Freakonomics did a podcast on Trader Joe’s strategy and company culture.

The Big Idea: ignore competitors and focus on your customers; hire for cultural fit.

How is Trader Joe’s different from competitors?

• They are a privately held company.
• They turn down all media requests.
• They carry no brand names — only private labels.
• They don’t advertise on TV, radio, internet, or print.
• They don’t engage in social media.
• They don’t offer coupons.
• They don’t have a loyalty program or collect customer data.
• They don’t offer self-checkout.
• Their stores are small.
• They carry 10% the total number of SKUs of competitors.
• Their prices are lower than the competition.

How is Trader Joe’s doing vs competitors?

• Their prices are lower than the competition, but…
• They have 3-4x the sales per square foot of competitors, by a wide margin.
• They are ranked in the Top 100 Companies to Work For.
• Customers are loyal fans, with many web sites and FB groups dedicated to Trader Joe’s.

What are the key lessons for companies?

• Ignore what your competitors are doing and think for yourself.
• Try out different things and see what works.
• Trader Joe’s competitive moat isn’t one thing. It’s the combination of culture, employees, values, private label strategy, real estate strategy, pricing strategy, and branding — all supporting each other.
• Private labels means fewer vendors. Fewer vendors means more purchasing power. More purchasing power means lower COGS.
• Focus new hire training on culture and values, vs process.
• Good packaging and copywriting matters. Copywriting requires knowing your customer.
• Low cost structure (few vendors, private labels, no advertising, cheap rent) gives them the opportunity to invest in the long-term. With the extra margin, they are able to 1) improve packaging and copywriting, 2) offer higher pay and better benefits to retain good employees, 3) spend more on training new hires, 4) hire more cashiers for a better experience — all while keeping prices low.
• Understand human behavior. “Paradox of choice” means it might be better to have fewer choices. “Scarcity” means it might be better to have products available for a limited time. “Variety” means it might be better to continuously replace old products with new products.

The Big Idea: focus on profit not revenue; meetings interrupt deep work; remote work leads to deep work and attracts top talent.

1. Think of your company as the primary product that you are building. What are the features and benefits of your company? What areas of the company need improvement?
2. Think about how the company is built early on, because, later, it’s much harder to fix.
3. Focus on profit. If you’re profitable, you can stay in business forever. Companies that raise and spend money learn to become good at raising and spending money.
4. 40 hours a week is plenty of time to do great work. Learn how to eliminate time-wasters.
5. No meetings. Instead discuss things online and asynchronously, so that people can engage when they are ready.
6. No conversations allowed in open office spaces.
7. Turn off notifications to let people concentrate.
8. No real-time chat, with some exceptions.
9. Build a remote work company if you really want to hire the best people in the world. Not just in your city.

The Big Idea: History may not repeat itself, but it often rhymes.

Chapter I: Hesitations

• The present is the past rolled up for action, and the past is the present unrolled for understanding.

Chapter II: History and the Earth

• History is subject to geology.
• River, lakes, oases, and oceans draw settlers to their shores, for water is the life of organisms and towns, and offers inexpensive roads for transport and trade.
• The development of the airplane will again alter the map of civilization.
• Russia, China, and Brazil , which were hampered by the excess of their land mass over their coasts, will cancel part of that handicap by taking to the air.

Chapter III: Biology and History

• History is a fragment of biology: the life of man is a portion of the vicissitudes of organisms on land and sea.
• The laws of biology are the fundamental lessons of history.
• The first biological lesson of history is that life is competition.
• The second biological lesson of history is that life is selection. In the competition for food or mates or power some organisms succeed and some fail. In the struggle for existence some individuals are better equipped than others to meet the tests of survival.
• We are all born unfree and unequal.
• Inequality is not only natural and inborn, it grows with the complexity of civilization. Leave men free, and their natural inequalities will multiply.
• Only the man who is below the average in economic ability desires equality; those who are conscious of superior ability desire freedom; and in the end superior ability has its way.
• Utopias of equality are biologically doomed.
• The best that the amiable philosopher can hope for is an approximate equality of legal justice and educational opportunity.
• The third biological lesson of history is that life must breed. Nature has no use for organisms, variations, or groups that cannot reproduce.
• If the human brood is too numerous for the food supply, Nature has three agents for restoring the balance: famine, pestilence, and war.

Chapter IV: Race and History

• The South creates the civilizations, the North conquers them, ruins them, borrows from them, spreads them: this is one summary of history.
• American civilization is still in the stage of racial mixture.
• Civilization is a co-operative product, and nearly all peoples have contributed to it.

Chapter V: Character and History

• History shows little alteration in the conduct of mankind. The Greeks of Plato’s time behaved very much like the French of modern centuries; and the Romans behaved like the English.
• The conservative who resists change is as valuable as the radical who proposes it. New ideas should be compelled to go through the mill of objection, opposition, and contumely.
• It is good that the old should resist the young, and that the young should prod the old.

Chapter VI: Morals and History

• For sixteen centuries the Jewish enclaves in Christendom maintained their continuity and internal peace by a strict and detailed moral code, almost without help from the state and its laws.
• History can be divided into three stages — hunting, agriculture, industry. We may expect that the moral code of one stage will be changed in the next.
• In the hunting stage a man had to be ready to chase and fight and kill.
• When men passed from hunting to agriculture, industriousness became more vital than bravery, regularity and thrift more profitable than violence, peace more victorious than war.
• Industrial Revolution changed the economic form and moral superstructure of European and American life. Men, women, and children left home and family, authority and unity, to work as individuals. Education spread religious doubts. The old agricultural moral code began to die.
• Sin has flourished in every age .
• We are in a transition between a moral code that has lost its agricultural basis and another that our industrial civilization has yet to forge into social order and normality.

