strategy

Fusion by Denise Lee Yohn

The Big Idea: The best companies fuse their (external) brand with their (internal) culture into one.

  • Culture is “the way we do things here.”
  • Brand is “how others feel about us.”
  • Herb Kelleher says that culture is the key competitive advantage of Southwest Airlines.
  • Brand-culture fusion improves employee retention, improves employee motivation and productivity, differentiates you in the marketplace, makes your brand more authentic, and improves customer loyalty.
  • First step is to understand your purpose (why we do what we do).
  • Second step is to understand your core values (how we do things around here.)
  • To align your brand and your culture: 1) communicate, communicate, communicate, 2) remember that actions speak louder than words, 3) engage every leader from bottom to top, and 4) get the right people on the bus.
  • Your tools to implement brand-culture culture are: Organizational Design and Operations.
  • Design your organization to cultivate your desired culture. Do this through Structure (org chart), Standards (company-wide rules), and Roles.
  • Operations is “how you run your organization”. Do this through process and workflow design.
  • Put someone in charge of “Employee Experience” (EX), just like you put someone in charge of “Customer Experience”.
  • Design the Employee Experience by paying attention to environment, tools, and intangibles.
  • Continue to make sure the Employee Experience aligns with your desired culture.
  • Design and nurture Rituals and Artifacts that reinforce your culture, your purpose, and your core values.
  • Make your employee handbook compelling and unique to your culture.
  • To engage employees, consider using videos or letters that highlight your brand and reinforce the brand-culture fusion.
  • If you have a stronger culture than brand, consider building your brand on top of your culture. Examples: Unilever and REI have focused on communicating their core values to customers and thereby, building a culture-first brand.

Start With Why by Simon Sinek

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

INTRODUCTION

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

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

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

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

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

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

CH 2: CARROTS AND STICKS

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

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

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

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

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

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

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

Manipulations lead to transactions, not loyalty.

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

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

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

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

PART 2: AN ALTERNATIVE PERSPECTIVE

CH 3: THE GOLDEN CIRCLE

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

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

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

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

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

CH 4: THIS IS NOT OPINION, THIS IS BIOLOGY

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

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

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

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

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

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

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

Winning hearts takes more work.

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

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

CH 5: CLARITY, DISCIPLINE AND CONSISTENCY

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

To inspire starts with the clarity of WHY.

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

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

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

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

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

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

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

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

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

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

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

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

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

PART 3: LEADERS NEED A FOLLOWING

CH 6: THE EMERGENCE OF TRUST

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

CH 7: HOW A TIPPING POINT TIPS

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

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

Manipulations don’t breed loyalty.

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

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

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

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

PART 4: HOW TO RALLY THOSE WHO BELIEVE

CH 8: START WITH WHY, BUT KNOW HOW

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

All great leaders inspire because they have clarity of WHY.

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

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

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

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

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

Walt Disney dreamed, while Roy Disney built the empire.

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

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

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

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

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

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

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

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

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

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

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

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

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

PART 5: THE BIGGEST CHALLENGE IS SUCCESS

CH 11: WHEN WHY GOES FUZZY

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

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

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

CH 12: SPLIT HAPPENS

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

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

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

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

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

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

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

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

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

PART 6: DISCOVER WHY

CH 13: THE ORIGINS OF A WHY

Finding WHY is a process of discovery, not invention.

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

CH 14: THE NEW COMPETITION

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

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

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

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

Turning the Flywheel by Jim Collins

The Big Idea: great companies are built by consistent execution of a strategy with built-in positive feedback loops — like turning a giant flywheel over and over, building momentum with each turn.

  • When building a great company, there’s no single defining action, no grand program, no single killer innovation, no solitary lucky break, and no miracle moment.
  • Building a great company is like turning a giant, heavy flywheel.
  • The flywheel is a series of good decisions, supremely well-executed, that compound one upon another.
  • Eg. Amazon, low prices => more customers/vendors => economies of scale => lower prices.
  • Companies caught in the doom loop do the following: react to disappointing results without discipline => grasp for a new leader/strategy/product to save the => experience more disappointment.
  • The greatest danger in business and life lies not in outright failure but in achieving success without understanding why you were successful in the first place.
  • Leaders are often seduced by an endless search for the Next Big Thing.
  • There is no systematic correlation between achieving the highest levels of performance and being first into the game. Amazon and Intel started life in the wake of pioneers that preceded them. 
  • What truly set the big winners apart was their ability to turn initial success into a sustained flywheel.
  • Fire bullets, then cannonballs. Big successes tended to make big bets after they’d empirically validated ideas. 
  • Two ways the Mighty Fall: 1) Hubris Born of Success, 2) Undisciplined Pursuit of More.
  • The big winners are those who take the same flywheel from ten turns to a billion turns rather than inventing new flywheels.

Examples

Appendix: The Good-to-Great Framework

1. Stage 1: Disciplined People
1.1. Level 5 Leaders. Leaders show personal humility and indomitable will.
1.2. First Who, Then What. First get the right people on the bus (and the wrong people off the bus). Then figure out where to drive the bus.

2. Stage 2: Disciplined Thought
2.1. Genius of the AND. Reject the Tyranny of the OR. Find a way around the tradeoff. Eg. Think long-term, think creatively, be different. 
2.2. Confront the Brutal Facts. (The Stockdale Paradox.) Retain absolute faith that you can and will prevail in the end, regardless of the difficulties, and at the same time, exercise the discipline to confront the most brutal facts of your current reality.
2.3. The Hedgehog Concept. Live at the intersection of the following three circles: 1) what you’re deeply passionate about, 2) what you can be the best in the world at, and 3) what drives your economic or resource engine.

