favorite-business

The Goal by Eliyahu Goldratt and Jeff Cox

The Big Idea: identify the bottleneck.  Relieve the bottleneck.  Repeat.

  • The Goal is one of Jeff Bezos’ three required books for his senior team. (Also, Effective Executive and Innovator’s Dilemma)
  • Cost accounting conventions lead businesses to focus on the wrong things.
  • The goal of a business is to make money. Therefore, every operational metric should link back to profit.
  • There are only three operational metrics that matter: 1) throughput, 2) inventory, 3) operational expense.
  • Throughput is money generated when products go out the door.
  • Inventory is money locked up in work in process until products go out the door.
  • Operational expense is money required to generate throughput.
  • Of these, throughput is by far the most important.
  • The most important objective is to increase throughput.
  • How do you increase throughput?  Identify the bottleneck (ignore everything else), relieve the bottleneck, repeat.

Made in America by Sam Walton

The Big Idea: Walmart succeeded through a combination of unique culture, very effective strategies, and lots of hard work. Nadine West’s two favorite role models are 1) Southwest Airlines and 2) Walmart, for their shared focus on affordable prices, lean operations, and Texas/Arkansas authenticity.

Wal-mart Culture

  • Building a great team is a given. Hiring only people with good attitudes is a given. Hard work is a given.
  • The whole point of retailing is to service the customer.
  • It’s always been more important for Wal-mart be the best than to be the biggest.
  • Wal-mart looks for action-oriented, do-it-now, go-getter types — not brilliant intellectuals who can’t get anything done.
  • Consider yourself lucky if you are short on cash early on.  It’s the best to build frugality into your DNA.
  • We’ve always tried not to take ourselves too seriously. Let’s have some fun.
  • Constant change is a vital part of the Wal-mart culture.
  • Wal-mart is not about big mansions or fancy cars.  We’re about serving our customer.
  • Wal-mart loves competition.  It only makes us better.
  • Big egos have no place at Wal-mart.  They tend to lead to bureaucracy and myopia, followed by decline.
  • Think small to grow big.  Remember what got us to where we are.

Wal-mart Strategy and Tactics

  • Always buy direct.  Using a middleman means you’re paying for their inefficiencies.
  • Don’t rely on third-party.  It’s harder to build your own logistics and distribution systems, but once you do, it’s a huge competition advantage.
  • Build stores in small towns that retailers are ignoring.
  • Use technology to improve the quality and speed of information.
  • Study your competition and copy what’s working.
  • Try lots of different things. Learn from the failures. Double down on what works.
  • Talk to everyone. The best ideas usually come from the front-lines, not headquarters.
  • If everyone else is going one way, think about going the opposite direction.
  • If you can, fly under the radar until you’re too far along to catch.
  • Share profits with employees and they will reward you with effort and loyalty.
  • Happy customers = word of mouth, which saves you a ton on advertising.
  • Be transparent about financials and share store financials with the people who work there.
  • When in doubt, over-communicate.
  • Focus on one store at a time – what they are getting right and wrong. Solve it for them and you can apply some of those solutions everywhere.

The Best Place to Work by Ron Friedman

The Big Idea: Happy employees are a competitive advantage.

