The Big Idea: In the end, relationships are all that matters.

• Balance when establishing your career, in my view, is largely a myth. However, you can still experience a lot of reward while working hard on the way to success.
• The most important decision you’ll make is not where you work or who you party with, but who you choose to partner with for the rest of your life.
• Get to a place that’s crowded with success.
• Money can buy happiness, to a point. But once you reach a certain level of economic security, the correlation flattens.
• Invest in relationships. The payoff, small at first, is immense much later.
• The definition of “rich” is having passive income greater than your living expenses. Keep your living expenses low and you can be rich quickly.
• Consumption of alcohol predicts unhappiness better than any other factor.
• Invest in experiences over things. Drive a Hyundai and take your wife to St. Barts.
• Providing comfort for someone you love at the end of their life is deeply satisfying.
• The happiest people are those in monogamous relationships who have children.
• Everyone experiences failure and tragedy. The key to success is the ability to mourn and then move on.
• Talent alone won’t get you within spitting distance of 0.1 percent. Hard work is more important.
• Passion is overrated. Find something you’re good at and passion will follow.
• It takes much less money than you think to be a great dad. Don’t let your ego mislead you.
• Boring is more profitable. I try to avoid investing in anything that sounds remotely cool.
• Help take care of your parents. Start now.
• Show up early. Have good manners. Follow up.
• If you’re good at working at a big firm, then you are likely better off doing just that — and not struggling against the long odds facing a small firm.
• Entrepreneurship is a sales job with negative commissions until you raise capital, are profitable, or go out of business.
• You don’t need a Nobel to see the similarities between 1999 and 2019.
• Recessions are great times to launch a company. People, real estate, and services are all much less expensive.
• Boom times are better times to develop your career at a big firm, when others are leaving to get rich during the boom times.
• If you’re an entrepreneur or find yourself sitting on assets that represent a large portion of your wealth, I’m comfortable saying that while a bull market may not be the best time to sell, it’s most certainly not a bad time to sell.
• I’m 80 percent in cash in 2019, which most reasonable financial managers will tell you is stupid.
• Your gains and losses in the market are never as good or bad as they seem.
• Take care of your credit score.
• I’ve started nine companies: three were wins, four were failures, and two were somewhere in between. Only in America.
• Reach out to friends on a regular basis.
• Professional success is the means, not the end. The end is economic security for your family and, more important, meaningful relationships with family and friends.
• My willingness to endure rejection from universities, peers, investors, and women has been hugely rewarding.
• Love and relationships are the ends — everything else is just the means.
• The key decision you’ll make in life is who you have kids with.
• There is one shortcut to happiness: finding someone who chooses you over everything.
• Here is the advice on marriage I offer: Don’t keep score. Don’t ever let your wife be cold or hungry. Express affection and desire as often as possible.
• Nobody has an algorithm for successful parenting.
• Exercise is the only real youth serum .
• Marketers hate old people. Old people spend their time and money on things that matter, like healthcare, loved ones, and college funds for their grandkids instead of vintage sneakers, iPhones, and Keurig pods.
• A house isn’t a much better investment than any other asset class.
• A better proxy for your life isn’t your first home, but your last. Where you draw your last breath is more meaningful.
• Where you die, and who is around you at the end, is a strong signal of your success or failure in life.
• I believe parents want two things: 1. To know their family loves them immensely. 2. To recognize that their love and parenting gave their children the skills and confidence to add value and live rewarding lives.
• I don’t think we go to an afterworld, but I do believe we can get to heaven while still here on Earth.
• We are hunter-gatherers and are happiest when in motion and surrounded by others.
• My life is easy compared to the billions of people who have trouble putting food on the table or who struggle with illness.
• How can you live to be one hundred? Have good genetics, live a healthy lifestyle, and love others.
• The successful are often rude and greedy. The super-successful people I know are usually nicer, more generous, and generally better mannered.
• Gratitude is consistently correlated with greater happiness.
• Nobody ever says at a funeral, “He was too generous, too kind, and much too loving.”