3. Stage 3: Disciplined Action
3.1. The Flywheel: Relentlessly push a giant, heavy flywheel, turn upon turn, building momentum.
3.2. 20 Mile March. Develop relentless consistency. Twenty miles a day, every day.

4. Stage 4: Build to Last
4.1. Build a clock, don’t tell time.
4.2. Preserve the core, but stimulate progress.
4.3. Be prepared to take advantage of good luck and absorb bad luck.

Strategy Concepts of Bill Belichick

The Big Idea: Bill Belichick built a dynasty around on a culture of accountability, continuous improvement, strategic flexibility, and detailed preparation.

Part 1: Culture

  • “Do your job” is the New England Patriots mission statement.
  • The goal is to improve on a daily basis, work hard, pay attention to the little details, and put the team first.
  • Belichick makes sure that the goals set out are achievable.
  • Work as hard at it as we can and improve on a daily basis.
  • Emphasis on individual performance in a team setting creates a feedback loop that raises the performance of the entire team.
  • Without having to worry about the next person, each individual player is able to put their complete focus, dedication, and effort into their own task, which raises the performance of the entire team.
  • No one will be willing to follow someone who isn’t competent at their own job.
  • There are many types of leadership styles.
  • It’s impossible to deal with everyone on an individual basis on a daily basis so Belichick relies upon managers and department heads to keep him informed.
  • Having the right people as captains was critical.
  • Belichick strives to make sure that the right people are in the right positions.
  • Players on the team vote for the team captains ,
  • Players buy into the Patriots’ culture due to Belichick addressing any problems quickly.
  • Hold people accountable for their actions.
  • Belichick views self-evaluation and holding each player accountable as a key part of his coaching strategy.
  • The only way for us as a team to get a championship level is to continue to evaluate ourselves, and we have to look at what we’ve done and critically analyze ourselves.
  • We can’t hire a consultant to come in and fix our problems.
  • The only way for us to get better is to do our own R & D.
  • Everyone in the organization must study, learn, and strive to get better.
  • Everyone must have an open mindset and be willing to learn and be evaluated.
  • Willingness to accept feedback comes with “a certain amount of humility.”
  • Understand that mistakes are not fatal. Only by addressing the problem can things improve.

Part 2: Preparation

  • Bill Belichick’s father was also a football coach and collected an extensive library of football books.
  • Four hundred and thirteen books served as the foundation of Bill Belichick’s football knowledge.
  • Belichick insists “Bill Walsh: Finding the Winning Edge: is the greatest piece of football literature regarding a franchise blueprint ever written.
  • He is constantly adding to his expertise by finding new information and ideas to win football games.
  • He doesn’t care where the ideas come from, or who offers the ideas.
  • During staff meetings with his coaches, he first asks his staff for their ideas and suggestions.
  • He’s not so full of himself that he won’t listen and tap into any source for an edge.
  • Belichick extensive use of analytics is one of his primary competitive strategies.
  • The work ethic of Bill Belichick is legendary.
  • They know there are nights when Belichick sleeps at Gillette.
  • When everyone else is sleeping, or tweeting, or playing Madden, or lounging around, Belichick is studying the game.
  • One method that Belichick teaches his players is through the use of daily quizzes.
  • No one commands a depth of knowledge quite like Belichick.
  • Everyone is expected to study, regardless of their role on the team and how much playing time they are expected to have.
  • These quizzes and intense preparation clearly pays off.
  • For players who are unable to keep up, Belichick will quickly weed them out.
  • When guys get there they either buy in immediately or they are so overwhelmed that they want out.
  • With the ball on the one-yard line, the Seattle Seahawks threw a pass play that was intercepted by the Patriots’ Malcolm Butler. Butler, an undrafted free agent, was coached and prepared by Bill Belichick and told to be ready for that play.

Part 3: Performance

  • How exactly does Belichick ignore the distractions? He places the entire organization’s focus on the next game.
  • Belichick will refuse any interview that has to do with the past because he’s solely focused on the next game.
  • Based on his knowledge and constant learning, Belichick is always innovating.
  • Despite the heavy criticism for what was essentially the right call on 4th and 2, Belichick did not let the negative outcome affect his decision-making process and would make the same call again.
  • If you know the history of the game, you understand that it’s a changing game.
  • He isn’t afraid or held prisoner to a certain way of doing things because he knows that change is constant.
  • Belichick realized that a faster tempo was becoming a competitive advantage.
  • Belichick entire strategy of winning games is based upon exploiting and attacking the weakness of his opponent.
  • The core tenets of Bill Belichick’s football program always will remain the same. Versatility is key. Do your job. Hide your weakness and attack their’s.
  • Even at 63 years old and with four Super Bowl rings on his nightstand, he’s constantly seeking out new information and his plan of attack is evolving.
  • By bringing in smart football players and combining it with his mental training, Belichick is able to create a smart, fast moving team.
  • Belichick cross-trains his coaching assistants. Belichick trains his coaching staff to be able to coach both sides of the ball and to be able to move where needed.
  • Unlike the many coaches who identify with a particular style or tree, Belichick isn’t locked into a singular ideology.
  • Belichick’s greatness has never stemmed from a Big Idea — unless the Big Idea is the relentless application of many Little Ideas.