 Chapter 1: Success is Overrated, Why Great Work Places Reward Failure
  • make it okay to try new things and fail
  • learn something from every failure, always
  • reward attempts, not just results
Chapter 2: The Power of Place, How Office Design Shapes Our Thinking
  • office design matters
  • eg. red invokes attention to detail, but also anxiety
  • eg. silence invokes focus, but also anxiety
  • optimal: caves + campfires
  • caves are quieter spaces where people can focus and think
  • campfires are interactive spaces where people can collaborate and communicate
  • good to have: safe and warm environment, nice views, scenes of nature, sunlight, lots of plants, aquariums,
  • use your workspace to convey what your company is about: Apple Store = simplicity, framed pictures, employee artwork,
  • let the team design their workspace
  • don’t forget about nice bathrooms (art, plants, magazines)
  • if possible, let people telecommute
Chapter 3: Why You Should Be Paid to Play
  • to improve problem solving and creative thinking, go on a walk
  • exercise improves your mood, triggers chemicals that reduces stress, and improves thinking
  • napping also improves problem solving and creating thinking
  • a careful balance of work and recovery is vital
  • late nights and burnout culture lower long-term productivity
  • disconnecting is important
Chapter 4: What Happy Workplaces Can Learn from a Casino
  • small, frequent pleasures can keep us happier than large, infrequent ones
  • perks communicate on an emotional level and provide a motivational boost
  • on-the-job rewards are significantly more motivating than cash bonuses
  • variety increases happiness
  • variation of activities make the workplace more enjoyable
  • unexpected pleasures deliver a bigger thrill
  • unexpected events have greater emotional weight
  • a constant flow of surprises keeps you engaged (movie, massage therapist)
  • experiences are more rewarding than objects; they involve other people, the memories improve with age; they can be relived
  • we don’t always know why we’re happy
  • color/scent/music can give an unconscious happiness boost
  • a grateful mind is a happy one;
  • gratitude: gratitude journal; ask staff to share what they are most proud of since last meeting; ask staff to thank someone else for a contribution made
  • excessive/extreme happiness can increase tendency to make mistakes, reduce motivation; people who don’t have negative emotions are called psychopaths
Chapter 5: How to Turn a Group of Strangers into a Community
  • the strongest predictor productivity: friendship at work
  • how to create workplace friendships: proximity, familiarity, similarity
  • how to accelerate friendship: share personal information
  • shared group activities (sports) >> happy hours and cocktail parties, because of interaction
  • a shared purpose (or common enemy) can unite factions
  • friendships at work help people stay emotionally and physically healthy
  • gossip can be a problem but it can also be useful to establish company culture and norms
  • gossip tends to happen when people are feeling powerless or insecure
  • identify strategic and persistent gossipers early
  • gossip tends to be a problem when leaders gossip
Chapter 6: The Leadership Paradox, Why Forceful Leaders Develop Less Productive Teams
  • intrinsic motivation > extrinsic motivation
  • emphasizing rewards reduces intrinsic motivation
  • the more emphasis placed on salary and bonuses, the more employees are going to focus on them
  • autonomy increases intrinsic motivation
  • let your team set their own calendar
Chapter 7: Better Than Money, What Games Can Teach Us About Motivation
  • the only thing that sustains happiness is status, respect and admiration among friends/family/peers
  • being recognized feels good
  • recognition feeds our need for competence
  • competence increases intrinsic motivation
  • being ignored is often more psychologically painful than being treated poorly
  • undeserved positive feedback is demoralizing to others who actually deserve the recognition
  • feedback is more effective when it is provided immediately
  • feedback is more effective when it is specific
  • compliment the behavior, not the person
  • public praise is more powerful than private praise
  • reward high performers with more responsibility
  • encourage peer-to-peer recognition
  • find a way to give meaning to the work (eg. nonprofit fundraisers)
  • to experience flow, work needs to be not too easy and not too hard
  • consider making on-the-job learning a requirement
  • acquiring new skills releases feel-good chemicals like dopamine
  • consider peer-to-peer coaching (pods of 3)
Chapter 8: How Thinking Like a Hostage Negotiator Can Make You More Persuasive, Influential, and Motivating
  • good communicators listen much more than they talk
  • good bosses listen much more than they talk
  • good listeners do a lot of paraphrasing and repeat backs
  • resolve workplace conflicts by understanding there is a task channel and a relationship channel
Chapter 9: Why the Best Managers Focus on Themselves
  • attitudes, emotions, and behaviors are contagious
  • leaders attitudes and habits are adopted by the members of their teams
  • culture comes from the top, so be aware that someone is always watching
Chapter 10: Seeing What Others Don’t, How to Eliminate Interview Blind Spots That Prevent You from Reading People’s True Potential
  • first impressions persist
  • referrals from your high performers (with no referral bonus) is the best strategy for hiring
  • interviews that involve a work assignment are optimal
  • cultural fit matters but too much similarity can lead to groupthink and impair innovation
Chapter 11: What Sports, Politics, and Religion Teach Us About Fostering Pride
  • pride in one’s company matters a lot
  • pride is fundamentally about status
  • share your company’s history with the team
  • share your company’s mission and vision with the team
  • being different is good (company culture)
  • include altruism alongside making a profit
  • emphasize everyone’s contribution: decision making, recognition by name
  • express appreciation directly to family’s for the person’s contribution
  • avoid inflated job titles

Anything You Want by Derek Sivers

The Big Idea: the purpose of life (and business) is happiness, not money.

