First principles
PEOPLE
Perception is reality.
* Placebos work.
* Hawthorne effect.
* Halo effect.
* There need be no commodities.
* Reality is relative: we each have our own.
Mental expectations set real limits.
* Learned helplessness.
* "They are able because they think they are able." Virgil
* Optimism works better than pessimism.
* Logic = blinders to intuitive exploration.
Modern people have cro magnon brains.
* The human brain is the product of 10 million years of evolution, 99.8% of it in
caves, on the savennah, hunting and gathering.
* Our relatively modern "thinking" brains are in perpetual contact and conflict
with our ancient "feeling" brains.
* Pre-agricultural troglodytes lived entirely in the now. Our brains didn't need to
plan very far ahead, so looking longterm is not in our natural repertoire.
* Our brains seek patterns, often finding one when it's not intentionally there. As
we retell a dream, our brains invent the context to make sense of nonsense. We do
this in waking life as well, but are not conscious of it.
People are warm-blooded, omnivorous, sight-mammals.
* We are creatures.
* Circadian rhythms control our thinking.
* If it full empty it; if it's empty, fill it; if it itches, scratch it.
* Fight or flight response is the root of stress in the office as well as the jungle.
People like what they know; they don't know what they like.
* In marketing, position services for maximum halo effect.
* First we make our habits, then our habits make us.
* Personal comfort zone = blinders, rut.
* Change threatens stability.
Be alert. Keep an open mind. Follow your heart.
* Mindfulness matters.
* Be here now.
* Walk in other people's shoes.
* Get out of your comfort zone.
* Learning is an active process.
To every thing there is a cycle.
* You're born, you live, you die.
* You live on through your children, your start-ups.
* Epigensis = born at the right time.
THINGS
Everything flows.
* Time flies.
* Nothing alive is ever finished.
* Worthwhile documents, policies, reports, and relationships live.
All things are connected.
* Connections often as important as the things they connect.
* Value of a network increases exponentially to the number of nodes.
Less is more.
* Simplicity is the ultimate sophistication
* When confronted with two explanations, choose the simplest.
Everything exists on numerous levels.
* Level of abstraction/detail. Meta-.
* No matter what's happening in the plaza, you can always go up to the balcony
for a look at the bigger picture.
* Laterality, everything/idea has neighbors, related by concept, co-location,
timing, etc.
* Everything is rooted in a life cycle. It's young or old, evolving or dying.
Process is power.
* Give a man a fish and you feed him for a day. Teach a man to fish and you feed
him for a lifetime. --Chinese Proverb
* One person's process is another person's content.
Virtually everything is on a continuum. It's shades of gray rather than black or white.
* There is no absolute truth. There is no meaning without context.
Most things in life are beyond our control.
* Better to think things through than to thrash and force-fit.
* The mind and body are one.
In diversity is strength.
* Diversification decreases risk.
* All of us are smarter than one of us.
Shit happens.
* Entropy.
* Moorphy's Law (On Internet time, shit happens exponentially.)
* Chaos.
ECONOMICS
Decisions are a tradeoff of risk & reward.
* Leverage = How much risk or reward.
* R & R are not logical.
* ...rather, a mix of logic, emotion, biological drives, habit, associations, current
state of mind, etc.
* Information is valuable only to the extent that it will change decisions.
Does it matter?
* What's in it for me?
* What business are we in?
* Principle of materiality.
* Don't fret over the inconsequential.
* Don't sweat the small stuff.
* The past is a sunk cost.
Invest time and resources wisely.
* Time is the scarce resource.
* Optimize mix of up-front preparation and auctual doing and folllow-up.
* Do not confuse thought with action.
* There is no such thing as a free lunch.
* Beware of armchair data.
* Diversify
* Leverage
When management treats time, space and no-matter as resources rather than as
roadblocks, our methods of organization will no longer be lagging behind, at the
end. --Future Perfect
TECHNIQUE
In business, take Jack Welch's advice...
* focus on customers
* resist bureaucracy
* think imaginatively
* invigorate others.
How to behave
* Live as if this is all there is.
* Look for the best in others. Other esteem.
* Share my thoughts and feelings. Be authentic.
* Open the door to feedback.
* Smile. Learn. Laugh. Pay attention.