10 Keys to Success

  1. Clearly define the roles of everyone in the organization.
  2. Hold people accountable for their roles , and help them when they accept responsibility.
  3. The most vocal person isn’t necessary the leader. Be on the lookout for people who are doing their job well in a quiet manner.
  4. Improvement takes place on a daily basis.
  5. You must take the time to learn about the larger trends in your industry.
  6. The goal is to “move the football”, not prove that your way of doing things is the right way.
  7. Use any source that can help you gain an advantage.
  8. Your strategy must be tailored to your current situation. What worked in one situation will not necessary work in another situation.
  9. Focus on the task at hand. Don’t get caught up in any distractions.
  10. Control what you can. You can control your effort and your decision – making process. You cannot control results and outcomes.

It Doesn’t Have to Be Crazy at Work by Jason Fried and DHH

The Big Idea: choose to have a calm, profitable, healthy workplace. 

  • Why is work so crazy? Physical and virtual distractions at work. And an unhealthy obsession with growth.
  • Sustained exhaustion is not a badge of honor, it’s a mark of stupidity.
  • How many hours at the office are really spent on work itself?
  • The answer isn’t more hours, it’s less bullshit. Less waste, not more production. Fewer distractions and less stress.
  • It’s time to give people the uninterrupted time that great work demands.
  • Basecamp has been profitable every year. Profitability alleviates stress.
  • Where does our money come from? Customers, not venture capital.
  • We don’t have a single employee in the Valley.
  • We put in about 40 hours a week most of the year and just 32 in the summer.
  • On balance we’re calm — by choice, by practice. We’re intentional about it.
  • Protect people’s time and attention.
  • 40 hours of work per week.
  • Ample time off.
  • Meetings are a last resort.
  • Asynchronous communication first, real-time communication only when necessary.
  • Sustainable practices for the long term.
  • Focus on profitability.
  • When you realize the way you work is malleable, you can start molding something new, something better.
  • We didn’t just assume asynchronous communication. We tested out everything and figured it out.
  • We found that paying for people’s vacations was better than cash bonuses.
  • Hustlemania has captured a monopoly on entrepreneurial inspiration.
  • You’re not very likely to find that key insight or breakthrough idea north of the 14th hour in the day.
  • Improve iteratively and continuously. Fewer explosions and more laying of bricks and applying another layer of paint.
  • Put in a good day’s work, day after day, but no heroics.
  • The business world is obsessed with fighting, winning, dominating, and destroying. But there is another way.
  • Do we have enough customers paying us enough money to cover our costs and generate a profit? Good. Then we’re successful.
  • What matters is that we have a healthy business with sound economics that work for us. Costs under control, profitable sales.
  • We’re serving our customers well, and they’re serving us well. That’s what matters. And just for the customers, we’ve invested in many softwares like CRM that help us in managing customers and have been trying to follow whatever Salesforce has professed.
  • “Comparison is the death of joy.” —Mark Twain
  • There’s no chasing others at Basecamp, just deep work and keeping customers happy.
  • We don’t do goals.
  • We don’t mind leaving some money on the table and we don’t need to squeeze every drop out of the lemon. Do we want to maximize value through constantly chasing goals? No thanks.
  • We are working on building a long-lasting sustainable business with happy employees.
  • How about something really audacious? No targets, no goals. And if you must have a goal, how about just staying in business? Or serving your customers well? Or being a delightful place to work?
  • Everyone wants to be a disrupter these days. If you stop thinking you must change the world, you lift a tremendous burden of yourself and your team. 9pm. meetings and weekend sprints are not as necessary.
  • “NO PAIN, NO GAIN!” looks good on a poster at the gym, but real life is not like the gym.
  • Most of the time, if you’re uncomfortable with something, it’s because it isn’t right. Listen to your discomfort. It was the discomfort of knowing two people doing the same work at the same level were being paid differently that led us to reform our payment structure.
  • It was discomfort working at companies that had taken large amounts of venture capital that led us to pursue a path of profitable independence.
  • Working 40 hours a week is plenty. During the summer, we even take Fridays off. If you can’t fit everything you want to do within 40 hours per week, you need to get better at prioritizing and focusing, instead of working longer hours .
  • Cut out what’s unnecessary.
  • Protect what’s both most vulnerable and most precious: your employees’ time.
  • Eight people in a room for an hour doesn’t cost one hour, it costs eight hours. Plus the cost of the interruption in concentration.
  • Instead of update meetings, we ask people to write updates daily, when they have a free moment. Others can read them when they have a free moment.
  • 60 minutes isn’t really an hour if it’s broken up into four 15 minute blocks.
  • Productivity is for machines, not for people. We believe in effectiveness .
  • Stop equating work ethic with excessive work hours.
  • Work doesn’t happen at work because of all the interruptions. To facilitate collaboration, we borrowed an idea from academia and have people schedule office hours. People are welcome to stop by and discuss work during office hours.
  • The shared work calendar is one of the most destructive inventions of modern times. Taking someone’s time should not be easy.  Meetings should be a last resort, especially big ones.
  • We don’t require anyone to broadcast their whereabouts or availability at Basecamp. Hours worked and butts in seats don’t matter; only actual work matters. The only way to know if work is getting done is by looking at the actual work. That’s the boss’s job.