The Big Idea: Talent is overrated. Mastery is developed through many years of deliberate practice. Child prodigies are no exception, they just start early and practice more.

Examples mentioned: Wayne Gretzky, Mozart, Tiger Woods, David Beckham, Brazilian futsal, Polgar chess sisters, Enron collapse, growth mind-set, placebo effect,

The Big Idea: word of mouth relies on six principles: social currency, triggers, emotion, public, practical values, and stories.

• Word of mouth is the primary factor behind 20-50 percent of all purchasing decisions.
• Word of mouth is more effective than advertising because it is more persuasive and more targeted.
• As widespread as social media is, only 7% of word of mouth happens online.
• Malcolm Gladwell argues that social epidemics are driven mavens/connectors, but science says that word of mouth happens because shareable messages exhibit certain traits that make them contagious.

SIX PRINCIPLES OF CONTAGIOUSNESS

Principle 1: Social Currency

• Knowing about cool things (like a blender that can tear through an iPhone) makes people seem sharp and in the know.
• Leverage game mechanics to give people ways to achieve and provide visible symbols of status that they can show to others.
• Examples mentioned: Will It Blend, Snapple Caps, The Blair Witch Project, Foursquare, Rue La La, Disney Vault, McRib, Please Don’t Tell bar.

Principle 2: Triggers

• Prompt people to think about related things.
• Design products and ideas that are frequently triggered by the environment and create new triggers by linking our products and ideas to prevalent cues in that environment.
• Examples mentioned: Cheerios, BzzAgent, Mars Bar, voting in schools, Kit-Kat and coffee, Budweiser’s Wazzup, hot dogs and July 4th, Weekends are made for Michelob, Friday song.

Principle 3: Emotion

• Craft messages and ideas that make people feel something.
• Emotional things often get shared.
• Examples mentioned: The Mysterious Cough, Susan Boyle, Google’s “Parisian Love”.

Principle 4: Public

• Make products and ideas more public.
• Design products and initiatives that advertise themselves.
• Examples: Macbook’s upside down logo, rejected kidney donations, No Shave November, Sent from my iPhone, Livestrong, I Voted stickers, Tiffany and Victoria’s Secret shopping bags,

Principle 5: Practical Value

• People like to help one another.
• Highlight the incredible value of what we offer — monetarily and otherwise.
• Increase value using principles of behavioral economics: smart pricing, limited availability, Rule of 100.
• Examples mentioned: Ken Craig’s Clean Ears Everytime, Vanguard Funds

Principle 6: Stories

• People don’t just share information, they tell stories.
• Make your message so integral to the narrative.
• Examples mentioned: Trojan Horse, The Three Little Pigs, Jared Fogle and Subway, Barclay Prime’s $100 cheesesteak, Egyptian dairy company Panda, Vietnamese nail salons.

“IS IT CONTAGIOUS?” CHECKLIST

1. Social Currency: Does talking about your product or idea make people look good? Can you find the inner remarkability? Leverage game mechanics? Make people feel like insiders?
2. Triggers: Consider the context. What cues make people think about your product or idea? How can you grow the habitat and make it come to mind more often?
3. Emotion: Focus on feelings. Does talking about your product or idea generate emotion? How can you kindle the fire?
4. Public: Does your product or idea advertise itself? Can people see when others are using it? If not, how can you make the private public? Can you create behavioral residue that sticks around even after people use it?
5. Practical Value: Does talking about your product or idea help people help others? How can you highlight incredible value, packaging your knowledge and expertise into useful information others will want to disseminate?
6. Stories: What is your Trojan Horse? Is your product or idea embedded in a broader narrative that people want to share? Is the story not only viral, but also valuable?

The Big Idea: The Governator tells his unbelievable life story while making the rest of us feel like losers.