* Practice optmism. Be here now.
* Live with intention.
* Think out of the box.
* Do what I love. Do it with gusto.
* Maintain balance.
* Don't obsess.
Seek patterns
* Homeostasis -- central tendency, self-correction, standard deviation.
* Pareto's law: 20% of the resources yield 80% of the results.
* Self-organization
* Organize by product or area or function
I don't ask him ”What's the problem?" I say, "Tell me the story." That way, I find out
what the problem really is. --Avram Goldberg
Structure follows strategy. (Strategy = plans and policies by which a company aims
to gain advantages over its competitors.)
Drivel, BS, and caution signs
Time problems.
* Anachronism. Fighting the last war.
* And so he continues to plan his future with the rules of the present in mind --
heedless of the possibility that the future will have rules of its own. Change is
inherent in civilization." --Harry Brown
* Finding comfort in obsolete, vestigial rules and concepts. Accounting is BS.
* Short-term fix for long-term problem
* Too busy chopping down trees to sharpen his ax
Accepting the wrong answer to the right problem.
* Illogical expediency
* Group think
* The madness of crowds
Evaluating with what's easy to measure rather than what's appropriate.
* examples: $/hour, academic grades, IQ, multiple choice
* need to measure what counts
* Nasrudin story
* confusion of means & ends
Information is not instruction.
* Telling is not teaching.
Using my context to understand your situation.
* Jimmy Swaggart syndrome
* Jungian projections
* Cobbler's children
* Crazy psychiatrists
Confusing meaningless social noise with a message.
* "It's a communicating problem."
* "We don't have time."
* "How 'bout them Niners?"
* "Thanks a lot."
A word is not the thing itself.
The Principle of Materiality
As Alan Watts titled a book, "Does it matter?" Contrary to what you may think,
accountants don't strive to account for every penny. They strive to present a fair
picture of an organization's financial condition, not to balance its checkbook. If your
employer is auditing your expenses, a $300 discrepancy on your hotel bill is
probably significant; it's "material." If Deloitte is auditing Exxon, a $5 million
discrepancy in expense reimbursements is trivial -- it's a drop in the bucket that
won't even show up on Exxon's financial statements. I interpret the Principle of
Materiality as "Don't sweat the small stuff." Don't fixate on false accuracy. And if
you're unsure whether or not something's material, change its value up or down to
see if it makes a meaningful difference. Impress your friends by saying you're
performing a "sensitivity analysis." And, never confuse activity with results.
Words to Live By
Time is all we have. Barnaby Conrad
There is no free lunch.
Perception is reality.
Be here now.
Become who you are! Nietsche
Perform every act as if it is all that matters.
Give a man a fish, feed him for a day. Teach a man to fish, feed him for a lifetime.
Chinese Proverb
Make no little plans. They have no magic to stir men's blood. Daniel H. Burnham
Imagination rules the world. Napoleon
Think like a man of action, act like a man of thought. Henri Bergson
One person's constant is another person's variable.
One person's process is another person's content. Jay
Expecting the world to treat you fairly because you are a good person is like
expecting the bull not to charge you because you are a vegetarian. Harold Kushner
Never, Never, Never, Never give up. Winston Churchill
In my life I've experienced many terrible things, a few of which actually happened.
Mark Twain
The word processor is mightier than the particle beam weapon. George Carlin
Life shrinks or expands in proportion to one's courage. The Talmud, also Anais Nin
None of us really understands what's going on with all these numbers. David
Stockman
Don't compromise yourself. You're all you've got. Janis Joplin
If you think you can do a thing, or think you can't do a thing, you're right. Henry
Ford
There is nothing more difficult to take in hand, more perilous to conduct, or more
uncertain in its success, than to take the lead in the introduction of a new order of
things. - From the tomb of Machiavelli
The truth will set you free - but first it will piss you off.
An invasion of armies can be resisted but not an idea whose time has come. Victor
Hugo
We look at the present through the rear-view mirror.