  • We don’t require anyone to broadcast their availability and we reject the proliferation of chat tools invading the workplace. Know how to reach someone in an emergency but also recognize there are very few actual emergencies.
  • The expectation of an immediate response is the ember that ignites so many fires at work. Create a culture of eventual response rather than immediate response.
  • Instead depending on chat to stay caught up on work, catch up on what happened today as a single summary email. We also write monthly updates called “Heartbeats.”
  • We do care and we do help. But a family we are not. A family sacrifices everything for each other. We’re people who work together to make a product that we are proud of. You don’t have to pretend to be a family to be courteous. Or kind. Or protective.
  • The best companies aren’t families. They’re supporters of families.
  • A leader sets the example that everyone follows. If you value reasonable hours, plentiful rest, and a healthy lifestyle for yourself, then others will follow. If you, as the boss, want employees to take vacations, you have to take a vacation. Workaholism is a contagious disease.
  • The trust battery between the two of you is either charged or discharged, based on things like whether you deliver on what you promise.” A low trust battery is at the core of many personal disputes at work.
  • What the boss most needs to hear is where they and the organization are falling short. The boss needs to ask: “What can we do even better?” “What’s something nobody dares to talk about?” “Are you afraid of anything at work?” “Is there anything you worked on recently that you wish you could do over?” “What do you think we could have done differently to help Jane succeed?” “What advice would you give before we start on the big website redesign project?”
  • The CEO is usually the last to know how things are really going.
  • There’s no such thing as a casual suggestion when it comes from the owner of the business.
  • On low-hanging fruit: he further away you are from the fruit, the lower it looks. Declaring that an unfamiliar task will yield low-hanging fruit probably means the person doesn’t know what he’s talking about.
  • In the long run, work is not more important than sleep.
  • At most companies, work-life balance is a sham. If work can claim hours after 5:00pm, then life should be able to claim hours before 5:00pm to regain the balance.
  • CVs might as well be tossed in the garbage. Everyone know they are exaggerations. To work at Basecamp, you have to be good people.
  • To evaluate someone, we put a real project in front of the candidates so that they can show us what they can do.
  • Be wary of senior people from large companies. Trying to teach a small company how to act like a big one rarely does anyone any good. Unlearning can be just as hard as having to pick up entirely new skills.
  • But be patient. Unless you hire someone straight out of an identical role at an identical company, they’re highly unlikely to be instantly up to speed and able to deliver right away.
  • Talent isn’t worth fighting over. Someone who’s a superstar at one company often turns out to be completely ineffectual at another, so a superstar somewhere else is not worth fighting for.
  • Talent at Basecamp rarely comes from traditional war zones like San Francisco or New York. More likely, it’s Oklahoma, Tennessee, or Toronto.
  • We look at people’s actual work, not at their diploma or degree.
  • It takes patience to grow and nurture your own talent.
  • Most people just don’t enjoy haggling, so Basecamp has a fixed salary structure. Everyone in the same role at the same level is paid the same.
  • Once every year we review market rates and issue raises automatically.
  • The goal at Basecamp is to pay everyone at the top 10 percent of the market for their role and level.
  • We get the market rates through a variety of salary survey companies.There’s also no penalty for relocating to a cheaper cost-of-living.
  • We don’t pay traditional bonuses, just a generous salary.
  • There are no stock options at Basecamp because we never intend to sell the company.
  • We’ve vowed to distribute 5 percent of the proceeds to all current employees if we ever sell the company.
  • There is profit-sharing. Basecamp distributes 25 percent of growth in profits to employees in that year.
  • Basecamp isn’t a startup. Basecamp is a stable, sustainable, and profitable company.
  • Happiness and productivity are found in working with a stable crew.
  • Free dinners are a hoax. A free dinner for working late sounds more like a bribes than a benefit.
  • We don’t offer gotcha benefits, only relevant “outside the office” benefits. Benefits: fully paid vacations, 3-day weekends all summer, paid sabbaticals, continuing education allowances, charity matching, CSA (community-supported agriculture) shares, one monthly massage, a monthly fitness allowance.
  • Offices should operates by library rules. The office should be quiet and calm. Conversations should be kept to a whisper.
  • The purpose of a vacation is to get away. We used to offer unlimited vacation, but we eventually noticed that people actually ended up taking less time off.
  • When someone leaves, be honest and clear with everyone about what just happened. At Basecamp, an immediate goodbye announcement is sent out companywide.
  • Following group chat at work is like being in an all-day meeting with random participants and no agenda. It’s completely exhausting. Chat puts conversations on conveyor belts that are perpetually moving away from you. Chat is great for hashing stuff out quickly.
  • The two rules for chat at Basecamp is “Asynchronous most of the time. Real-time only sometimes.” And if it’s important, slow down and take it offline to think.” Important topics need time.
  • A deadline with a flexible scope will result in a healthy, calm project.
  • When we present work, it’s almost always written up first. Then it’s posted to Basecamp, so people can have time to digest and respond, with a written respond on Basecamp. We don’t want first impressions.
  • Friday is the worst day to release anything.
  • Culture isn’t what you intend it to be. Culture is what culture does. What we do repeatedly hardens into habits and that becomes your culture.
  • Right from the beginning of Basecamp, we insisted on a reasonable workweek. We didn’t pull all-nighters to make impossible deadlines. When calm starts early, calm becomes the habit. If you start crazy , it’ll define you .