  1. Business is not about money. It’s about making dreams come true for others and yourself.
  2. Making a company is a great way to improve the world while improving yourself.
  3. When you make a company, you make a utopia. It’s where you design your perfect world.
  4. Never do anything just for the money.
  5. Don’t pursue business just for your own gain. Only answer the calls for help.
  6. Success comes from persistently improving and inventing, not from persistently promoting what’s not working.
  7. Your business plan is moot. You don’t know what people really want until you start doing it.
  8. Starting with no money is an advantage. You don’t need money to start helping people.
  9. You can’t please everyone,
  10. Make yourself unnecessary to the running of your business.
  11. The real point of doing anything is to be happy, so do only what makes you happy.
  12. The best plans start simple.
  13. If you’re not saying, “Hell, yeah!” about something, say no.
  14. The way to grow your business is to focus entirely on your existing customers.
  15. Ideas are just a multiplier of execution.
  16. Care more about your customers (and employees) than about yourself.
  17. Don’t punish everyone for one person’s mistake.
  18. When you delegate, trust but verify.

Scaling Up by Robert Sutton and Huggy Rao

THE BIG IDEA

Scaling is a ground war, not just an air war. Scaling requires grinding it out; building the organization brick by brick, day after day. One more metaphor…it’s a marathon, not a sprint.

META LESSONS

1. All scaling issues are basically the same across all organizations and industries.
2. Scaling entails more than the Problem of More. You must grow AND get better.
3. People who are adept at scaling excellence are comfortable with the uncertainty and mess that accompanies scaling.
4. Scaling starts and ends with individuals.

SCALING MANTRAS

1. Spread a mindset, not just a footprint.
Running up the numbers and putting your logo on as many people and places as possible isn’t enough.
Examples: Facebook Bootcamp

2. Engage all the senses.
Bolster the mindset you want to spread with supportive sights, sounds, smells, and other subtle cues that people may barely notice, if at all.
Examples: Disney theme parks

3. Link short-term realities to long-term dreams.
Hound yourself and others with questions about what it takes to link the never-ending now to the sweet dreams you hope to realize later.
Examples: Stanford Directors College

4. Accelerate accountability
Build in the feeling that “I own the place and the place owns me.”
Examples: NovoEd

5. Fear the clusterfug.
The terrible trio of illusion, impatience, and incompetence are ever-present risks. Healthy doses of worry and self-doubt are antidotes to these three hallmarks of scaling clusterfugs.
Examples: Oracle Financials at Stanford

6. Scaling requires both addition and subtraction.
The problem of more is also a problem of less. What got us here won’t get us there. There is time to take down the scaffolding.
Examples: IDEO, Cost Plus Market

7. Slow down to scale faster – and better – down the road.
Learn when and how to shift gears from automatic, mindless, and fast modes of thinking (system 1) to slow, taxing, logical, deliberative, and conscious modes (system 2); sometimes the best advice is, “Don’t just do something, stand there.”

——————————————————————–
PART I. SETTING THE STAGE
Chapter 1. It’s a Ground War, Not Just an Air War
Chapter 2. Buddhism Versus Catholicism

PART II. SCALING PRINCIPLES
Chapter 3. Hot Causes, Cool Solutions
Chapter 4. Cut Cognitive Load: But Deal with Necessary Complexity
Chapter 5. The People Who Propel Scaling: Build Organizations Where “I Own the Place and the Place Owns Me”
Chapter 6. Connect People and Cascade Excellence: Using Social Bonds to Spread the Right Mindset
Chapter 7. Bad Is Stronger Than Good: Clearing the Way for Excellence

PART III. PARTING POINTS
Chapter 8. Did This, Not That: Imagine You’ve Already Succeeded

——————————————————————–

PART I. SETTING THE STAGE

Chapter 1. It’s a Ground War, Not Just an Air War; Going Slower to Scale Faster (and Better) Later
-scaling requires grinding it out
-make one small change after another, day after day
-never leave well enough alone
it’s a marathon, not a sprint
-7 scaling mantras (see above)

Chapter 2. Buddhism Versus Catholicism
-Buddhism: mindset guides behavior, but actions and practices vary wildly, KFC/Taco Bell/Pizza Hut in China, Joie de Vivre hotels,
-Catholicism: actions and practices are replicated identically, In-N-Out, See’s Candies
-constant tension between replicating tried-and-true practices and modifying them (or inventing new ones) to fit local conditions
success requires balance between Buddhism and Catholicism
-examples: IKEA in China, Atul Gawande and surgical standardization, Girl Scouts of Northern California, Starbucks, McDonald’s
-start with a great template and customize it
customization of a template instills a sense of ownership in people
-references: Mindset by Carol Dweck, Switch by Chip and Dan Heath
-scaling tradeoff “alone versus together”: shunning partners can slow growth but retain quality and consistency
-scaling tradeoff “more versus better”: grow faster might cost quality, sometimes quality can rebound
understand these tradeoffs and make a clear decision