We march backwards into the future.Marshal McLuhan
Don't just learn the tricks of the trade. Learn the trade. James Bennis
In a time of drastic change it is the learners who inherit the future. The learned
usually find themselves equipped to live in a world that no longer exists. Eric Hoffer
It is best to learn as we go, not go as we have learned. Leslie Jeanne Sahler
Edward De Bono on
Simplicity
1. Value simplicity highly.
2. Strive for it.
3. Understanding begets simplicity.
4. Explore alternatives and possibilities.
5. Challenge and discard vestiges.
6. Always be ready to start over.
7. Think conceptually.
8. Break things into pieces.
9. Trade off other values for simplicty.
10. Know who you're making it simple for.
Hubris
Early in life, I had to choose between honest arrogance and hypocritical humility. I
chose honest arrogance and have seen no occasion to change. Frank Lloyd Wright
My father was a contemptible man. I owe my success to not following in his
footsteps. He was lazy; I work very hard. He frittered away his talent, and I nurtured
mine. He was poor as a church mouse, and I'm worth $550 million." John Sperling,
founder and CEO of Apollo Group
Perspective
The real voyage of discovery, wrote Marcel Proust, "lies not in seeking new lands but
in seeing with new eyes."
To get a different view, go up to the balcony. Look at the big picture. Look down
from a higher level to gain a broader perspective. Try to discern what’s really going
on. Back away from the trees to see the forest.
The Law of Raspberry Jam
Formulated by consultant Gerald Weinberg, the Law of Raspberry Jam states "The
more you spread it, the thinner it gets." Few things scale forever.
Focus on core
Focus on core; outsource everything else. Shareholder value (AKA market cap) is a
function of sustained competitive advantage, and organizations achieve it by
leveraging their core competencies. Everything else is context (overhead), and
context is a needless distraction. Without careful management, context always gets
in the way of core because it absorbs time, talent and management attention.
Sunk cost
Don't throw good money after bad. Imagine you've sunk $100,000 into a project.
Another $10,000 and it will be completed. But market conditions have changed and
you'll only recoup $25,000. A colleague discovers an open-source code that will
generate the same $25,000 return for an investment of only $8,000 total. Do you go
for the first option and complete the $110,000 project? Or do you abandon the
$100,000 and go for the cheaper new alternative? The rational businessperson
chooses the second option. The $100,000 is a "sunk cost." It's water over the dam.
You need to make decisions based on incremental costs and incremental rewards.
Paying $8,000 to get $25,000 beats paying $10,000 to get $25,000 any time,
anywhere.
Setting Personal Goals
* Examine attitudes twd money, power, success and time.
* Clarify values, needs, wants.
* Inventory desires in all parts of life.
* Create clear, focused images or mental pictures of what you want.
* Figure out an action plan -- the strategies and tactics necessary to achieve the
goals. "Doubt your doubts and radiate optimism."
"I shall pass through this world but once; any good things, therefore, that I can do,
or any kindness that I can show to any human being, or dumb animal, let me do it
now. Let me not deter it or neglect it, for I shall not pass this way again." --John
Galsworthy
From a review of In Pursuit of Happiness: "the invisible foot," says Milton Friedman.
That's the law of unintended consequences.
Martin Seligman: Life is about happiness -- which people (when pressed) generally
concur isn't a new BMW or an orgasm, but rather lasting and justified satisfaction
with one's life as a whole. Happiness includes the self-respect that comes from
accepting responsibility for one's life and earning one's way in the world. It flows
from realizing your innate capacities by doing productive work and overcoming ever
more challenging obstacles, impelled more by your own inner imperatives than by
the mere need to make a living.
From the Well: Conf: News On/Off the WELL Topic: 643 I should be telecommuting
from Tahiti. Dawn on a beach of pure white sand and green sparkling seas....I catch
the few fish I need for my daily fare and then walk naked down the beach to my
grass hut with massive metal Linking up with the satellite, I quickly type in enough
code to make my daily expenses. Length of my workday? Three minutes and
thirty-seven seconds. I yawn as I turn off my battery-powered laptop and head for
my hammock and a cool glass of fermented coconut milk.
Getting Things Done
Life in the Projects
Fast Company, May 1999, Tom Peters
Distinguished project work is the future of work—for the simple reason that more
than 90% of white-collar jobs are in jeopardy today. They are in the process of
being transformed beyond identification—or completely eliminated. “WOW” projects
add value and leave a legacy (and make you a star.)