• Turn your liabilities into assets.
• When someone tells you no, you should hear yes.
• Never follow the crowd. Go where it’s empty.
• No matter what you do in life, selling is part of it.
• Never let pride get in your way.
• Don’t overthink.
• Forget plan B.
• You can use outrageous humor to settle a score.
• The day has twenty-four hours.
• Reps, reps, reps.
• Don’t blame your parents.
• Change takes big balls.
• Take care of your body and your mind.
• Stay hungry.

The Big Idea: Most chronic disease is preventable, and much of it is reversible, if a comprehensive, individualized approach, called “Functional Medicine,” is followed.

Ch 1: Leo’s Story

Most doctors, and by extension patients and the public, have no idea that mental and behavioral disorders can have physiological causes.

Ch 2: From Band-Aids to True Healing

Book: Nourishing Traditions by Sally Fallon

Ch 3: If Not Now, When? If Not You, Who?

Ch 4: Chronic Disease, A Slow-Motion Plague

Our lifespans have increased.

The projected decrease in life expectancy has been attributed mostly to the explosion of chronic diseases like obesity and diabetes in children.

As recently as the 1950s and 1960s, obesity was rare.

One in two Americans now has a chronic disease, and one in four has multiple chronic diseases.

The U.S. spends $3.2 trillion a year on healthcare. This is equivalent to 18% of our GDP.

50 million Americans (one in six) have an autoimmune disease.

Alzheimer’s is now the sixth leading cause of death in the U.S.

One in 45 children now has autism spectrum disorder.

Ch 5: Three Reasons U.S. Healthcare Is Destined to Fail

There’s little motivation for insurance companies to embrace treatments that would ultimately shrink spending on health care.

Pharmaceutical company’s work and products may be more focused on making money.

Two-thirds of medical research is sponsored by pharmaceutical companies.

This is not evidence-based medicine, it’s reimbursement-based medicine.

There are three much deeper reasons that healthcare in the U.S. is doomed to fail:

1. Our modern diet and lifestyle are out of alignment with our genes and biology.
2. Our medical paradigm is not well-suited to tackle chronic disease.
3. Our model for delivering care doesn’t support the interventions that would have the biggest impact on preventing and reversing chronic disease.

Human beings lived most of our history eating a hunter-gatherer diet and living a hunter-gatherer lifestyle.

Our ancestors walked an average of 10,000 steps a day.

Conventional medicine is structured to address trauma, acute infection, and end-of-life care, not to keep people healthy.

Seven of the top ten causes of death are chronic diseases.

Unlike acute problems, chronic diseases are difficult to manage, expensive to treat, and usually last a lifetime.

Another reason that conventional medicine hasn’t been successful is that it focuses on suppressing symptoms rather than addressing the underlying cause of disease.

“The wise physician treats disease before it occurs,” according to the Traditional Medicine proverb.

The average visit with a PCP in the U.S. lasts for just ten to twelve minutes.

Patients get to speak for only twelve seconds on average before being interrupted with advice from their physician.

Ch 6: The Toll, How Conventional Medicine Affects Healthcare Providers

Both doctors and patients feel dissatisfied with how little time gets spent on doctor-patient visits.

After inflation, primary care doctors earn somewhat less today than they did in 1970.

Almost half of physicians are thinking of quitting medicine, cutting back hours, switching to concierge medicine, or taking other steps to limit patient access.

Ch 7: A New Model, The ADAPT Framework

It’s not normal for human beings to develop chronic disease.

A Functional Medicine approach is focused on preventing and reversing, rather than simply managing, chronic disease.

An ancestral diet and lifestyle reflects the recognition that we are evolutionarily mismatched to our environment and that this mismatch is the primary driver of chronic disease.

The ancestral diet and lifestyle — though extremely effective in most cases — was often not enough to completely reverse the patient’s health problems and restore optimal function. So Functional Medicine offers a more comprehensive toolset.

Ch 8: The Paradigm Shift, Functional Medicine as True Healthcare

Conventional medicine is mostly about trying to bail water out of the boat without fixing the leaks.

Functional Medicine seeks to get to the bottom of things. It looks for the underlying cause of disease.

At the core of the model is the relationship between the Exposome, our genes themselves, and the way our genes express themselves over time.