Chapter VII: Religion and History

• Religion does not seem at first to have had any connection with morals. Apparently, according to Petronius and Lucretius, “it was fear that first made the gods” — fear of hidden forces in the earth, rivers, oceans, trees, winds, and sky.
• Priests used these fears and rituals to support morality and law did religion become a force vital.
• Though the Catholic Church served the state, it claimed to stand above all states, as morality should stand above power.
• Nature and history do not agree with our conceptions of good and bad; they define good as that which survives, and bad as that which goes under.
• The universe has no prejudice in favor of Christ as against Genghis Khan .
• Francis Bacon proclaimed science as the religion of modern emancipated man.
• The replacement of Christian with secular institutions is the culminating and critical result of the Industrial Revolution.
• But if another great war should devastate Western civilization, the resultant destruction of cities, the dissemination of poverty, and the disgrace of science may leave the Church, as in A.D. 476, our sole hope.
• Religion has many lives, and a habit of resurrection.
• Puritanism and paganism — the repression and the expression of the senses and desires — alternate in mutual reaction in history.

Chapter VIII: Economics and History

• History, according to Karl Marx, is economics in action.
• The motives of the (usually hidden) leaders may be economic or lust for power, but the result of many wars and revolutions is largely determined by the passions of the mass.
• The men who can manage men, manage the men who can manage only things.  The men who can manage money manage all.
• Bankers have held controlled history, from the Medici of Florence, to the Rothschilds of Paris, to the Morgans of New York.
• Bankers understand that history is inflationary, and that money is the last thing a wise man will hoard.
• Every economic system must rely upon some form of the profit motive to stir individuals.
• The concentration of wealth is a natural result of the concentration of ability, and regularly recurs in history. Democracy accelerates the concentration of wealth. 
• The gap between the wealthiest and the poorest is now greater than at any time since Imperial plutocratic Rome.
• When inequality reaches a tipping point, it is met by legislation redistributing wealth or by revolution distributing poverty.
• We conclude that the concentration of wealth is natural and inevitable, and is periodically alleviated by violent or peaceable partial redistribution.

Chapter IX: Socialism and History

• The struggle of socialism against capitalism is part of the historic rhythm in the concentration and dispersion of wealth.
• There have been socialistic experiments in a dozen countries and centuries. 
• In Sumeria, about 2100 B.C., the economy was organized by the state. 
• In Babylonia (1750 B.C.) the law code of Hammurabi fixed wages. 
• In Egypt under the Ptolemies (323 B.C. – 30 B.C.) the state owned the soil and managed agriculture.
• Rome had its socialist interlude under Diocletian.
• China has had several attempts at state socialism. The Emperor Wu Ti (140 B.C. – 87 B.C.) nationalized the resources. Wang Mang (A.D. 9–23) nationalized the land, divided it into equal tracts among the peasants, and put an end to slavery. The rich Liu family put itself at the head of a general rebellion, slew Wang Mang, and repealed his legislation. Everything was as before. Wang An-shih, as premier (1068 – 85), undertook a pervasive governmental domination of the Chinese economy.
• The longest-lasting regime of socialism yet known to history was set up by the Incas in what we now call Peru. This system endured till the conquest of Peru by Pizarro in 1533. 
• During the Protestant Reformation in Germany, Thomas Münzer, a preacher, called upon the people to overthrow the princes, the clergy, and the capitalists. 
• In 1600s, Levellers in Cromwell’s army begged him in vain to establish a communistic utopia in England.
• Karl Marx and Friedrich Engels gave the movement its Magna Carta in the Communist Manifesto of 1847, and its Bible in Das Kapital (1867–95).
• The fear of capitalism has compelled socialism to widen freedom, and the fear of socialism has compelled capitalism to increase equality.

Chapter X: Government and History

• The prime task of government is to establish order.
• Power naturally converges to a center.
• Today international government is developing as industry, commerce, and finance override frontiers and take international forms.
• Monarchy seems to be the most natural kind of government.
• Democracies, by contrast, have been hectic interludes.
• All in all, monarchy has had a middling record, full of nepotism, irresponsibility, and extravagance.
• Most governments have been oligarchies, ruled by a minority, by birth, as in aristocracies, by a religious organization, as in theocracies, or by wealth, as in democracies.
• Minority government is as inevitable as the concentration of wealth.
• Modern aristocracies have resulted in rulers living a careless and dilettante hedonism, a lifelong holiday.
• Does history justify revolutions? In most instances the effects achieved by the revolution would apparently have come without it through the gradual compulsion of economic developments.
• Violent revolutions do not so much redistribute wealth as destroy it.
• There may be a redivision of the land, but the natural inequality of men soon re-creates an inequality of possessions and privileges, and raises to power a new minority with essentially the same instincts as in the old.
• The only real revolutionists are philosophers and saints.
• In strict usage of the term, democracy has existed only in modern times.
• Socrates condemned the triumphant democracy of Athens as a chaos of class violence.
• Plato’s reduction of political evolution to a sequence of monarchy, aristocracy, democracy, and dictatorship found another illustration in the history of Rome. 
• In the first century BC, rival factions competed in the wholesale purchase of candidates and votes. Battle replaced the auctioning of victory; Caesar won, and established a popular dictatorship. Aristocrats killed him, but ended by accepting the dictatorship of his grandnephew and stepson Augustus (27 B.C.). Democracy ended, monarchy was restored; the Platonic wheel had come full turn.
• The American Revolution was not only a revolt of colonials against a distant government; it was also an uprising of a native middle class against an imported aristocracy. A government that governed least was admirably suited to liberate those individualistic energies that transformed America from a wilderness to a material utopia.
• New conditions gave America a democracy more basic and universal than history had ever seen. But these conditions have faded away. Personal isolation is gone through the growth of cities. Personal independence is gone through the dependence of the worker upon tools and capital that he does not own. Free land is gone. Economic freedom, even in the middle classes, becomes more and more exceptional.
• Every advance in the complexity of the economy puts an added premium upon superior ability, and intensifies the concentration of wealth, responsibility, and political power.
• Democracy is the most difficult of all forms of government, since it requires the widest spread of intelligence. Lincoln supposed, that “you can’t fool all the people all the time,” but you can fool enough of them to rule a large country.
• Democracy has done less harm, and more good, than any other form of government. Athens and Rome became the most creative cities in history. If equality of educational opportunity can be established, democracy will be real and justified.
• if the itch to rule the world requires a large military establishment and appropriation, the freedoms of democracy may one by one succumb.
• If race or class war divides us into hostile camps, changing political argument into blind hate, one side or the other may overturn the hustings with the rule of the sword. 
• If our economy of freedom fails to distribute wealth as ably as it has created it, the road to dictatorship will be open to any man who can persuasively promise security to all.