“Will we be bragging about this project five years from now? If the odds are low,
what can we do right now to turn up the heat?” Draft people as if you’re an NBA
general manager – get the hottest people you can. And pick projects like a venture
capitalist: bet on cool people who have demonstrated their capacity to deliver cool
projects.
Point of the exercise is not to do a good job; it’s to use every project opportunity
that you can get your hands on to create surprising new ways of looking at old
problems.
Never accept a project as given. That’s someone else’s way of conceptualizing the
project!
1. everyone focuses on the tangibles but the intangibles (i.e. emotion) are what
matters.
2. embrace the confusion: “when we launched this project, we thought we knew
what we were doing. Now we know that we don’t know what we’re doing—but the
things that we’re confused about are much more important.”
3. be your own firm within a firm.
4. think diversity.
5. project management is emotion management.
Reengineering
Reengineering by Mike Hammer (See HBR '89). Managing, or administering,
businesses doesn't work today. What a retched work--administer. It conjures up the
image of a bureaucrat.
The apotheosis of mid-20th-century administrator was Robert McNamara at Ford.
McNamara didn't know anything about cars. He knew nothing about making cars,
nothing about selling cars. He was a financial analyst. He had a deep, unspoken
assumption that work didn't matter.
Reengineering means radically changing how we do our work. Work is the way in
which we create value for customers, how we design, invent, and make products,
how we sell them, how we serve customers. Reengineering means radically
rethinking and redesigning those processes by which we create value and do work.
Titles: I would rip out VP/marketing and replace it with "process owner of finding
and keeping customers."
In a reengineered company you have to leave behind this single-function mentality
and wear more than one hat. You need to do whatever it takes to keep the customer
coming back. Managers are not value-added. A customer never buys a product
because of the caliber of management. Less is better. One of the goals is to
minimize the necessary amount of management.
If you are designing a business for a world of stable growth, then you want the
Adam Smith, Frederick Taylor, Henry Ford model. Trouble is, stable growth does not
characterize our environment today.
"Folks, we're going on a journey. On this journey, we'll carry our wounded and
shoot the dissenters."
A worker is someone who cares about a task, about getting things done, and is
basically working for the wage at the time. We don't need workers in our company.
We need professionals. A professional is someone who focuses on the result, on the
customers rather than on tasks. Professionals need coaches and leaders.
De-engineering
London: What do you think about all the talk today about "re- engineering the
organization." One word I've heard you use is not "re- engineering" but
"de-engineering."
Wheatley: Yes, I put that word out to the world. We really have to "de-engineer" our
thinking, which means that we have to examine how mechanistically we are oriented
-- even in our treatment of one another. This is especially true in corporations. We
believe that we can best manage people by making assumptions more fitting to
machines than people. So we assume that, like good machines, we have no desire,
no heart, no spirit, no compassion, no real intelligence -- because machines don't
have any of that. The great dream of machines is that if you give them a set of
instructions, they will follow it.
I see the history of management as an effort to perfect the instructions that you
hope someone will follow this time -- even though they have never followed
directions in their whole life.
How is the world going to be different because you and I are working together?
A Simpler Way
Author: Margaret Wheatley and Myron Kellner-Rogers in A Simpler Way
There is a simpler way to organize human endeavor. It requires a new way of being
in the world. It requires being in the world without fear. Being in the world with play
and creativity. Seeking after what's possible. Being willing to learn and be surprised.
This simpler way to organize human endeavor requires a belief that the world is
inherently orderly. The world seeks organization. It does not need us humans to
organize it.
This simpler way summons forth what is best about us. It asks us to understand
human nature differently, more optimistically. It identifies us as creative. It
acknowledges that we seek after meaning. It asks us to be less serious, yet more
purposeful, about our work and our lives. It does not separate play from the nature
of being.
The world of a simpler way is a world we already know. We may not have seen it
clearly, but we have been living in it all our lives. It is a world that is more
welcoming, more hospitable to our humanness. Who we are and what is best about
us can more easily flourish.
The world of a simpler way has a natural and spontaneous tendency toward
organization. It seeks order. Whatever chaos is present at the start, when elements
combine, systems of organization appear. Life is attracted to order -- order gained
through wandering explorations into new relationships and new possibilities.