  • Today we ship a feature when it’s ready rather than waiting until all features are ready.
  • If every decision has to be made by consensus, you’re in for an endless grind. Someone in charge has to make the final call. Instead, get used to saying “I disagree but let’s commit.” Then move forward.
  • Knowing when to embrace Good Enough is what gives you the opportunity to be truly excellent when you need to be. Separate what really matters from what sort of matters from what doesn’t matter at all. Be clear about what demands excellence.
  • When we spend six weeks on a project, we begin prototyping as soon as we can in those first two weeks. As we pass the mid-point, it’s time to focus in and get narrow. New ideas that arrive too late will just have to wait.
  • “Doing nothing” should always be on the table. It’s too easy to fuck up something that’s working well. “What if we did nothing?”
  • Calm requires getting comfortable with “enough.” If it’s never enough, then it’ll always be crazy at work.
  • Every mature industry is drowning in “best practices.” So much of it is bullshit. There are so many reasons to be skeptical of best practices.
  • Unless you’ve actually done the work, you’re in no position to encode it as a best practice.
  • Many best practices are purely folklore. No one knows where they came from, why they started, and why they continue to be followed.
  • All this isn’t to say that best practices are of no value. Some are helpful to get you going, at which point you can abandon them as you need.
  • You can’t develop a calm culture if you’re constantly fretting about what the best practices. Create your practices and your patterns.
  • “Whatever it takes” is the rallying cry for captains of industry and war generals. Reasonable expectations are out the window when we operate according to “whatever it takes.” There certainly will be rare moments when whatever it takes is truly called for .
  • Rather than demand “whatever it takes,” ask , “what will it take?” Then decides if it’s worth it. Discuss strategy, make tradeoffs, make cuts, or come up with a simpler approach.
  • Too much shit to do is the problem if you’re obsessed with productivity hacks.  The only way to get more done is to have less to do. Saying no is the only way to claw back time.
  • “There is nothing so useless as doing efficiently that which should not be done at all .” — Peter Drucker
  • At Basecamp, we’ve become ruthless about eliminating wasteful tasks.
  • Nearly all product work at Basecamp is done by teams of three people. The team is usually two programmers and one designer. We don’t throw more people at problems, we chop problems down to size. Big teams make things worse all the time.
  • Work expands to fill the time available. Work expands to fill the team available. You can do big things with small teams.
  • Rather than jumping on every new idea right away, we make every idea wait a while. First we finish what we started, then we consider what we want to tackle next. New ideas can wait.
  • Learning to say no is a required skill if you want to be calm.
  • We’ll take a risk, but we won’t put the company at risk.
  • When we make big changes to Basecamp, we give it six months and see how it turned out. We’ll tweak it along the way. We’ll be ready to revert if needed. We prefer managed, calculated risk with a safety rope attached.
  • In the summer, we work 4 day, 32 hour weeks.
  • In the autumn, we pay for a weekly community-supported agriculture share for each employee .
  • Until you’re running a profitable business, you’re slowly (or quickly) running out of business. We focus on keeping out our costs in check.
  • Being profitable means having time to think and space to explore. Being profitable means being in control of your own destiny and schedule.
  • When companies are in the red, employees worry about their jobs. When companies talk about burn rates, two things are burning: money and people.
  • Selling to small businesses and selling to enterprises are two very different approaches requiring two very different kinds of people.
  • Learn to launch. Generally, you just have to ship it. Do your best, believe in the work you’ve done, and ship it. After you ship, you can iterate on real insights and real answers from real customers.
  • We’ve never committed to a product road map. Promises in a product road map pile up like debt. Promises are easy and cheap to make, while actual work is hard and expensive.
  • We’ve been ripped off and cloned a hundred times. We’ve learned you have to move on.
  • People don’t hate all change. What customers and employee don’t like is forced change. We still run three completely different versions of Basecamp, so that customers don’t have to change if they don’t want to.
  • Things get harder as you go, not easier. The easiest day is day one of a new company. As you get bigger, you hire people, there is more competition, and there are increased costs.
  • When it comes to complaints, remember that, mostly, everyone wants to be heard and respected.
  • Companies are culturally and structurally encouraged to get bigger and bigger. But the good old days, the founders miss, are when their business was simpler and smaller.
  • We wonder why didn’t they just grow slower and stay closer to the size they enjoyed the most?
  • Our goal is to maintain a sustainable and manageable size. We still grow, but slowly and in control.
  • We chose calmness, so we cut back on products and features, even when times are great. Cutting back when times are great is the luxury of a calm, profitable, and independent company.
  • A successful business is healthy profits, increased benefits for our employees, and an environment where people can do the best work of their careers.
  • Choose to: protect people’s time.
  • Choose to: work reasonable number of hours.
  • Choose to: relieve people from the conveyor belts of information.
  • Choose to: give employees the focus that their best work requires.
  • Choose: contemplation and consideration prior to communication.
  • Choose to: give endless growth a rest.
  • Choose to: give teams control over what can be reasonably accomplished given the time.
  • Choose to: finish what you started before moving on to the next idea.
  • A calm company is a choice