Chapter XI: History and War

• War is one of the constants of history, and has not diminished with civilization or democracy.
• In the last 3,421 years of recorded history only 268 have seen no war.
• In every century the generals and the rulers (with rare exceptions like Ashoka and Augustus) have smiled at the philosophers’ timid dislike of war.
• Even a philosopher, if he knows history, will admit that a long peace may fatally weaken the martial muscles of a nation.
• Perhaps we are now restlessly moving toward that higher plateau of competition; we may make contact with ambitious species on other planets or stars; soon thereafter there will be interplanetary war. Then, and only then, will we of this earth be one.

Chapter XII: Growth and Decay

• Why is it that history is littered with the ruins of civilizations? Is death is the destiny of all?
• History repeats itself, but only in outline and in the large. There is no certainty that the future will repeat the past.
• Civilizations begin, flourish, decline, and disappear — or linger on as stagnant pools.
• Most states took form through the conquest of one group by another. 
• What are the causes of decay?
• Shall we suppose, with Spengler and many others, that each civilization is an organism? It is tempting to explain the behavior of groups through analogy with physiology or physics. 
• A civilization declines when its leaders fail to meet the challenges of change. The challenges may come from a dozen sources , and may by repetition or combination rise to a destructive intensity.
• Challenges: climate, food, inequality, morality.
• Do civilizations die? Not quite.
• Greek civilization is not really dead. Homer has more readers now than in his own day and land.
• Nations die. But the resilient man picks up his tools and his arts, and moves on. Civilization migrates with him.

Chapter XIII: Is Progress Real?

• All technological advances will have to be written off as merely new means of achieving old ends. The nature of man does not really change. 
• Science and technology are neutral. Our comforts and conveniences may have weakened our physical stamina and our moral fiber. We are the same trousered apes at two thousand miles per hour as when we had only legs. 
• We have laudably bettered the conditions of life for skilled workingmen and the middle class, but we have allowed our cities to fester with dark ghettos and slimy slums.
• Are our manners better than before, or worse?
• Has there been any progress at all in philosophy since Confucius ?
• If progress means increase in happiness, we are not happier. 
• If progress means the increasing control of the environment by life, then progress is real.
• Longevity in European and American whites has tripled in the last three centuries.
• Famine has been eliminated in modern states. Science has diminished superstition, obscurantism, and religious intolerance. Technology has spread food, home ownership, comfort, education. 
• Our civilization will probably die. But we have said that a great civilization does not entirely die. Some precious achievements always survive. Education is the transmission of civilization. As long as the transmission is not interrupted, civilization’s achievements and progress will endure. 
• The heritage that we can now more fully transmit is richer than ever before. History is, above all else, the creation and recording of that heritage.

THE BIG IDEA: Great companies have a clear purpose for their existence, and it’s not the pursuit of money.

INTRODUCTION

The Wright brothers were able to inspire those around them and truly lead their team to develop a technology that would change the world.

Apple inspires. Apple starts with Why. Steve Jobs and Steve Wozniak, men not motivated by money, envisioned a nobler purpose for the technology. They saw the personal computer as a way for the little man to take on a corporation. What has made Apple special is that they’ve been able to repeat the pattern over and over and over.

Great leaders are able to inspire people to act. Those who are able to inspire give people a sense of purpose or belonging that has little to do with any external incentive or benefit to be gained.

Companies that have a clear WHY have the most loyal customers and the most loyal employees. They tend to be more profitable than others in their industry. They are more innovative, and most importantly, they are able to sustain all these things over the long term.

People who love going to work are more productive and more creative. They go home happier and have happier families. They treat their colleagues and clients and customers better. Inspired employees make for stronger companies and stronger economies.

PART 1: A WORLD THAT DOESN’T START WITH WHY

CH 2: CARROTS AND STICKS

If you truly have a first-mover’s advantage, it’s probably lost in a matter of months.

There are only two ways to influence human behavior: you can manipulate it or you can inspire it.

Playing the price game or relying on promotions are such common manipulations that we often forget that we’re being manipulated in the first place.

Fear can manipulate us into buying. Aspirational messages can also manipulate us into buying. But both are still manipulations.

I cannot dispute that manipulations work, but these manipulations don’t last. Manipulations don’t breed loyalty .

In business, leadership means that customers will continue to support your company even when you slip up.

Loyalty is when people are willing to turn down a better product or a better price to continue doing business with you. Loyal customers often don’t even bother to research the competition or entertain other options. Loyalty is not easily won.

Manipulations lead to transactions, not loyalty.

Manipulations are a perfectly valid strategy for driving a transaction, or for any behavior that is only required once or on rare occasions.

After September 11, there were customers who sent checks to Southwest Airlines to show their support. One note that accompanied a check for $1,000 read, “You’ve been so good to me over the years, in these hard times I wanted to say thank you by helping you out.”