OLD ways die hard. Amid all the evidence that our world is radically changing, we
cling to what has worked in the past. We still think of organizations in mechanistic
terms, as collections of replaceable parts capable of being reengineered. We act as if
even people were machines, redesigning their jobs as we would prepare an
engineering diagram, expecting them to perform to specifications with machinelike
obedience. Over the years, our ideas of leadership have supported this metaphoric
myth. We sought prediction and control, and also charged leaders with providing
everything that was absent from the machine: vision, inspiration, intelligence, and
courage. They alone had to provide the energy and direction to move their rusting
vehicles of organization into the future.
Michael Crichton: In recent decades, many American companies have undergone a
wrenching, painful restructuring to produce high-quality products. We all know what
this requires: Flattening the corporate hierarchy. Moving critical information from the
bottom up instead of the top down. Empowering workers. Changing the system, not
just the focus of the corporation. And relentlessly driving toward a quality product.
because improved quality demands a change in the corporate culture. A radical
change.
Drucker
the first constant in the job of management is to make human strength effective and
human weaknesses irrelevant. That's the purpose of any organization, the one thing
an organization does that individuals can't do better.
Managers are accountable for results, period. They are not being paid to be
philosophers; they are not even being paid for their knowledge. They are paid for
results.
These are the factors stressed by GE in its new management process:
* focus on customers
* resist bureaucracy
* think imaginatively
* invigorate others
Dee Hock on Management
An organization, no matter how well designed, is only as good as the people who
live and work in it. Ultimately what determines the organization's performance is the
approach to management its leaders take.
Associates: Hire and promote first on the basis of integrity; second, motivation;
third, capacity; fourth, understanding; fifth, knowledge; and last and least,
experience. Without integrity, motivation is dangerous; without motivation, capacity
is impotent; without capacity, understanding is limited; without understanding,
knowledge is meaningless; without knowledge, experience is blind. Experience is
easy to provide and quickly put to good use by people with all the other qualities.
Employing Yourself: Never hire or promote in your own image. It is foolish to
replicate your strength. It is idiotic to replicate your weakness. It is essential to
employ, trust, and reward those whose perspective, ability, and judgment are
radically different from yours. It is also rare, for it requires uncommon humility,
tolerance, and wisdom.
Compensation: Money motivates neither the best people, nor the best in people. It
can move the body and influence the mind, but it cannot touch the heart or move the
spirit; that is reserved for belief, principle, and morality. As Napoleon observed, "No
amount of money will induce someone to lay down their life, but they will gladly do
so for a bit of yellow ribbon."
Form and Substance: Substance is enduring, form is ephemeral. Failure to
distinguish clearly between the two is ruinous. Success follows those adept at
preserving the substance of the past by clothing it in the forms of the future.
Preserve substance; modify form; know the difference. The closest thing to a law of
nature in business is that form has an affinity for expense, while substance has an
affinity for income.
Creativity: The problem is never how to get new, innovative thoughts into your
mind, but how to get old ones out. Every mind is a room packed with archaic
furniture. You must get the old furniture of what you know, think, and believe out
before anything new can get in. Make an empty space in any corner of your mind,
and creativity will instantly fill it.
Leadership: Here is the very heart and soul of the matter. If you look to lead, invest
at least 40% of your time managing yourself--your ethics, character, principles,
purpose, motivation, and conduct. Invest at least 30% managing those with
authority over you, and 15% managing your peers. Use the remainder to induce
those you "work for" to understand and practice the theory. I use the terms "work
for" advisedly, for if you don't understand that you should be working for your
mislabeled "subordinates," you haven't understood anything. Lead yourself, lead
your superiors, lead your peers, and free your people to do the same. All else is
trivia.
Dee Hock on Organizations
Whenever Dee Hock talks to people about chaordic organizations, someone always
wants to know, "Where's the plan? How do we implement it?" But that's the wrong
question, he says, because an organization isn't a machine that can be built
according to a blueprint.
"All organizations are merely conceptual embodiments of a very old, very basic
idea--the idea of community. They can be no more or less than the sum of the
beliefs of the people drawn to them; of their character, judgments, acts, and
efforts," Hock says. "An organization's success has enormously more to do with
clarity of a shared purpose, common principles and strength of belief in them than to
assets, expertise, operating ability, or management competence, important as they
may be."