Pathologies are the underlying mechanisms that give rise to diseases and syndromes.

A disease is more clearly defined and characterized than a syndrome because it has specific signs and symptoms and the causes are more clearly defined and understood.

A sign is an objective indication of a disease or syndrome that can be observed during a physical examination or through laboratory testing.

Symptoms are the subjective experiences that the patient might report to the clinician.

After analyzing the Exposome layer, we examine pathology.

Conventional medicine is well-suited for dealing with acute, infectious disease, trauma, and injuries. However, it falters in addressing chronic disease, which is the biggest health problem we face today.

Within conventional medicine, pharmaceuticals are the primary treatment for almost 90 percent of all chronic conditions.

Conventional medicine is not truly healthcare — it’s disease management.

Functional Medicine, on the other hand, is designed to promote health.

A patient’s behavior is one of the biggest, if not the biggest, contributors to chronic disease.

Conventional medicine views the body as a collection of separate parts.

Specialists infrequently consult with each other or acknowledge the important connections between the body’s various parts.

Functional Medicine is often much more affordable than conventional medicine, largely because it seeks to prevent and reverse disease, rather than just manage it.

Although the upfront cost may be higher, Functional Medicine would save an enormous amount of money over this patient’s lifetime, because it would prevent diabetes before it occurred in the first place.

Conventional medicine tends to be more allopathic in its approach, and relies almost exclusively on drugs and surgery. Although most doctors acknowledge the importance of diet and lifestyle, the model isn’t structured to support patient change in those areas.

Drugs and surgery can cause serious side effects and complications, including death.

Medical care is the third leading cause of death in this country.

Cleveland Clinic was the first major organization to recognize the power of Functional Medicine. They tapped Dr. Mark Hyman to create a Center for Functional Medicine within Cleveland Clinic.

Dr. Bredesen addresses dementia and Alzheimer’s disease from a holistic—functional—perspective. When a patient comes to see him, he doesn’t simply administer memory tests. He investigates the patient’s gut function. He measures their blood sugar. He examines their diet and their nutrient status. He considers heavy metal toxicity, mold, and biotoxins. He analyzes methylation. He looks at detoxification.

Dr. Terry Wahls was diagnosed with multiple sclerosis. She wrote The Wahls Protocol: A Radical New Way to Treat All Chronic Autoimmune Conditions Using Paleo Principles.

In Functional Medicine, we start by asking why the couple is having trouble getting pregnant. The possibilities include nutrient deficiency, thyroid problems, sex hormone imbalance, inflammation, insulin resistance and blood.

We almost always start with the foundational layer — diet, lifestyle, and environment. That’s especially true for chronic illnesses.

Ch 9: Realignment, Matching Our Environment With Our Genes

Humans evolved in a vastly different environment than the one we’re living in now.

Our genes are hard-wired for the twenty-four-hour light-dark cycle.

Modern diseases that countless people suffer from today, like heart disease, diabetes, and many autoimmune diseases, are nearly nonexistent in hunter-gatherer populations.

When hunter-gatherer cultures have access to even the most rudimentary form of emergency medical care, like a clinic half-a-day’s hike away, they live lifespans that are roughly equivalent to our own, particularly if they’re living in a relatively secure, peaceful environment.

Epigenetics is probably much more important than the genes themselves, in terms of determining our susceptibility to chronic disease.

For 77,000 generations, the human diet consisted primarily of meat and fish, some wild fruits and vegetables, nuts and seeds, and some starchy plants.

Ancestral populations generally got at least seven to eight hours of sleep a night.

Hunter-gather societies walked an average of 10,000 steps a day.

Ancestral humans lived in close-knit tribal and social groups, with multiple generations.

Ancestral humans generally “worked” about three to four hours a day.

Chronic inflammation is insidious; it often affects multiple tissues. If someone is eating an inflammatory diet and living an inflammatory lifestyle, that could cause a wide range of symptoms.