Knowing you have a loyal customer and employee base not only reduces costs, it provides massive peace of mind. Like loyal friends, you know your customers and employees will be there for you when you need them most. It is the feeling of “we’re in this together,” shared between customer and company, voter and candidate, boss and employee, that defines great leaders.

The danger of manipulations is that they work. And because manipulations work, they have become the norm, practiced by the vast majority of companies and organizations, regardless of size or industry.

PART 2: AN ALTERNATIVE PERSPECTIVE

CH 3: THE GOLDEN CIRCLE

Very few people or companies can clearly articulate WHY they do WHAT they do. When I say WHY, I don’t mean to make money — that’s a result. By WHY I mean what is your purpose, cause or belief? WHY does your company exist? WHY do you get out of bed every morning? And WHY should anyone care?

People don’t buy WHAT you do, they buy WHY you do it.

Apple’s WHY, to challenge the status quo and to empower the individual, is a pattern in that it repeats in all they say and do. It comes to life in their iPod and even more so in iTunes.

And it is Apple’s clarity of WHY that gives them such a remarkable ability to innovate, often competing against companies seemingly more qualified than they, and succeed in industries outside their core business.

Knowing your WHY is not the only way to be successful, but it is the only way to maintain a lasting success and have a greater blend of innovation and flexibility.

CH 4: THIS IS NOT OPINION, THIS IS BIOLOGY

Our desire to feel like we belong is so powerful that we will go to great lengths, do irrational things and often spend money to get that feeling.

The power of WHY is not opinion, it’s biology.

The limbic brain is responsible for all of our feelings, such as trust and loyalty. It is also responsible for all human behavior and all our decision-making ,

We often trust our limbic brain even if the decision flies in the face of all the facts and figures.

Companies that fail to communicate a sense of WHY force us to make decisions with the rational brain.

Decisions started with WHY — the emotional component of the decision — and then the rational components allowed the buyer to verbalize or rationalize the reasons for their decision.

This is what we mean when we talk about winning hearts and minds . The heart represents the limbic brain and the mind is the rational brain.

Winning hearts takes more work.

We trust our gut to help us decide whom to vote for or which shampoo to buy.

It is not logic or facts but our hopes and dreams, our hearts and our limbic brain, that drive us to try new things .

CH 5: CLARITY, DISCIPLINE AND CONSISTENCY

If the leader of the organization can’t clearly articulate WHY the organization exists in terms beyond its products or services, then how does he expect the employees to know WHY to come to work?

To inspire starts with the clarity of WHY.

HOWs are your values or principles. HOWs are the actions you take to realize that belief. WHATs are the results of those actions — everything you say and do: your products, services, marketing, PR, culture and whom you hire.

Authenticity is when you say and do the things you actually believe. Authenticity cannot be achieved without clarity of WHY.

Southwest had no first mover’s advantage. Southwest was not built to be an airline. It was built to champion a cause. They just happened to use an airline to do it.

In the early 1970s, only 15 percent of the traveling population traveled by air. At that rate, the market was small enough to scare off most would-be competitors to the big airlines. But Southwest wasn’t interested in competing against everyone else for 15 percent of the traveling population. Southwest cared about the other 85 percent. Back then, if you asked Southwest whom their competition was, they would have told you, “We compete against the car and the bus.” But what they meant was, “We’re the champion for the common man.” That was WHY they started the airline.

Southwest Airlines’ guiding principles and values stemmed directly from their WHY and were more common sense than anything else.

In the 1970s, air travel was expensive, and if Southwest was going to be the champion for the common man, they had to be cheap.

And in a day and age when air travel was elitist — back then people wore ties on planes — as the champion for the common man, Southwest had to be fun.

In a time when air travel was complicated, with different prices depending on when you booked, Southwest had to be simple.

Cheap, fun and simple. That’s HOW Southwest did it.

Those who could relate to Southwest, those who saw themselves as average Joes, now had an alternative to the big airlines. And those who believed what Southwest believed became fiercely loyal to the company. They felt Southwest was a company that spoke directly to them and directly for them. More importantly, they felt that flying Southwest said something about who they were as people. The loyalty that developed with their customers had nothing to do with price. Price was simply one of the ways the airline brought their cause to life.

What Southwest has achieved is the stuff of business folklore. As a result of WHY they do what they do, and because they are highly disciplined in HOW they do it, they are the most profitable airline in history.

Everything Southwest says and does is authentic. Everything about them reflects the original cause King and Kelleher set out to champion decades earlier.

Differentiation happens in WHY and HOW you do it. Southwest isn’t the best airline in the world. Nor are they always the cheapest. But WHY they do it is crystal clear and everything they do proves it. There are many ways to motivate people to do things, but loyalty comes from the ability to inspire people.

PART 3: LEADERS NEED A FOLLOWING

CH 6: THE EMERGENCE OF TRUST

And if a company mistreats their people, just watch how the employees treat their customers. Mud rolls down a hill.

Trust begins to emerge when we have a sense that another person or organization is driven by things other than their own self-gain.

You have to earn trust by communicating and demonstrating that you share the same values and beliefs. You have to talk about your WHY and prove it with WHAT you do.

Those who lead are able to do so because those who follow trust that the decisions made at the top have the best interest of the group at heart. In turn, those who trust work hard because they feel like they are working for something bigger than themselves.

Follow your metric but also recognize that problems arise, however, when the metric becomes the only measure of success. Remember WHY you set out to achieve the metric in the first place.

Hire people who believe what you believe. When you hire those who believe what you believe, success seems to just happen.

Ad for Shackleton’s voyage: “Men wanted for hazardous journey. Small wages, bitter cold, long months of complete darkness, constant danger, safe return doubtful. Honour and recognition in case of success.”

Southwest Airlines is a great example of a company with a knack for hiring good fits. Their ability to find people who embody their cause makes it much easier for them to provide great service. As Herb Kelleher famously said, “You don’t hire for skills, you hire for attitude. You can always teach skills.”