The organization must be adaptable and responsive to changing conditions, while
preserving overall cohesion and unity of purpose. This is the fundamental paradox
facing businesses, governments, and societies alike, says Hock--not to mention
living cells, brains, immune systems, ant colonies, and most of the rest of the
natural world. Adaptability requires that the individual components of the system be
in competition. And yet cohesion requires that those same individuals cooperate with
each other, thereby giving up at least some of their freedom to compete.
Selling your ideas
Selling the value of a project to management takes more than talking like a
businessperson. It requires thinking like a business person. In essence, if you’re not
there already, you must become a business person. The overriding focus of business
leaders is creating value for stakeholders. Stakeholders include owners, managers,
workers, partners, and customers. The firm’s leaders are responsible for articulating
a vision of how the organization will create value and specifying milestone
objectives along the way there. Any businessperson worthy of the name can relate
how his or her activities support those objectives and help fulfill the vision. You
should be able to articulate how what you're doing establishes value in these areas.
This is your "elevator pitch" and you should be able to giive it in your sleep.
Analysis and Decision-making Techniques
Here are techniques for business analysis and decision-making that we rely on
continually. We suggest you run through them when making major decisions until
they become second nature.
* Trade-off. Every business decision is a trade-off. (If there’s no trade-off, it’s a
no-brainer.) We find it useful to list the pro’s of doing something and the con’s of
not doing it or doing something else. Try to be aware of what you’re trading off
when making a decision.
* Risk. Every decision is made with less than perfect information, and every
decision entails taking a risk. The way to make sound decisions is to judge when
you have enough information to move ahead and when the level of risk is
acceptable. A decision-maker who takes no risk receives no reward. A
decision-maker who disregards risk is a fool, a pauper, or both. Financial decisions
trade off risk and reward. An important corollary: There is no free lunch.
* Empathy. To understand your customer, walk a mile in her shoes. Here’s how.
Make up several representative customers (personas). Give them names, positions,
likes, gripes, habits, intelligence and personalities. When you’re planning marketing
campaigns and learning activities, stop every now and again to slip into these
personas’ shoes. How does our proposal make them feel?
* The Pareto Principle, also known as the 80/20 rule, describes the common
situation where 20% of the effort gets 80% of the results. It’s not uncommon for
20% of the sales force to make 80% of the sales. Or 20% of the customers to
generate 80% of the profits. It’s likely that 20% of your effort produces 80% of your
results. The point is that input and output are not balanced. As marketers, we break
the market into pieces (“segments”) in order to identify and focus our attention on
the significant few who produce most of the results. As designers of learning
experiences, less is often more. Find the elusive 20% of the learner’s time that
yields 80% of what is learned and put your energies there.
* The bottom line. Earnings. Profit. Revenue minus costs. Over time, profit and
shareholder value are the same thing. The total value of the shares is equivalent to
the stream of expected future profits, discounted for the cost of capital. Forgive us if
you find this obvious, but you must be able to relate your decisions and choices to
the profitability of your organization. Otherwise, you will not be able to make sound
decisions as conditions change. Focus on core; outsource everything else.
Shareholder value (AKA market cap) is a function of sustained competitive
advantage, and organizations achieve it by leveraging their core competencies.
Everything else is context (overhead), and context is a needless distraction. Without
careful management, context always gets in the way of core because it absorbs time,
talent and management attention.
* To get a different view, go up to the balcony. Look down from a higher level to
gain a broader perspective. Try to discern what’s really going on. Back away from
the trees to see the forest.
Business leaders present themselves to the world as confident, authoritative,
conservative, results-oriented, deliberate, and a bit staid. It’s best to leave your
clown suit in the closet when you’re selling a concept to executives. Be concise. Hit
the concepts described above as they apply to your project. When you’ve said your
piece, ask for questions and sit down.
"It is useless for the sheep to pass resolutions in favor of vegetarianism while the
wolf remains of a different opinion." -W.R. Inge
"A democracy is a sheep and two wolves deciding on what to have for lunch.
Freedom is a well armed sheep contesting the results of the decision." - Benjamin
Franklin
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