Ch 10: The 21st Century Practice, A Collaborative Model

The conventional system is buckling under the weight of misaligned incentives, broken payment models, inefficiency and bureaucracy, and a paradigm that is not well-suited to address chronic disease.

Many clinicians are choosing to move to a cash-only or a cash-plus-insurance practice.

Insurers are beginning to recognize the value of telemedicine; video conferencing is now reimbursed in many states, and others are moving in that direction.

One area of dissatisfaction and pushback among doctors is with electronic health records (EHRs). Initially, there was a lot of enthusiasm for EHRs, but the way they’ve been implemented in conventional medical settings has been horrific.

Ch 11: Regarding Evidence

Two-thirds of medical research is funded by pharmaceutical companies.

Abilify, for example, is one of the best-selling drugs in the United States. It was originally developed as an anti-psychotic, and is approved for schizophrenia, bipolar disorder, depression, and autism spectrum disorders.

The humility to admit when we’ve been wrong is essential to good science. Unfortunately, in the conventional medical paradigm, this willingness and humility have often been replaced by groupthink, arrogance, and a stubborn attachment to the status quo.

What does the research say about Functional Medicine?

The gold standard of conventional research — the randomized clinical trial — isolates just one variable, then tests the effect of that variable; all other elements of the study are kept the same. The randomized clinical trial is practically the antithesis of the philosophy of Functional Medicine, which seeks to tailor layered treatment plans to individual patients.

Attending conferences and continuing education classes can help doctors stay current, but those conferences are often sponsored by a drug company.

Unfortunately, much of the research we’ve formerly relied upon was never replicated.

The latest research often takes time to reach practicing clinicians—and their patients.

Ch 12: ADAPT in Practice, Four Common Conditions

Most commonly prescribed drugs are just palliative — in other words, they offer some relief for symptoms but don’t address the underlying cause.

In a conventional model, the doctor would simply issue his or her recommendations: “Okay, eat better. Exercise more. Do this protocol.” The patient would walk away and then likely struggle or fail to follow through.

Patients need to recognize that the system is set up to support and subsidize drugs.

Ch 13: ADAPT in Practice, The Practitioner’s Experience

Ch 14: ADAPT in Practice, The Patient’s Experience

Although Functional Medicine will almost certainly prove more cost-effective than conventional medicine over time, right now out-of-pocket expenses are higher for Functional Medicine because of the lack of insurance coverage.

It’s worth noting that conventional care can be enormously expensive for patients since it relies heavily on medications, surgery, and other expensive procedures. Insurance provides some relief but doesn’t always cover these expenses — and when that happens the results can be disastrous. One in five Americans struggle to pay medical bills each year. Three in five bankruptcies are due to medical expenses.

Ch 15. The Future of Medicine

The factors that most predict your health are your wealth, education, and lifestyle — not your access to healthcare.

Today, we spend 86 percent of our healthcare dollars on treating chronic disease but just three percent on public health measures.

The launch of Cleveland Clinic Center for Functional Medicine has served to open many people’s eyes to the potential of this model.

Dr. Mark Hyman, the clinic director, travels all over the world to educate people about Functional Medicine.

Ch 16: Next Steps: Three Things to Do Now

Ch 17: Resources for Practitioners & Patients

Institute for Functional Medicine (IFM)

Kalish Institute

RobbWolf.com

DrHyman.com

SaraGottfried.com

Paleo f(x)

Revolution Health Radio

The End of Alzheimer’s: The First Program to Prevent and Reverse Cognitive Decline

The Wahls Protocol: A Radical New Way to Treat All Chronic Autoimmune Conditions Using Paleo Principles

Brain Maker: The Power of Gut Microbes to Heal and Protect Your Brain — for Life

The Big Idea: Show your employees love and they will show your customers love.

Foreward

• Most people are looking not only for monetary security but also for satisfaction in their work.
• Southwest’s People have produced an unprecedented and unparalleled record of job security, Customer satisfaction, and Shareholder return.

What Is Leadership?