Rework by Jason Fried

You don’t have to work miserable 60 / 80 / 100 – hour weeks to make it work. You don’t even need an office.

Ignore the real world. It’s a place where new ideas , unfamiliar approaches , and foreign concepts always lose .

Learn from your successes. Failure is not a prerequisite for success.

Long-term business planning is a fantasy. You have to be able to improvise. This isn’t to say you shouldn’t think about the future or contemplate how you might attack upcoming obstacles. That’s a worthwhile exercise. Just don’t feel you need to write it down or obsess about it. Working without a plan may seem scary. But blindly following a plan that has no relationship with reality is even scarier.

Why grow? Why is expansion always the goal? You’ll need a better answer than “economies of scale.” Grow slow and see what feels right. Premature hiring is the death of many companies. Once you get big, it’s really hard to shrink without firing people, damaging morale. Runs a business that’s sustainable and profitable.

Workaholism is stupid. Working like crazy just isn’t sustainable. Workaholics try to make up for intellectual laziness with brute force. Workaholics create guilt and poor morale among their coworkers. You end up just plain tired. No one makes sharp decisions when tired. The real hero is already home because she figured out a faster way to get things done.

Instead of entrepreneurs, let’s just call them starters.

To do great work, you need to feel that you’re making a difference. This doesn’t mean you need to find the cure for cancer.

Scratch your own itch.

Start by making something, now. What you start is what matters, not what you think or say or plan to start. Ideas are cheap and plentiful.

The most common excuse people give: “There’s not enough time.” There’s always enough time if you spend it right.

Keep in mind why you’re doing what you’re doing. A strong stand is how you attract superfans, not just customers. Also, when you stand for something, decisions are obvious. Ex: Whole Foods.

Be authentic with your mission statement. Having an authentic mission statement means truly standing for something.

Outside money is Plan Z. When you take outside money, you give up control. The pursuit of “cashing out” begins to trump building a quality business. Spending other people’s money is addictive. Customers move down the totem pole. Raising money is incredibly distracting. You start having meetings with your investors and / or board of directors.

You need less than you think. There’s nothing wrong with being frugal. Great companies start in garages all the time.

Start an actual business not a startup. Actual businesses worry about profit from day one.

You need a commitment strategy, not an exit strategy. You’ll be able to focus on getting customers to love you, instead of getting acquired.

Be the smallest, the leanest, and the fastest. Avoid: excess staff, meetings, thick process.

Constraints are actually advantages in disguise. Southwest — unlike most other airlines, which fly multiple aircraft models, flies only Boeing 737s. Because of this, Southwest has lower costs and a business that’s easier to run.

You just can’t do everything you want to do and do it well. Sacrifice some of your darlings for the greater good. Getting to great starts by cutting out stuff that’s merely good .

There’s the stuff you could do, the stuff you want to do, and the stuff you have to do. Find out what’s essential and focus all your energy on making it the best it can be.

Ignore the details early on. Nail the basics first and worry about the specifics later. We sketch out ideas with a big, thick Sharpie marker, instead of a ballpoint pen.

Long projects zap morale.

Be a curator. Constantly look for things to remove, simplify, and streamline.

Gordon Ramsay’s first step is nearly always to trim the menu. When things aren’t working, cut back.

Focus on what won’t change. The core of your business should be built around things that won’t change. Things that people are going to want today and ten years from now. Those are the things you should invest in. Eg. Amazon and Japanese automaker focus on core principles.

It’s not the gear that matters. Content is what matters.

Launch now. Once your product does what it needs to do, get it out there. When you impose a deadline, you gain clarity.

Instead of describing what something looks like, draw it. Get to something real (a prototype) right away because people need to see something to start working on it.

Sometimes abandoning what you’re working on is the right move.

Interruption is the enemy of productivity. Long stretches of alone time are when you’re most productive. Use email, over chat/meetings/call, as much as possible.

Meetings are toxic. The true cost of meetings is staggering.

If you must have a meeting, follow these simple rules: set a timer, invite as few people as possible, always have a clear agenda, meet at the site of the problem, end with a solution.

Good enough is fine. Aim for maximum efficiency with minimum effort. Problems can usually be solved with simple, mundane solutions. When good enough gets the job done, go for it.

Quick wins. Momentum fuels motivation. No one likes to be stuck on an endless project. The longer something takes, the less likely it is that you’re going to finish it. Small victories let you celebrate and release good news. Ask: “What can we do in two weeks?”

Don’t be a hero. If you already spent too much time on something that wasn’t worth it, walk away. You can’t get that time back.

Forgoing sleep is a bad idea.

We’re all terrible estimators. Estimates that stretch weeks, months, and years into the future are fantasies. The solution : Break the big thing into smaller things.

Start making smaller todo lists. Prioritize visually. Put the most important thing at the top.

Make tiny decisions by breaking up big decisions. Smaller, attainable goals like that are the best ones to have .

Don’t copy. Copying skips understanding — and understanding is how you grow. When you copy, you never lead, you always follow.

Make you part of your product or service. Zappos sets itself apart by injecting CEO Tony Hsieh’s obsession with customer service into everything it does. Polyface sells the idea that it does things a bigger agribusiness can’t do .

Being the anti – ______ is a great way to differentiate yourself and attract followers. Having an enemy gives you a great story to tell customers, too.

Underdo your competition. Solve the simple problems and leave the hairy, difficult, nasty problems to the competition.

It’s not worth paying much attention to the competition. Focus on competitors too much and you wind up diluting your own vision. Focus on yourself instead.

Say no by default. Use the power of no (to certain customers) to get your priorities straight. Recommend a competitor if you think there’s a better solution out there.

Let your customers outgrow you.

Don’t confuse enthusiasm with priority. The enthusiasm you have for a new idea is not an accurate indicator of its true worth.

To create a product that exceeds expectation, you might need to promise a bit less. Over-promising and under-delivering is like a one-night stand. You don’t want a one-night stand with your customers, you want a long-term relationship.