——————————————————————–

PART II. SCALING PRINCIPLES

Chapter 3. Hot Causes, Cool Solutions
-a hot cause (crisis) triggers attention, emotional energy, and commitment
-when changing a culture, focus on both beliefs and actions
-when getting people to rally behind a hot cause, the key is creating experiences that generate “communities of feeling”
-it is harder to break a commitment when you have proclaimed it publicly
don’t foster a heroic mindset, where problems are continuously resolved with quick fixes by heroes instead of finding permanent solutions
-focus on creating good systems and a continuous improvement mindset
-strategy: name the problem to galvanize efforts, ex: “date rape”, “100,000 Lives Campaign”
-strategy: name the enemy to create some team spirit, ex: Apple vs Microsoft
-strategy: make efforts highly visible, Cialdini’s public commitments and accountability, ex: Gandhi’s Salt March
-strategy: breach assumptions, ex: IDEO CEO desk
-strategy: create gateway experiences and on-ramps, ex: teddy bear, security blanket, Chrysler factory cleanups,
-strategy: new/better rituals, Omnicell coatracks to check ego at the door
-strategy: lean on people who can’t leave well enough alone, identify and promote change promoters, ex: Charlotte Beers at Ogilvy Mathers
-tradeoff between poetry and plumbing, poetry can inspire people, plumbing makes things work
-example: Stanford bike helmets and smashed watermelons

Chapter 4: Cut Cognitive Load
-new rules, processes, and technologies can create cognitive overload
-cognitive overload can obscure focus, lower motivation, increase errors, decrease effectiveness
as teams get bigger, individual performance suffers
-J. Richard Hackman rule of thumb: no more than 10 people in one work team
-Dunbar number is 150 people
-at some point, bloated bureaucracies overwhelm the advantages of greater scale
-most startups are too small to suffer from Big Dumb Company disease but lessons still apply
people say they dislike hierarchies, but studies show they are happier, calmer, and more productive when power and status differences are present and well understood
-strategy: subtraction is a way of life, routinely refactor to remove bureaucracy
-ex: scaffolding in construction is needed at the beginning but always removed
-A.G. Lafley: keep things Sesame Street Simple
-strategy: make people squirm, killing bureaucracy is always a little scary, ex: Pixar’s Incredibles
-strategy: bring on the load buster (subtraction by addition), tools that focus attention to what matters, ex: Sberbank’s traffic light system, ex: checklists
-strategy: divide and conquer, divide large teams into smaller teams, ex: hospital pods, carefully think through coordination between small teams, bonus for team/organization performance not individual performance, ex: Ben Horowitz Freaky Friday
-strategy: bolster collective brainpower
-stick with savvy insiders and stable teams over new hires and new blood
-put together people who’ve worked together on new teams
-a team of smart people doesn’t automatically mean success
-fatigue and burnout hurts performance and decision making, so make sure everyone gets plenty of physical and mental rest
-it’s a marathon, not a sprint
-more hiring, more processes, and more rules are inevitable but wait until they are absolutely necessary
-Ben Horowitz says “give ground grudgingly”

Chapter 5: The People Who Propel Scaling
effective scaling requires people who care about the company and the customers
-Netflix pays top dollar to have stars at every position, then expects that they “act in Netflix’s best interest”
-alternatively, Japanese food service Tamago-Ya hires high school dropouts, give them lots of training and support, and receives loyalty and effort in return
-organizations that scale well avoid the trap of hiring “high-priced stars” to fix issues, instead they do the deep thinking and demanding work required to install, spread, and sustain excellence
-talent x accountability = scaling excellence
-strategy: squelch free-riding
-at about 20 people, if startups aren’t careful, new hires will feel like employees not owners
-at P&G, managers who fail to share ideas simply don’t get promoted
-GE evaluates managers based on leadership (including supporting GE’s culture) and performance
-moving out bad apples (free riders) is almost as important as hiring the right people
-strategy: inject pride and righteous anger
-Netflix treats the company like a competitive sports team, not a family, to focus employees on winning
-strategy: bring in guilt-prone leaders
-leaders who worry about their performance tend to be action-oriented and put the needs of others ahead of their own
-strategy: use subtle cues to prime accountability, ex: pair of eyes on the wall
-strategy: create the right gene pool, hire carefully early on
-a company becomes the people it hires, because founders and first employees create the culture
-founders tend to believe they are destined for greatness, and this belief gives them resiliency, persistency, and persuasiveness
-people shape the culture, and the culture then shapes the people, ex: Tata CEO Factory
-strategy: use other organizations are your HR, ex: hire from Teach for America, military, Stanford
-strategy: hire people prewired to fit your mindset, ex: Specialisterne hiring autistic workers