• LUV is our symbol on the New York Stock Exchange.
• “Southwest Airlines, the Someone Else Up There Who LUVs You.”
• We had a heart on our first signature.
• You can’t manage a horse to water.
• We want all our People to realize they have the potential to be a Leader.
• We try to hire Leaders.
• All of us can be Leaders, both at work and in our homes and communities.
• When I think about who influenced my life the most as a Leader, I think of my Mother.

Celebrating Successes

• We send out thousands of letters every year to our People, celebrating their successes and praising them for their efforts.
• The Executive Office keeps track of every Employee’s birthday, company anniversary, the birth of children, and other important events.
• We send out 100,000 cards annually.
• We just believe in accentuating the positive and celebrating People’s successes.
• To sustain our Company Culture, we cheer People on all the time.
• We celebrate everything!
• Giving People chocolates when something good has happened can make them feel like you’ve given them a million dollars.
• You are letting them know that you love them for their efforts and you want everybody to celebrate their success.
• The key to developing people and creating great organizations is to catch people doing things right and accentuate the positive by praising them.
• Celebrating successes has been a key part of my own leadership for a long time.
• Don’t praise your People just for showing up; celebrate specific things they have done.
• Read The One Minute Manager to learn more.
• People hate waiting until their annual performance review to get all the good news or bad news.
• “Tough Love” still matters. I had to let a personal staff member go. If she couldn’t find a way to recapture her once-positive attitude and make it work, she needed to leave.
• Don’t let poor behavior or performance go unnoticed.
• I prefer praising and celebrating successes to dealing with problems.

Having Mentors

• As long as you were respectful of others and treated people the way you would like to be treated, you would get that back in kind.
• My biggest expectation with our People is that they be egalitarian in nature.
• Everyone has an equal opportunity to contribute to the overall success and well-being of the Company.
• Our mission at Southwest is “dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.”
• Lead with your heart.
• Herb is really brilliant and incredibly visionary. He would see the vision but he wouldn’t have any idea how many steps you had to take to get there; he would just want it done. I was pragmatic and systematic and quite organized. So that’s how our team, or partnership, started.
• The first word that comes to mind is family.

Servant Leadership Is Love in Action

• Love isn’t a word that’s used too often in corporate America.
• It’s loving your mission, it’s loving your customers, it’s loving your people, and it’s loving yourself enough to get out of the way so other people can be magnificent.
• Nine times out of ten, if we say that we work at Southwest, people have a story about us, and it’s a good one.
• There are two kinds of leadership involved in Servant Leadership: strategic leadership and operational leadership.
• Strategic leadership has to do with vision / direction. It’s the leadership part of Servant Leadership.
• Leadership is about going somewhere — if you and your people don’t know where you are going, your leadership doesn’t matter.
• We’ve always tried to make sure everyone knows where we are heading. Then, of course, we had to make it all happen.
• Operational leadership is about: implementation — the “how” of the organization.
• It includes policies, procedures, systems, and leader behaviors.