Being obscure is a great position to be in. When you’re obscure, you can try new things. No one knows you, so it’s no big deal if you mess up.

Build an audience. An audience can be your secret weapon. Every day they come back to see what we have to say. When you build an audience, you don’t have to buy people’s attention — they give it to you. Share information that’s valuable and you’ll slowly but surely build a loyal audience.

Teaching probably isn’t something your competitors are even thinking about. Etsy teaches. Gary Vaynerchuk teaches. Teach and you’ll form a bond you just don’t get from traditional marketing tactics.

Give people a backstage pass and show them how your business works. People love finding out the little secrets of all kinds of businesses.

Don’t be afraid to show your flaws. Imperfections are real and people respond to real.

Press releases are spam. Instead, call someone. Write a personal note.

Forget about the Wall Street Journal. You’re better off focusing on getting your story into a trade publication or picked up by a niche blogger.

Marketing is something everyone in your company is doing 24 / 7 / 365.

The myth of the overnight sensation. Dig deeper and you’ll usually find people who have busted their asses for years. It’s hard, but you have to be patient. Starbucks, Apple, Nike, Amazon, Google, and Snapple all became great brands over time, not because of a big PR push upfront. Start building your audience now.

Never hire anyone to do a job until you’ve tried to do it yourself first.

The right time to hire is when there’s more work than you can handle for a sustained period of time.

Pass on hiring people you don’t need, even if you think that person’s a great catch. Don’t worry about “the one that got away.”

Hire slowly. Hire a ton of people rapidly and a “strangers at a cocktail party” problem where everyone tries to avoid any conflict or drama. No one says, “This idea sucks.”

We all know resumés are a joke. The cover letter is a much better test than a resumé.

There’s surprisingly little difference between a candidate with six months of experience and one with six years. How long someone’s been doing it is overrated. What matters is how well they’ve been doing.

Don’t fall into the trap of thinking you need someone from one of the “best” schools in order to get results.

With a small team, you need people who are going to *do* work, not *delegate* work. Avoid hiring delegators. Delegators love to pull people into meetings ,

Hire managers of one. They don’t need a lot of hand-holding or supervision. They’ve run something on their own or launched some kind of project .

Hire great writers. If you are trying to decide among a few people to fill a position, hire the best writer. Clear writing is a sign of clear thinking .

It’s crazy not to hire the best people just because they live far away. To make sure your remote team stays in touch, have at least a few hours a day of real-time overlap. Meet in person once in a while .

Test out employees. You need to evaluate the work they can do now, not the work they say they did in the past. Hire them for a mini-project.

Own your bad news. When something bad happens, tell your customers.

Getting back to people quickly is probably the most important thing you can do when it comes to customer service.

A good apology accepts responsibility. If you’ve built rapport with customers, they’ll cut you some slack and trust you when you say you’re sorry.

Put everyone on the front lines. Good restaurants sometimes have chefs work out front as waiters for a stretch. Listening to customers is the best way to get in tune with a product’s strengths and weaknesses. The more people you have between your customers ’ words and the people doing the work, the more likely it is that the message will get lost or distorted along the way.

After you introduce a new feature , change a policy , or remove something , knee – jerk reactions will pour in. Ride out that first rocky week. Make sure you don’t foolishly backpedal on a necessary but controversial decision. Let them know you’re listening .

You don’t create a culture. It happens .

Culture is the byproduct of consistent behavior. If you treat customers right, then treating customers right becomes your culture. So don’t worry too much about it. Don’t force it. You can’t install a culture. Like a fine scotch, you’ve got to give it time to develop.

Don’t make up problems you don’t have yet. Most of the things you worry about never happen anyway. Optimize for now and worry about the future later. The ability to change course is one of the big advantages of being small.

Skip the rock stars. The environment has a lot more to do with great work than most people realize. Rockstar environments develop out of trust, autonomy, and responsibility.

When everything constantly needs approval, you create a culture of non-thinkers. Realize that failing to trust your employees is awfully expensive .

Send people home at 5. You shouldn’t expect the job to be someone’s entire life.

Policies are organizational scar tissue. Don’t create a policy because one person did something wrong once. Policies are only meant for situations that come up over and over again.

Talk to customers the way you would to friends. Avoid jargon. Don’t talk about “monetization” or being “transparent;” talk about making money and being honest.

Write to be read, don’t write just to write. Whenever you write something, read it out loud. When you’re writing, think of the person who will read your words.

Four-letter words you should never use in business: need, must, can’t, easy, just, only, and fast. Need: very few things actually need to get done. Can’t: you probably can. Easy: people rarely say something they have to do is easy.

Stop saying ASAP: when everything is high priority, nothing is.

The Score Takes Care of Itself by Bill Walsh

The Big Idea: focus on fundamentals and execution (The Standard of Performance), instead of focusing on the score and on the competition.

Part I: My Standard of Performance

  • Failure is a part of success. Everyone gets knocked down.
  • The Standard of Performance is the set of core values, principles, and ideals that define the organization. Implementing the Standard of Performance is more important than any strategies and tactics you might implement.
  • Bill Walsh wanted the 49ers to be the pinnacle of professionalism in the NFL.
  • Practices were precise and demanding, never sloppy.
  • Continuous improvement was more important than victory.
  • Character, intelligence, work ethic, and fit was more important than raw talent.
  • The leader’s job is to teach and to encourage everyone else to teach.
  • Champions behave like champions before they are champions.
  • If you place a premium on fundamentals and consistent execution, you can perform reliably in big games and in big moments.