Simply hiring people with a solid résumé or great work ethic does not guarantee success.

For years, Southwest didn’t have a complaints department — they didn’t need one. Their genius came from figuring out why some people were such good fits and then developing systems to find more of them.

Great companies don’t hire skilled people and motivate them, they hire already motivated people and inspire them. People are either motivated or they are not.

Companies with a strong sense of WHY are able to inspire their employees. Those employees are more productive and innovative, and the feeling they bring to work attracts other people eager to work there as well.

Wwhen companies feel the need to pay mega-salaries to “get the best talent.” Those people are not necessarily showing up because they believe in your WHY, they are showing up for the money.

Average companies give their people something to work on. In contrast, the most innovative organizations give their people something to work toward.

The role of a leader is to create an environment in which great ideas can happen.

If the people inside a company are told to come to work and just do their job, that’s all they will do. If they are constantly reminded WHY the company was founded and told to always look for ways to bring that cause to life while performing their job, however, then they will do more than their job.

Companies with a clear sense of WHY tend to ignore their competition.

When people come to work with a higher sense of purpose, they find it easier to weather hard times or even to find opportunity in those hard times.

Great organizations become great because the people inside the organization feel protected. Trust matters.

Passion comes from feeling like you are a part of something that you believe in.

Herb Kelleher recognized that to get the best out his employees he needed to create an environment in which they felt like the company cared about them.

CH 7: HOW A TIPPING POINT TIPS

Marketers are always trying to influence the influencers, but few really know how.

It is nearly impossible to “convince” someone of the value of your products or ideas based on rational arguments and tangible benefits.

Manipulations don’t breed loyalty.

The goal of business then should not be to simply sell to anyone who wants what you have, but rather to find people who believe what you believe.

You don’t just want any influencer, you want someone who believes what you believe. The entire act of incentivizing an influencer is manipulative.

When you start with WHY, those who believe what you believe are drawn to you.

Martin Luther King Jr gave the “I Have a Dream” speech, not the “I Have a Plan” speech.

PART 4: HOW TO RALLY THOSE WHO BELIEVE

CH 8: START WITH WHY, BUT KNOW HOW

Bill Gates doesn’t have natural charismatic energy, but he still inspires.

All great leaders inspire because they have clarity of WHY.

Bonuses, promotions, other carrots and even a few sticks can get people to work harder, for sure, but the gains are, like all manipulations, short-term.

Loyalty among employees is when they turn down more money or benefits to continue working at the same company.

An airline gave Herb Kelleher the perfect outlet to spread his belief in freedom.

The WHAT level is where the rubber meets the road. It is at this level that the majority of the employees sit and where all the tangible stuff actually happens.

For every great leader, there is an inspired person focused on the HOW. They take the intangible cause and build the infrastructure that can give it life.

Walt Disney dreamed, while Roy Disney built the empire.

Herb Kelleher was able to personify and preach the cause of freedom, but it was Rollin King who came up with the idea for Southwest Airlines.

Steve Jobs was the rebel’s evangelist, but Steve Wozniak is the engineer who made Apple work.

CH 9: KNOW WHY. KNOW HOW. THEN WHAT?

WHAT you do can change with the times, but WHY you do it never does.

As a company grows, the CEO’s job is to personify the WHY.

The leader must ensure that there are people on the team who believe what they believe and know HOW to build it.

The general employees are responsible for demonstrating the WHY to the outside world in whatever the company says and does. The challenge is that they are able to do it clearly.

CH 10: COMMUNICATION IS NOT ABOUT SPEAKING, IT’S ABOUT LISTENING

Copying WHAT or HOW things are done at high-performing organizations will inherently work for you is just not true.

Starting with WHY not only helps you know which is the right advice for you to follow, but also to know which decisions will put you out of balance.

With a WHY clearly stated in an organization, anyone within the organization can make a decision as clearly and as accurately as the founder.

The reason we trust Disney is simple; we know what Disney believes in. We also know what Southwest Airlines believes in.

Volkswagen, which translated means “people’s car,” had spent generations making cars for you and me. We know what Volkswagen believes in.

PART 5: THE BIGGEST CHALLENGE IS SUCCESS

CH 11: WHEN WHY GOES FUZZY

Sam Walton believed that if he looked after people, people would look after him. Service was a higher cause. For Wal-Mart, forgetting their founder’s WHY has come at a very high cost.

“Celebrate your successes,” said Walton “Find some humor in your failures. Don’t take yourself so seriously. Loosen up and everybody around you will loosen up.”

Success and achievement are not the same thing. Achievement comes when you pursue and attain WHAT you want. Success comes when you are clear in pursuit of WHY you want it.

CH 12: SPLIT HAPPENS

As companies grew more successful, WHAT starts to take priority over WHY.

The single greatest challenge any organization will face is…success.

Without a clear WHY, bonuses, promotions, and fear, become the only way to hold on to talent.

WHY must be extracted and integrated into the culture of the company early on.

A strong succession plan should aim to find a leader inspired by the founding cause and ready to lead it into the next generation.

The only succession plan that will work is to find a CEO who believes in and wants to continue to lead that movement, not replace it with their own vision of the future.

One of the reasons Southwest Airlines has been so good at succession is because its cause is so ingrained in its culture. Kelleher stopped his day-to-day involvement in the company, but left a corporate culture so strong that his presence in the hallways was no longer needed.

Costco, founded in 1983 by Jim Sinegal and Jeffrey Brotman, believes in looking after its employees first. Costco continues to be a company that is better at serving the club member and employee than the shareholder.

Profits are never the WHY of a great organization, but they are, often, inevitable through the pursuit of a WHY that people can connect with.

PART 6: DISCOVER WHY

CH 13: THE ORIGINS OF A WHY

Finding WHY is a process of discovery, not invention.

WHY is born out of the upbringing and life experience of the founders.