Chapter 6: Connect People and Cascade Excellence
-scaling hinges on discovering pockets of excellence and connecting them to others, then the excellence spreads on its own like dominoes
amateurs discuss strategy, professionals discuss logistics –US Army
-having a diverse change group propels scaling because diverse people interact with diverse groups of people
-look for master multipliers, high energy people who can spread the excellence broadly, ex: Hayden Fry, ex: Dr. William Halsted
bring on energizers, people with lots of positive energy to infect others with, ex: Facebook Chris Cox
-implement savvy gamification, ex: Rite-Solutions Mutual Fun for idea generation
-seven tools for activating domino chains of excellence: top down, broadcast your message out to one and all, have the many teach the few, one on one, from the few to the many, brokers, create crossroads and meeting places
-create a common heart beat through stand up meetings, 2-4 week sprints
-scaling is propelled by leaders who think and act like connectors

Chapter 7: Bad is Stronger than Good
-a little bit of negativity can undermine a lot of good work
when one deadbeat or asshole joins a small team, performance can drop 30%-40%
-8 strategies for getting rid of bad: nip it in the bud, get rid of bad apples, plumbing before poetry, adequacy before excellence, use the cool kids, kill the thrill, time shifting, focus on the best/worst/end

——————————————————————–

PART III. PARTING POINTS

Chapter 8. Did This, Not That: Imagine You’ve Already Succeeded
-Daniel Kahnamann’s premortem: imagine failure and try to explain what happened, imagine success and try to explain what happened
most high-growth startups fail because they grew too big too fast
-ask your team, are we happy living in the world we built?

Nuts! by Kevin and Jackie Freiberg

The Big Idea
Southwest succeeded by focusing on profitability over market share and by taking the time building a fun and positive culture. Doing this likely slowed down their growth but also resulted in top customer service ratings, top safety record, very low employee turnover, and 40+ consecutive years of profitability

Key Takeaways

Chapter 1: Nuts? You Decide
-Southwest maniacally avoids following industry trends
-Results: profitable since 1973, steady growth, little debt, low fares, productive work force, low employee turnover, highest customer ratings, highest on-time, best safety
-mission: make air travel affordable for everyone
profits are required to fulfill the mission

Chapter 2: Goliath Meets David
-the early years of fighting for survival (against litigation and recession) gave Southwest a tenacity that is now a part of its culture

Chapter 3: The Battle Heats Up
-in order to be different, Southwest chose a strategy of low fares + superior service
-Southwest advertised its underdog position heavily in the early days

Chapter 4: A Maverick Emerges
-early employees had an intense work ethic and drive to win
existing competition was conventional, businesslike, and bland
-Southwest’s outrageous personality partially resulted from desperation
-Southwest’s ad agency delivered campaigns meant to be outrageous
-employees were allowed freedom to get the job done
-management spent a lot of time with employees
-Southwest hired people who were fun, as well as hard working, smart, reliable
-the early fight-for-survival mentality didn’t just breed a can-do, inventive spirit; it also brought everyone very close — like family

Chapter 5: Flying in the Face of Conformity
purpose: to make a profit, achieve job security for every employee, and make flying affordable for more people
-strategy to achieve that purpose: best service and lowest fares to the shortfall, frequent-flying, point-to-point traveler
-Southwest Airlines (unlike competitors) never strayed from its strategy
profits are more important than market share
-clear strategy led to clear tactical decisions: point to point >> hub and spoke, avoid congested airports, target overpriced markets, use only 737, keep boarding simple, serve no meals, constantly improve turnaround times
think ahead and be frugal

Chapter 6: Professionals Need Not Apply
hire for attitude, train for skills
-Southwest hires a certain type of person: light-hearted, fun, enthusiastic

Chapter 7: Kill the Bureaucracy
-Southwest moves fast and is opportunistic
stay as lean as possible to avoid bureaucracy and sluggishness
-in a lean organization, poor performance is impossible to hide
-communication is face-to-face and on a first-name basis
-meetings are short and action oriented
simplification decreases costs and increases speed
-it all boils down to a thousand little things that help people solve the problem of how to turn the planes faster
-Southwest financial results are open to any employee
-times change and companies that don’t adapt will not survive
-changing times offer an opportunity for companies that can adapt and move quickly
-Southwest doesn’t do traditional strategic planning; instead they perform future scenario planning
-Southwest trusts its employees to do their jobs and that helps it adapt so quickly
-Southwest positions itself as an underdog to convey a sense of urgency and instill competitiveness to employees