The Triple Bottom Line

• Our entire philosophy of Leadership is quite simple: Treat your People right, and good things will happen.
• When we talk to our People, we proudly draw a pyramid on the chalkboard and tell them: You are at the top of the pyramid. You are the most important Person to us. You are our most important Customer in terms of priority.
• Therefore, I am going to spend 80 percent of my time treating People with Golden Rule behavior and trying to make sure that they have an enjoyable work environment where they feel good about what they do, about themselves, and about their position within this Company.
• But if I do that, what I want in exchange is for you to do the same thing by offering our Passengers — who are our second Customer in terms of priority — the same kind of warmth, caring, and fun spirit.
• If you do that consistently, our Passengers will recognize how significantly different this is from the behavior they witness at other businesses, and they will come back for more.
• If they come back often enough and become loyal Customers, they will tell stories about us to their friends. Then we’ll make money, which keeps your job secure and pleases our third Customer in terms of priority, which is our Shareholder — thus a win-win for all concerned.
• Three bottom lines: being the employer of choice, the provider of choice, and the investment of choice.
• Profit shouldn’t be the object of a company, but rather a result of good work.
• Just like a person can’t survive for long without food and water, a company can’t survive without profits — but no one would ever reduce the purpose and significance of human life to only eating and drinking.
• Servant Leaders know that financial success is a byproduct of how their people and their customers are treated.
• Profit is the applause you get for creating a motivating environment for your people and taking care of your customers.
• Today’s workers generally want more than pay. They seek opportunities where they feel that their contributions are valued and rewarded — where they are involved and empowered, can develop skills, can see advancement opportunities, and can believe they are making a difference.
• Combined voluntary and involuntary turnover has hovered around 5 percent for the past 25 years, and our voluntary turnover rate has always been 3 percent or less.
• The People of Southwest Airlines are the creators of what we have become.
• We give our thanks — and our love — to the People of Southwest Airlines for creating a marvelous Family and a wondrous airline!
• We do think it’s very important to always show a healthy sense of humor. We’ve told new hires the same thing for years — we want them to take our business seriously, but we don’t want them to take themselves too seriously.
• We often say that other airlines can copy our business plan from top to bottom, but Southwest stands apart from the clones because of our People and how we treat them.
• Our Culture motivates and sustains us. So, for many of us, being part of our Company is not just a vocation — it’s truly a mission.
• If you don’t take great care of your customers, somebody else will.
• We want to create Raving Fans®, not simply satisfied customers.
• The publicity we get from stories our Raving Fan Customers share about how our Employees treat them is more valuable and revenue-generating than advertising.
• Our Flight Crews are always thinking of creative ways to make flights interesting and fun for our Passengers.
• Let’s look at costs first, because in today’s competitive environment, the prize goes to those who can do more with less.
• Downsizing is an energy drain, and it’s by no means the only way to manage costs. We started with a pared-down, efficient organization and have stayed that way, so downsizing has not been a big issue.
• Treat your People as your business partners when it comes to managing costs.
• If you keep your people well informed and let them use their brains, you’ll be amazed at how they can help manage costs.
• One of our Flight Attendants suggested we take our logo off our trash bags, which had been color printed — this saved us about $ 100,000 a year.
• Our Flight Attendants also noticed how many fresh lemons were going to waste on every flight because very few Passengers asked for them, so we eliminated lemons and have saved a lot of money that way.
• Listen to suggestions from Employees.
• Many revenue-generating ideas including our Early Bird fare, our Bags Fly Free program, our PAWS (Pets Are Welcome on Southwest) program, and our “cashless cabin” policy come from Employees.
• Our union folks participate in everything we do; their Leaders are involved in all major decision making. As business partners, we are on the same side of the table.

Citizen of Choice

• We are not only concerned about our People, our Customers, and our financial well-being, but also about how we give back to the community.