CH 14: THE NEW COMPETITION

All organizations start with WHY, but only the great ones keep their WHY clear year after year.

What if the next time when someone asks, “Who’s your competition?” we replied, “No idea.”

Find customers who believe what you believe and work together so that you can all succeed.

All leaders must have two things: they must have a vision of the world that does not exist and they must have the ability to communicate it.

Eight Principles of Successful Rainwater Harvesting

1. Begin with long and thoughtful observation.
2. Start at the top of your watershed and work your way down.
3. Start and simple. 
4. Slow, spread, and infiltrate the flow of water.
5. Always plan an overflow route, and manage that overflow as a resource.
6. Create a living space.
7. Do more than just harvest water.
8. Continually reassess your system. 

Berm and Basin (aka swale)

• Use on land sloped up to 18 degrees.
• Use native perennial vegetation.
• Variations: contour berm, boomerang berm, net and pan 

Terrace

• Used on steep land.
• With or without retaining wall.

French Drain

• Directs stormwater quickly into subsoil.
• Only with sediment-free water, directly off roof, etc.

Infiltration Basin

• Collect rainwater for trees and vegetation.
• Plan for peak overflow.
• Sunken garden beds.

Imprinting

• Create micro-climates for seed germination and growth.
• Use mechanical imprinter for more than 1 acre.

Mulch

• Benefits: increase rainwater infiltration, improve soil fertility, reduce evaporative loss, limit soil erosion, suppress weed growth.
• Variations: vertical mulch.

Permeable Paving

• Replace large areas of concrete with permeable pavers, gravel, etc.
• Increases infiltration and reduces rainwater runoff and erosion.

Diversion Swale

• Swale built slightly off-contour.
• Gradually diverts rainwater away.
• Slows, diverts, and promotes infiltration.
• Variation: spreader drain

Check Dam

• Slows, spreads, and infiltrates ephemeral watercourses during heavy rain.
• Use on eroding arroyos, gullies, below culverts, near roads/paths. 
• Variations: loose rock check dams, wire-encased rock gabions, brush check dam, one rock check dam.

Vegetation

• Critical component of all earthworks.
• Plant in or beside all earthworks, always. 

• 1162 Genghis Khan was born into the Borjigin tribe under the name Temujin. His childhood was poor and his family struggled to survive. Temujin, however, thrived and made many political alliances among other Mongol tribes.
• 1177 Temujin was captured by a rival tribe and imprisoned. With the help of a guard, he escaped by hiding in a river crevice.
• 1178 At around the age of 16, Temujin married Borte who became his empress.
• 1178-1206 Temujin makes allies and works to unite the disparate Mongol tribes under his rule. Mongolian tribes had never united before. The various Chinese dynasties usually schemed to keep them divided and fighting each other.
• 1206 Mongol and Turkic tribes united under Temujin, proclaiming him Genghis Khan, the Oceanic or Universal Ruler of all the Mongols.
• 1207-1210 Mongol wars against the western Xia which ruled northwest China and parts of Tibet. The Xia surrended to Genghis in 1210.
• 1209 The Uyghur Turks joined Genghis peacefully and many of them became administrators of the new and growing empire.
• 1211 Genghis and his army cross the Gobi Desert to battle the Jin Dynasty in northern China.
• 1215 The Mongol army conquers Zhongdu, the Jin Dynasty capital.
• 1218 Genghis sends an envoy to the Khwarezmid empire under Shah Muhammad. The Shah has all the envoys put to death.
• 1219 Genghis and his army go to war against the Khwarezmid Empire. He sent special troops to find and kill Shah Ala al-Din Muhammad II, the shah who murdered Genghis’ envoys. The Mongol army split its forces in order to attack from many directions at once.
• 1219 Mongols begin a campaign against Transoxiana, comprising parts of Uzbekistan, Tajikistan, Kyrgyzstan and Kazakhstan.
• 1221 Khwarezmid Empire destroyed.
• 1223 While Genghis led the main Mongol army through Afghanistan back to Mongolia, a Mongol army division of 20,000 under the generals Jebe and Subutai headed over the Caucasus. They attacked the kingdom of Georgia and won. They spent the winter on the Black Sea. On the way back to Mongolia, the generals attacked and won over an 80,000 strong army of the Kievan Rus at the Battle of the Kalka River. They then headed back to Mongolia.
• 1227 Genghis and his army went on campaign against the rebellious Tangut, Xia and Jin, capturing the city of Lingzhou and putting its leaders to death. In August, still on campaign, Genghis Khan died. He was 65 years old, a ripe old age for a military commander who spent his life at war.
• 1227 Mongol leaders all return to Mongolia for a mass meeting, the kuriltai, where the next khan would be elected. Before his death, Genghis had already chosen his son Ogedai as his successor. His other sons, Jochi, Chagatai and Tolui would be khans with Ogedai as the Great Khan.
• 1229 Ogedai elected Great Khan. At this point, the Mongol Empire comprised almost 24 million square kilometers, four times as large as the Roman Empire.
• 1229-1234 Under Ogedai, the war in northern China continues with sieges at Kaifeng and Caizhou against the Jin dynasty. Fire arrows or missiles were launched against the Mongols by the Jin.
• 1235-1238 Ogedai constructs a Mongol capital city at Karakhorum.
• 1236 Mongols invade Korea and begin a war against the southern Chinese Song dynasty.
• 1237 Batu Khan, a son of Jochi, Genghis’ first son, begins campaign to conquer the Kievan Rus.
• 1237-1242 Mongols sack Kiev, invade Armenia, Georgia, Hungary and Bulgaria.
• 1241 Battles of Sajo and Legnica, with Mongols crushing all enemies.
• 1241 Ogedai dies.
• 1241-1246 Odegai’s wife, Toregene, becomes regent. Toregene works in the background to get Ogedai’s eldest son, Guyuk, elected as Great Khan.
• 1246 Guyuk elected Great Khan.
• 1247 First census of the empire.
• 1248 Guyuk dies.
• 1251 Mongke, eldest son of Tolui, Genghis’ fourth son, elected Great Khan. Some of his relatives rebel and Mongke kills all who would challenge him from the Ogedied and Chagataid families. Mongke sends his brothers Hulagu to war in the Middle East and Kublai to war in China. His other brother, Ariq Boke remains in Karakhorum.
• 1256 Hulagu attacks the Hashshashins, an order of assassins, establishes the Ilkhanate.
• 1257 Mongols invade Vietnam.
• 1258 The Abbasid Caliphate falls to the Mongols, who capture Baghdad.
• 1259 Mongols invade Syria. Mongke dies.
• 1260 Mongols defeated by Egyptian Mamluks in the battles of Ain Jalut and Homs.
• 1260 Both Ariq Boke and Kublai, grandsons of Genghis Khan, declared Great Khans. Civil war between the two breaks out.
• 1262 Golden Horde (Russia) and Ilkhanate (Iraq) go to war in Caucasus.
• 1264 Kublai becomes the Great Khan.
• 1269 Mongolian language school founded by Kublai Khan.
• 1271 Yuan Dynasty established and paper money issued by Kublai Khan.
• 1274 Japan invaded by Mongols for the first time.
• 1276 Song Dynasty (southern China) falls to Yuan Dynasty.
• 1281 Mongol’s second invasion of Japan.
• 1281 In Western Syria, Mongols again defeated by Eqyptian Mamluks.
• 1284 Second invasion of Vietnam fails.
• 1288 Third invasion of Vietnam fails.
• 1293 Mongols raid Java.
• 1294 Kublai Khan dies. Oljeitu Temur, Kublai’s grandson, becomes khan of the Yuan Dynasty.
• 1295 Ghazan, ruler of the Ilkhanate, converts to Islam.
• 1299 Mongols win over the Mamluks in Syria.
• 1303 Mamluks defeat Mongols at Battle of Marj al-Saffar, Mongols leave Syria.
• 1305 The Yam postal routes and trade routes reopened between the Khanates, which had been closed when the Khanates warred with each other.
• 1315 Golden Horde turns to Islam. Ozbeg Khan persecutes non-Muslim Tartars.
• 1323 Mamluks make a truce with the Ilkhanate, ending a long war.
• 1327 Rebellion in Golden Horde against Mongol rule. Ozbeg crushes the rebellion.
• 1335 Ilkhanate dissolves.
• 1368 Ming Dynasty overthrows the Mongol Yuan Dynasty. End of Mongol Empire, although elements of it continues to the 1600s.