Chapter 8: Act Like an Owner
employees who are also owners care a lot more about the bottom line
-hire entrepreneurial self-starters
-Southwest has a profit-sharing plan for all employees, investing 15% of pretax operating profits, some of which is used by employees to buy stock
-today employees own about 12% of the company

Chapter 9: Learn Like Crazy
-learning is key to Southwest’s success
hire voracious readers
-hire people who listen more and ask more questions than they talk
-encourage people to understand others’ jobs accelerates learning (pilots <> ground staff <> ramp agents)
-employee newsletter, LUV Lines, shares stories and lessons, teaches employees about financial performance

Chapter 10: Don’t Fear Failure
-always be experimenting
remove the fear of rejection and people will be willing to experiment more
-do more of what works, learn from what doesn’t work
experimentation solidifies an action-oriented, get-it-done culture
-experiments led to new cost-savings, new features, happier customers

Chapter 11: One Great Big Family
-shared struggle to survive fostered a close-knit family-like culture that still remains
Southwest core values: profitability, low cost, family, fun, love, hard work, individuality, ownership, legendary service, egalitarianism, common sense, simplicity, altruism,
Southwest philosophy: employees are number one, think small to grow big, manage in the good times for the bad times, irreverence is okay, it’s okay to be yourself, have fun at work, take the competition seriously but not yourself, hire for attitude and train for skill, Southwest is a service company, do whatever it takes, always practice the golden rule
-Southwest norms: be visionary, celebrate everything, hire the right people, limit committees, keep a warrior spirit, keep multiple scenarios, minimize paperwork, feel free to be informal, move fast, dare to be different

Chapter 12: Keeping the Spirit Alive
-Southwest is a family
-Southwest celebrates its people through photos, news clippings, letters in the hallways
-Colleen sends birthday cards to all members of the Texas legislature
-Colleen sends personalized birthday gifts to employees
-Herb tells great stories
-Culture Committee formalizes these practices
-Walk a Mile in My Shoes helps reinforce culture and keep people connected across functions
-Helping Hands directs employees to temporarily help overworked employees elsewhere

Chapter 13: The Art of Celebrating Milestones
-take time for outrageous celebrations of milestones
-celebrations: build relationships, create shared history, helps envision the future, recognize milestones, reduces stress, inspires and motivates employees, builds self-confidence and removes fear, mourns the loss associated with change

Chapter 14: Celebrating Big People With Big Hearts
people love awards and public recognition
-must be authentic, must raise people’s self-esteem, must be done right, must appeal to all the senses, must be seen as an investment, must be cost-effective

Chapter 15: Still Nuts After All These Years
always have fun
-business casual clothes only
-costumes when appropriate
-good-natured pranks to lighten things up
-fun games and contests for employees or customers (worst drivers license, holes in socks)
-having fun = productive employees, low absenteeism, low turnover, more creativity and innovation

Chapter 16: Luv
-people need to be loved and accepted
-display patience and commitment to employees and customers
spend more time with your people and less time with other CEOs — Herb
when your employees know you care, it’s easier to offer constructive criticism
-share your appreciation for employees hard work
-love comes without conditions, however approval must be earned
-Colleen has little patience for habitual mediocrity
-employees are rarely fired for technical skill but anyone who mistreats an employee is history

Chapter 17: Compassion for Community
-community service starts on a local level
-eg: disaster relief, Ronald McDonald house, holiday charity, neighborhood makeovers

Chapter 18: Unconventional Advertising
-Herb arm-wrestled another airline CEO to resolve a dispute => great PR for both companies
-Southwest uses the underdog story to turbocharge marketing and advertising
-10 core advertising principles: make advertising entertaining, use advertising to keep the company’s spirit alive, match the message and media with the company’s strategy and culture, take the competition seriously but not yourself, make flying fun, make every employee a living advertisement, model the company’s values for employees, under promise and over deliver, make creativity a team effort, build credibility in everything you do

Chapter 19: Customers Come Second
-the customer is not always right
Herb is not afraid to ask problem customers to fly another airline
-talk to your employees, don’t just offer them a suggestion box
-track both customer complaints and customer compliments
great customer service is understanding (intellectual) + empathizing (emotional)