A Compelling Vision

• Having some clarity about a compelling vision is crucial.
• Three key elements of a compelling vision: 1) Significant purpose — What business are you in? 2) Picture of the future — What will the future look like if you are successful? 3) Clear values — What guides your behavior and decisions on a daily basis?
• A Compelling Vision Tells You Who You Are (Your Purpose), Where You Are Going (Your Picture of the Future), And What Will Guide Your Journey (Your Values).
• 1) I think a higher purpose is something that takes precedence over any short-term goal like profit.
• We’re in the Customer Service business — we just happen to provide airline transportation.
• 2) The second element of a compelling vision is having a picture of the future.
• Our picture of the future is that every American has the “Freedom to Fly.”
• To make that happen, we want to keep our costs low (resulting in low fares) while maintaining an efficient, reliable way to fly. We also want people to enjoy flying, so we want to keep our spirits high (warm, friendly, and fun-spirited Employees), which all amounts to Legendary Customer Service.
• When we were just starting out, we wanted to “democratize the skies.”
• Bill Gates wanted to democratize the computer industry!
• It started with Herb and Colleen . . . and Gary Kelly now — they care for their Employees. They genuinely care for us.
• 3) The third and final element of a compelling vision: having clear, guiding values.
• People can’t focus on more than three or four values, if those values are to guide their behavior.
• We have identified three key values: Warrior Spirit, Servant’s Heart, and Fun-LUVing Attitude.
• You want to be a winner. People don’t want to work for a loser. You want to win at what you set out to do.
• So it’s a strong competitive spirit, but not in a warlike way.
• Work hard and play hard.
• Our second value: a Servant’s Heart. That’s the core of knowing how to lead with love.
• People need to have a Servant’s Heart — a passion for serving others.
• Our People enjoy what they do, and they pass that joy onto our Customers.
• The way you treat Employees and respect them and the way they trust your word and trust you.
• Our People know that they can expect us to always treat them with respect.
• Book: A Life of Servant Leadership by Robert K Greenleaf.
• Don’t ever ask anyone to do something that you wouldn’t be willing to do right along with them.
• Herb sat right there with me until four o’clock in the morning, on the floor, licking envelopes and putting stamps on envelopes.
• We’re all in it together.
• Pilots come back and help us pick up trash.
• The first is to give underperformers a loving reprimand for not living up to our expectations.
• The second step kicks in: career planning. We let underperformers pursue their career someplace else.
• One of the important things I’ve learned over the years is that behavior is controlled by its consequences.
• We want to enjoy our work life as much as we do our home life.
• We have fun, we don’t take ourselves too seriously, we maintain perspective, we celebrate successes, we enjoy work, and we are passionate Team players.
• Having fun is part of our Culture.
• We actually test for a sense of humor when we hire People.
• We sent a rude customer a note that said, ‘We will miss you.’
• Once you become legendary in your service, your Customers and fans often exaggerate or even fabricate stories.
• On Halloween, we dress up in crazy outfits and have a lot of fun.
• Fun means we enjoy and celebrate life and each other in a laid-back, down-to-earth environment that is welcoming, warm, and enjoyable.
• We celebrate everything.
• We have a gazillion Employee recognition programs.
• Early in our history we occasionally flew on “the other guys ” and we saw that there were no smiles, no warmth, and no enjoyment. It was all very robotic.
• We made a decision that we didn’t have to be stodgy or stuffy to be a successful business. We didn’t even want to use the word professional.
• Do you have a few well-established values for your organization or department that guide everyone’s behavior?
• What business you are in (your purpose) and where you are going (your picture of the future).
• Disney in entertainment, Nordstrom in retail, Chick-fil-A in quick-service restaurants, Ritz-Carlton in hospitality, Wegman’s in the grocery business, WD-40 in the “squeak and clean” business, Synovus in financial services and, of course, Southwest Airlines in the airline business.

What Makes Servant Leadership Work?

• Vision and direction are the leadership part of Servant Leadership.
• When it comes to vision, values, and direction, you have to say it over and over and over again until people get it right, right, right!
• Servant Leaders feel their role is to help people achieve their goals.
• Leaders serve and are responsive to people’s needs, training and developing them.
• As a customer, you can always identify a self-serving bureaucracy when you have a problem and are confronted by ducks who quack, “It’s our policy! Quack! Quack! Quack!”
• We empower our People to use common sense and good judgment. Yes, we have written rules and procedures, and you can go look at them, but I say to our folks every day, “The rules are guidelines. I can’t sit in Dallas, Texas, and write a rule for every single scenario you’re going to run into.
• Our folks are marvelous about handling all kinds of situations with our Customers.
• Servant Leadership and empowering your People is not soft management. It is management that not only gets great results but generates great human satisfaction for both our Employees and our Customers.

Defining Love

• He identifies nine components of love: patience, kindness, generosity, courtesy, humility, unselfishness, good temper, guilelessness, and sincerity.
• I think when you’re vulnerable, People realize that you, too, are human.
• I loved the book The Power of Positive Thinking.
• The second trait that Jim Collins identified to describe great leaders, after will, which we mentioned earlier, was humility.
• People who are humble feel good about themselves. They have a solid self-esteem.

Maintaining a Strong Culture

• Our reputation as a family-oriented Company is real.

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.