Source: https://www.historyonthenet.com/mongol-empire-timeline

The Big Idea: Pay attention to the timing of events, decisions, and actions.

PART ONE: THE DAY

CH 1. THE HIDDEN PATTERN OF EVERYDAY LIFE

• According to studies of Twitter, mood increases in the morning until about 11am, plummets after lunch, and then increases again in the evening.
• Quarterly earnings calls in the morning tend to be more upbeat and positive than in the afternoon.
• People are sharper and more vigilant earlier in the morning.
• Verdicts rendered later in the day are more likely to be guilty.
• Analytical tasks are best performed in the morning.
• Students scored higher in the mornings than in the afternoons.
• Having math in the first two periods of the school day instead of the last two periods increases the math GPA of students.
• Innovation and creativity require less vigilance and fewer inhibitions and are optimal later in the day.
• Some of us are night owls; others of us are morning larks. Most people are somewhere in the middle.
• For Benjamin Franklin, early to bed and early to rise makes a person healthy, wealthy, and wise.
• Figure out your type, understand your task, and then select the appropriate time.

CH 2. AFTERNOONS AND COFFEE SPOONS

• Afternoons are the Bermuda Triangles of our days.
• Adverse events in medicine were significantly more frequent for cases starting during the 3pm and 4pm hours.
• The typical worker reaches the most unproductive moment of the day at 2:55pm.
• Vigilance breaks can loosen the trough’s grip on our behavior.
• A laminated checklist card can also increase afternoon vigilance.
• If there were a break after every hour, test scores would actually improve over the course of the day.
• Short breaks from a task can prevent habituation, help us maintain focus, and reactivate our commitment to a goal.
• Moving breaks beat stationary breaks.
• Social breaks beat solo breaks.
• Outdoor breaks beat indoor breaks.
• Fully detached breaks beat semidetached breaks (no email.)
• Lunch breaks have two key ingredients — autonomy and detachment.
• Naps can be a shrewd response to the trough and a valuable break. The ideal naps are between ten and twenty minutes. Drink coffee before you nap.
• Meditation is one of the most effective breaks of all.
• Most expert musicians and athletes begin practicing in earnest around nine o’clock in the morning, hit their peak during the late morning, break in the afternoon, and then practice for a few more hours in the evening.

PART TWO. BEGINNINGS, ENDINGS, AND IN BETWEEN

CH 3. BEGINNINGS

• Beginnings have an outsized effect on success.
• For teenagers, beginning the school day before 8:30 am can impair their health and hobble their grades.
• Beginning a career in a weak economy can restrict opportunities and reduce earning power well into adulthood.
• Thinking slow (Daniel Kahneman) is more likely during a fresh start. Fresh starts tend to happen on Jan 1, 1st day of each month, and on Mondays.
• Avoid a false start with a premortem. Assume it’s eighteen months from now and our project is a complete disaster. Ask yourself “What went wrong?”
• If you’re interviewing for a job and you’re up against several strong candidates, you might gain an edge from being first.
• If you are the default choice, don’t go first.
• If there are many weak competitors, don’t go first.
• If you’re operating in an uncertain environment, don’t go first.
• When should you get married? Wait until you’re old enough, but not too old. Wait until you’ve completed your education. Wait until your relationship matures .