Chapter 20: Employees Come First
-trust your employees to use good judgement instead of rigid policies
executives lead by example with good customer service themselves
-no job is too mundane, Herb loads baggage the Wednesday before every Thanksgiving
-Southwest respect front-line employees enough to share performance and financial information
-Southwest publicly celebrates outrageous customer service stories in Luv Lines

Chapter 21: Leaders Leading Leaders
-there is no heroic leader at Southwest
-there are leaders at every level of the company
leadership is not getting what you want, it’s getting people to want what you want because they share your purpose, vision, and values
-leadership does not come from titles or positions, it comes from ability to influence
-integrity is doing what you say you’re going to do
-Southwest has a reputation among suppliers, government, customers for doing what it says it’s going to do and that trust gives it an advantage over competitors
-do your research and be more prepared than your competitor
-love your people and they will follow you
-listen more than you talk
a group of people inspired by a common vision and purpose is incredibly powerful

Chapter 22; Leadership From The Inside Out
employees are proud to be part of a company culture that values them as people not positions or roles
employees understand that their job security is inextricably tied to the company’s performance
-for most employees, Southwest is not a job, it’s a crusade, and a fun one
-customers are also treated like people, not numbers
-employees take care of each other through compassion and an independent charity to help other employees in short-term need
-leaders recruit and groom other leaders to succeed them

Chapter 23: Go Nuts!
people want work that is meaningful, so your company needs a purpose
people want to have fun, so don’t take yourself so seriously
when you believe in people, they will rise to greatness
dare to be different, yes there are risks but the payoff is worth it
culture is more important than strategy and operations
choose service over self-interest

Built to Last by Jim Collins and Jerry Porras

This is a study on how to build a company that is resilient and exceptional.  It’s one of my favorite books.

The Big Idea: visionary companies have a strong inner core (core purpose, core values) and a willingness to change and adapt everything except that core.

KEY TAKEAWAYS FROM BUILT TO LAST

  • 1. Build clocks instead of relying on time tellers.
    • Focus on building organizational intelligence and capabilities rather than relying on a charismatic leader coming up with a great strategy or a great idea.
    • Founders of these visionary companies are builders and architects, not artists or inventors.
    • The company is the creation.
  •  2. People, products, and purpose come before profits.
    • Built-to-last companies are willing to lose some profit margin to fulfill a purpose, not because it will increase long-term shareholder value more (which it might) but because it’s the right thing to do.
    • Profit for the company is like oxygen for the body.  The body needs oxygen to survive but consuming oxygen is not the point of life.
    • Built-to-last companies have very different purposes, but they all had one.
    • These companies indoctrinate new employees into the core ideology and promoted/rewarded based based on employee alignment with the core ideology.
    • Sometimes, these companies were founded with a core ideology.  Sometimes, the core ideology evolved only after the startup phase.
  • 3. Keep the core but be ready to change everything else.
    • Core ideology never changes.  Culture can change.  Strategies usually change. Tactics definitely change.
    • Built-to-last companies are constantly improving and are never satisfied with the status quo.
  • 4. Make sure everything is aligned.
    • Even small processes, decisions, and systems should align with the core.
    • People do notice the little things, so definitely sweat the small stuff.
    • Everything should reinforce everything else to support the core.
    • Decisions that fit the core ideology might often seems crazy from the outside.

HOW TO BECOME A BUILT-TO-LAST COMPANY

  • 1. Set Big, Hairy, Audacious Goals (BHAG).  Get everyone in the company to buy-in.
  • 2. Develop a cult-like culture that some people love and some people dislike.  Those that love it stick around for a long-time.
  • 3. Try lots of stuff and keep what works. Evolution beats intelligent design.  Failure is okay.  Detailed plans usually fail because circumstances always change.
  • 4. Promote from within. Recruit and develop the next generation of leaders.
  • 5. Always be improving. Develop mechanisms to prevent complacency and status quo. Become a self-improvement machine.

The One Thing By Gary Keller

The Big Idea: 1) find your purpose and then 2) for four UNINTERRUPTED hours every morning, focus on THE ONE THING that will get you there fastest.

