities being committed or not. Either way, they were the aggressors and I don't know how they justified the actions of their country.
I can't imagine going through the suffering these men endured, even worse that many of them had been pressed into service against their will.
I love reading books about sea voyages gone wrong and am always surprised that under these awful circumstances people continue on. I'm quite sure I would jump overboard at the very first hardship.
- Not quite as interesting as some of his other books, but it was a fun review of how we came to where we are.
- I enjoyed the part toward the end of the book where he explored what would happen if we could go back to an earlier point and rerun evolution. Would humans evolve again? Doubtful. Some mutations, however, seem to have evolved multiple times independently. Sight, notably, has been evolved 40 separate times. Flight has evolved numerous times. It's likely that if evolution could be run again, eyes and flight would both appear.
Key takeaways:
- Saying “I think” or “I feel” is a lot different than saying “I am”. “I feel stressed” instead of “I am stressed” allows us to recognize those thoughts/feelings as activities of our brains and think about them more objectively. It allows us to reframe our experiences and have more control over our actions. We can perceive a thought, instead of just have it.
- When adults perceive and reflect back the feelings of a child, it allows the child to understand their own mind with clarity. This is the foundation of mindsight.
- The tripod of reflection: Openness, observation, and objectivity. To regain control of the mind after we have lost it we need the power of reflection that is at the heart of mindsight. Mindsight emerges as our communication with others and with ourselves, allows us to reflect on who we really are and what is going on inside us.
- Reflection requires an attunement to the self that is supportive and kind, not judgmental.
- Secure attachment means your child will miss you when you leave the room, actively greet you when you return, often with physical contact, but then quickly returns to normal and can continue to play without you. They will be easy to soothe and quick to return to their previous activities.
- The brain responds to the focus of attention. It can change, throughout the lifetime.
- Receptive vs reactive. When someone tells you how they are feeling, can you be receptive to it and try to understand, or do you react? Specifically with feedback.
- Listening to someone is not just trying to hear what they are saying, but feeling what they are feeling.
- The ‘mind' isn't just the brain. You have a nervous system that connects your whole body. A knot in your stomach, tightness in your chest, flushed cheeks, etc., are all part of your ‘mind'. Listen to those signals, they are telling you something important.
The book started slow, going through many previous innovations and making some light commentary about them. About halfway through the book became intensely practical. I was stopping every few minutes to make notes.
Key takeaways:
- Innovation is simply evolution of ideas.
- You should strive for evolution, not revolution. Big, drastic changes rarely work. Even changes that look big and drastic are usually a cumulation of slow, steady progress unveiled.
- Innovation seems obvious in hindsight, but is impossible to predict in the moment.
- Invention vs innovation. Innovation is not making something new, but putting things together in a new way.
- “Failure is only the opportunity to begin again, more intelligently.” Henry Ford
- Bankruptcy laws can stimulate or stifle innovation. States with the homestead exception, allowing you to keep your home through bankruptcy, have considerably more business innovation. As someone that has worked in credit, I have often been frustrated by bankruptcy laws. It is a good reminder that–in certain arenas–bankruptcy can benefit society.
- A recurring theme in this book is that innovation REQUIRES collaboration. Holding too tightly to patents can hinder, rather than help. Come up with your best idea, and share it widely. Someone else will take your foundation and build on it. Then you can benefit from their advances.
- The Monkey Principal: Tackle the hardest part first. If your plan involves a monkey reciting Shakespeare while standing on a pedestal, focus on teaching the monkey to speak. Don't start with building the pedestal.
- Being wrong may hurt, but being slow will kill you. You're better off to try a few things and fail, then you are to be left in the dust.
- Amazon has a reverse veto system. An idea must be forwarded to higher ups even if all buy one of the managers thinks the idea is rubbish.
Major recurring ideas through the book: Innovate often. Share your ideas freely. Too much regulation or red tape stifles innovation. Innovation is good for society as a whole. As your organization gets bigger, it's harder to innovate–there must be a plan for how you will continue to move forward.
For some reason I don't understand, I've always felt a pull to Everest, thinking, “Maybe someday I'll try to climb it.” I have no idea why. I don't like camping. I don't like the cold. I don't enjoy physical exertion in any form. I haven't tried it, but I expect that I wouldn't enjoy defecating on a snowbank on a hill in -36 Celsius and winds reaching 160 kph. Amazingly, this book did nothing to dampen that call.
Some fun facts from the book:
- There are dozens of ways to die on Everest: multiple altitude sicknesses, cold, falling into a crevasse, avalanches, falling serracs, suffocation.
- It takes more than two months to climb.
- The descent is often more dangerous than the assent.
- There are hundreds of bodies on Everest, many along the trail you travel.
- The mountain is littered with garbage and feces.
- The air is so thin at the top, that without acclimatizing, you would be unconscious within 3 - 4 minutes, dead a few minutes later.
- The summit is 29,035 feet above sea level.
Key takeaways:
- 1% better or worse is significant after time, not daily. Time is a magnifier. With time, good habits will lead to exponential improvement, while bad habits will lead to a decline.
- Success is the product of daily choice, not once in a lifetime transformations.
- It's all about trajectory. A millionaire who spends more than they earn is on a bad trajectory, while someone with little money who saves money each month is on a positive trajectory.
- I really enjoyed listening to the story about the cycling team that looked for 1% improvements. They tried different massage oils until they found one that allowed muscles to repair faster so they could train more. They painted the inside of their workshop white so they would see dust/dirt that otherwise might have fallen into a chain or bearing, they tested different fabrics for their uniforms until they found one that allowed them to stay cool without sweating as much or catching the wind, etc.
Identity consider the difference between your beliefs and your actions
Key takeaways:
- Perspective is everything. Look at the book from an outside perspective. Ask yourself what your advice would be if it was a stranger going through this same challenge.
- Just because someone says something is awful/hopeless/broken, doesn't mean you have to agree.
- We defeat emotions [control over us] with logic. Logic is questions and statements. With enough of them, we get to root causes which are always easier to deal with.
“We lost money” > “Aren't losses a common part of business?” > “Yes” > “Are these losses catastrophic?” > “Not necessarily” > “So this is not totally unexpected? How could that be so bad? Why are you so worked about about something that is at least occasionally supposed to happen?” > “Well...” > “And not only that, but you've dealt with worse situations. Wouldn't you be better off applying some of that resourcefulness rather than anger?”
I think I missed a lot of the details in this book because I was a bit sick while reading.
Key takeaways:
- The risk assessment part grabbed me. A typical bank executive's career lasts 28 years. That's not enough to go through more than one major economical event, in most cases. This highlights the need to study history, not relying solely on what you have seen during your career.