CH 4. MIDPOINTS

• Midpoints can bring us down. That’s the slump. But they can also fire us up. That’s the spark.
• At midpoints we tend to cut corners.
• Success doesn’t usually progress steadily. At the midpoint of a project, members feel a sense of urgency and pick up the pace.
• Teams that were behind by just one point at half were more likely to win than teams ahead by one point.
• First, be aware of midpoints. Don’t let them remain invisible. Second, use them to wake up rather than roll over. Third, at the midpoint, imagine that you’re behind — but only by a little.
• Set interim goals. Publicly commit to those interim goals.
• Organize your next project with the form-storm-perform method.
• Phase 1: Form and Storm. When teams first come together, develop a shared vision, establish group values, and generate ideas.
• Phase 2: The Midpoint. Use the midpoint to set direction and accelerate the pace.
• Phase 3: Perform. Work together with minimal friction.

CH 5. ENDINGS

• First-time marathon participation declines in the early 40s but spikes dramatically at age 49.
• When we near the end, we kick a little harder. Set a hard deadline (except for creative tasks.)
• The James Dean Effect: a life that is short but intensely exciting is seen as most positive than a long, pleasant life that declines towards the end.
• Peak-end rule: we remember an event based on it most intense moment (peak) and how it culminates (end.)
• A shorter colonoscopy in which the final moments are painful is remembered as being worse than a longer colonoscopy that happens to end less unpleasantly.
• Give bad news first, good news last.
• Participants who knew they were eating the final chocolate of a taste test enjoyed it more.
• In the end, we seek meaning. Meaningful endings mix happiness and sadness into poignancy, which delivers significance. Eg. Pixar endings.
• Last lines can elevate and encode — by encapsulating a theme, resolving a question, leaving the story lingering in the reader’s head.
• Jobs that are demanding but don’t offer autonomy burn us out. Jobs that offer autonomy but little challenge bore us.
• If your boss has your back, takes responsibility instead of blaming others, encourages your efforts but also gets out of your way, and displays a sense of humor rather than a raging temper, you’re probably in a good place.
• The high season for divorce attorneys is January and February, when the holidays are over and people can finally stop pretending to be happy. The same thing happens at the end of the school year.
• Reserve the final five minutes of work for a few small deliberate actions that bring the day to a fulfilling close. End the day by recording what you’ve achieved can encode the entire day more positively.
• Gratitude is a powerful restorative.
• At the end of the year, have seniors write a letter to themselves — mailed to them five years later.
• Take students to a small restaurant where they offer toasts to one another.
• How a vacation ends shapes the stories we later tell about the experience.

PART THREE. SYNCHING AND THINKING

CH 6. SYNCHING FAST AND SLOW

• Each day dabbawalas deliver more than 200,000 lunches to workers in Mumbai.
• There are three principles of group timing. An external standard sets the pace. A sense of belonging helps individuals cohere. And synchronization both requires and heightens well-being.
• Group timing requires a boss. Groups generally attune to the pacing preferences of their highest-status members.
• For the dabbawalas, the railway schedule is the boss.
• The belongingness hypothesis is that a need to belong is a fundamental human motivation.
• For group coordination, it comes in three forms: codes, garb, and touch.
• Profit-sharing model pays each dabbawala in equal shares.
• Clothing operates as a marker of affiliation and identification and enables coordination.
• Feeling good promotes social cohesion, which makes it easier to synchronize. Synchronizing with others feels good, which deepens attachment and improves synchronization further still.
• Tell stories of struggle, failure and vulnerability to foster a sense of belongingness.
• Nurture self-organized group rituals, which help fuse identity and deepen belongingness.

CH 7. THINKING IN TENSES; A FEW FINAL WORDS

• Understand the natural waves of the day.
• Lunch breaks, naps, and walks are not luxuries. They are necessities.
• Don’t just push through bad starts. Start again or start together.
• Midpoints matter. Leverage them.
• Understand the power of endings. Don’t just make them positive. Make them poignancy and meaning.

The Big Idea: The most consistently successful people invest their energy into building a set of good habits.

• People who consistently seem to excel share one key thing: they are better at building and sustaining new habits.
• Those who build habits are like people who live below their means, slowly building up an impressive balance in their bank account.
• If you never build habits you must always rely on available willpower to do anything.
• Invest your precious willpower in building good habits, which become easier and easier over time.
• Consistency Is everything. It’s better to maintain a modest life-long habit than to start an extreme habit that can’t be sustained for a single year.
• Absolutely never skip a habit twice. Missing two days of a habit is habit suicide.
• Focus on the process and consistency, not on the results. Create a good plan and then stick to the plan. 
• The right habit to tackle is one that you care about.
• Sometimes building small habits can build momentum that gives people the strength and motivation to tackle the larger ones.
• Successful people had a set of habits that led them to the top of their fields. They systematically rewire their habits to orient themselves for success.
• You can do just about anything if you break it down into habits and execute on them.
• If you are not going to follow through with a habit, it is better to never start it at all.
• When creating a new habit, start small, become consistent, and increase the intensity at a manageable pace.
• Daily habits are magical. It’s easier to be consistent, if you say that you’re going to do something every single day.
• Don’t waste energy building a habit that can be somehow automated instead.  Automation > habits.
• For habits that are very long term or very difficult, you can ask a friend to help you be accountable.
• How to develop good eating habits? The best strategy is to plan every one of your meals in advance.
• How to develop healthy sleep habits? Create a schedule where you can sleep as long as you want to and wake up without an alarm clock. Buy a sleep mask, buy ear plugs, avoid blue light and sleep at around 65 degrees.
• Other good habits to develop: daily exercise, staying on top of email, having an organized calendar, being punctual, culling your contact list, and journaling.