  • If you chase two rabbits, you will not catch either one. –Russian proverb
  • Ask yourself “What’s the one thing you can do right now that will make everything else easier or unnecessary?”
  • It is those who concentrate on but one thing at a time who advance in this world. –Og Mandino
  • Most great businesses owe their great success to only one thing.
  • 80/20: 80% of the output is from 20% of the input.
  • Multitasking doesn’t work.
  • Don’t rely on extraordinary discipline to achieve.  Rely on habits developed with just a little bit (66 days) of discipline.
  • Willpower is limited.  Do your hardest tasks in the morning, when your willpower and energy are highest.
  • Don’t pursue a life of constant balance.  Instead counterbalance your life between sprints of work and constant life.
  • Extraordinary success requires thinking big.
  • If you have a growth mindset, you don’t need to fear failure. –Carol Dweck
  • Ask yourself “What’s the one thing you can do right now that will make everything else easier or unnecessary?”
  • The most productive people start with a purpose and use it like a compass.
  • Having a clear purpose makes it easy to prioritize.
  • Money won’t make you happy.
  • Happiness happens on the way to fulfillment.
  • Ask yourself where you want to be in 20 years, then 5 year, then 1 year, then 3 months, then 1 month, then 1 week, then what you need to do today.
  • Block out the first 4 hours of every morning for your ONE THING and don’t let anyone interfere.
  • Successful people always have coaches.
  • Get used to saying no to requests that don’t advance your ONE THING.
  • Be prepared for a little chaos while you are focused on your ONE THING.
  • Watch your mental and physical health and sleep.
  • Avoid any negative environments and people.
  • The best way to live is to live with NO REGRETS.
  • Top 5 Regrets of the Dying
    • I wish I’d let myself be happier.
    • I wish I’d stayed in touch with my friends.
    • I wish I’d had the courage to express my feelings.
    • I wish I’d hadn’t worked so hard.
    • I wish I’d had the courage to live a life true to myself.

How to Win Friends and Influence People by Dale Carnegie

This book is on my top 20 books of all-time list. I must have been in middle school when I first got my hands on this book and read it cover to cover. Ever since then, I’ve had a copy on every bookshelf I’ve owned. Dale Carnegie included his own book summary at the end of the book, which I’m just reposting below.

Fundamental Techniques in Handling People
1. Don’t criticize, condemn, or complain
2. Give honest and sincere appreciation
3. Arouse in the other person an eager want

Six Ways To Make People Like You
1. Become genuinely interested in other people.
2. Smile.
3. Remember that a person’s name is to that person the sweetest and most important sound in any language.
4. Be a good listener. Encourage other people to talk about themselves.
5. Talk in terms of the other person’s interests.
6. Make the other person feel important-and do it sincerely.

Win People To Your Way Of Thinking
1. The only way to get the best of an argument is to avoid it.
2. Show respect for the other person’s opinions. Never say, “You’re wrong.”
3. If you are wrong, admit it quickly and emphatically.
4. Begin in a friendly way.
5. Get the other person saying “yes, yes” immediately.
6. Let the other person do a great deal of the talking.
7. Let the other person feel that the idea is his or hers.
8. Try honestly to see things from the other person’s point of view.
9. Be sympathetic with the other person’s ideas and desires.
10. Appeal to the nobler motives.
11. Dramatize your ideas.
12. Throw down a challenge.

Be A Leader
1. Begin with praise and honest appreciation.
2. Call attention to people’s mistakes indirectly.
3. Talk about your own mistakes before criticizing the other person.
4. Ask questions instead of giving direct orders.
5. Let the other person save face.
6. Praise the slightest improvement and praise every improvement. Be “hearty in your approbation and lavish in your praise.”
7. Give the other person a fine reputation to live up to.
8. Use encouragement. Make the fault seem easy to correct.
9. Make the other person happy about doing the thing you suggest.

Delivering Happiness By Tony Hsieh

This is one of our top 5 business books.  Our first company tagline was “Happiness in a Pink Package.”

Book notes are below:

  • Books recommended: Good to Great, Tribal Leadership, Fred Factor, Fish, Made to Stick, Peak, Emotional Equations, Connected, Re-Imagine, Crush It
  • Be clear about your company’s culture, values.  Communicate them.  Commit to them.
  • Ask yourself, “what is your goal in life?”
  • And along with way, ask yourself, “what are your other goals?”
  • Think in terms of Maslow’s hierarchy for customers: first they need the correct item, then free and fast shipping, then surprise upgrades.  Get the fundamentals right first.
  • Zappos: 1. purpose, 2. people, 3. profits

Zappos 10 Core Values

  1. Deliver WOW Through Service
  2. Embrace and Drive Change
  3. Create Fun and A Little Weirdness
  4. Be Adventurous, Creative, and Open-Minded
  5. Pursue Growth and Learning
  6. Build Open and Honest Relationships With Communication
  7. Build a Positive Team and Family Spirit
  8. Do More With Less
  9. Be Passionate and Determined
  10. Be Humble