Part II: Innovation, Planning, and Common Sense

  • Innovation is often born out of necessity and resourcefulness.
  • Always be quick to share credit (and accept blame.)
  • Contingency planning was one of the 49ers’ secret weapons. Be prepared for anything. Hail Mary’s are not a strategy.
  • Analyze your vulnerabilities and take action to counter or protect them.
  • The truth is hidden in the numbers. Follow key metrics more closely then big milestones or wins/losses.

Part III: Fundamentals of Leadership

  • There are many equally valid leadership styles.
  • The common trait, however, is an indomitable will to succeed.
  • Know when to persevere and know when to quit. It’s a delicate balance that requires distinguishing a good plan from a bad plan.
  • Sweat the small stuff, but only the small stuff that actually matters.
  • Leaders must be both subject matter experts and delegation experts.
  • Leaders teach others and show the entire organization how to teach each other.
  • You don’t need to shout, stomp, and strut to be a good leader. Joe Montana was a quiet but incredibly effective leader.
  • Treat people like people.
  • Maintain a positive atmosphere.
  • Know that humor has its place.
  • Give no VIP treatment.
  • Show interest in your people and their families.
  • Don’t let animosity linger.
  • Praise is more powerful than blame.
  • Discipline is based on pride in the profession and attention to details.
  • Officers must be seen on the front lines during action.
  • Bill Walsh’s praise was sparse but meaningful.
  • Employees thrive in an environment where they know exactly what is expected of them.
  • Don’t mistake activity for achievement. — John Wooden
  • Being a good listener is the key to good communication.
  • Don’t let rank, titles, or status impede open communication.
  • Leadership is about teaching skills, attitudes, and goals to the organization.
  • Persistence is essential because knowledge is rarely imparted on the first attempt. You must drill over and over.

Part IV: Essentials of a Winning Team

  • High expectations of your team are the key to winning.
  • Let your people know they are part of something special.
  • You are only as good as your people, so hire only the best.
  • Traits to look for in hires: skills, energy and enthusiasm, ability to spot talent, ability to communicate, loyalty to others.
  • How to keep people working well together: clear expectations, open communication, flexibility in method (but not core values), alignment with core values.
  • Be aware that success can breed over-confidence and complacency.
  • Place a premium on people who exhibit great desire to push themselves. (Ronnie Lott and Roger Craig)
  • Ego can kill an organization.
  • Never ignore the front-line (guys in the trenches) because they will generally pave the way to success or failure.
  • The most powerful way to maximize someone’s potential is to say, “I believe in you.”
  • There are times to sprint, but success is more like a marathon than a sprint.
  • You can’t teach work ethic or willpower.
  • Don’t waste energy on enemies.
  • Focus on the process, not the prize.
  • Make your own mentors by seeking out experts and asking questions.

Part V: Looking For Lessons in My Mirror

  • Jerry Rice and Joe Montana are in the Hall of Fame because of their focus on fundamentals.
  • The starting point for everything is work ethic.
  • Teach your team how to teach their team. Build an organization of teachers.
  • What goes around comes around. Treat people well.
  • Know how to delegate well.
  • Eliminate bad hires or toxic people quickly and compassionately.
  • The best marketing strategy is to build a good product.
  • Don’t expect quick results. Building a winning organization takes time.

Good to Great by Jim Collins

The Big Idea: 

Chapter 1: Good is the Enemy of Great

  • Good to Great companies always had Level 5 Leaders.
  • Recruit the right people before choosing a direction/mission/vision/strategy.
  • Confront the brutal truth and move forward anyways.
  • Stick to your core.
  • Create a culture of discipline.
  • Use technology as an accelerator of existing greatness.
  • Focus on small, continuous progress, not grand transformations.

Chapter 2: Level 5 Leadership

  • Level 5 leaders are a paradoxical blend of personal humility and professional will.
  • Level 5 leaders put their company and their team before themselves.
  • Level 5 leaders are fanatical about results, not credit.
  • Level 5 leaders come from within the company, not from outside.
  • Level 5 leaders display workmanlike diligence, not celebrity charisma.

Chapter 3: First Who…Then What

  • Hold out for the best talent.  Don’t lower your hiring standards.
  • Hire slow, fire fast.  Then strive to zero turnover.
  • Don’t rely on one genius leader.  Have lots of great minds on board.
  • There is no right answer for how to structure executive compensation.  Just make sure it makes sense. The right people will deliver the best results, regardless of the compensation structure.
  • You can create an environment that attracts the best people, but no compensation structure will turn poor performers into rock stars.
  • Hire for attitude and character than for specific knowledge and skills.
  • The best companies build great teams.  They don’t work their people to the bone.

Chapter 4: Confront the Brutal Facts

  • Don’t be afraid to look at the brutal facts.
  • Create a culture that embraces truth and honesty.
  • Ask a lot of question and engage in open dialogue.
  • When something doesn’t work, take responsibility, figure out why but don’t blame others.
  • Pay attention to key metrics so you know early when something is wrong.
  • Regardless of the situation, have unwavering faith that the team will find a way to succeed.
  • The three circles are: what are you deeply passionate about? What can you be the best in the world at?  What drives your economic engine?

Chapter 5: The Hedgehog Concept

  • Focus on the essentials and ignore the rest.
  • You will success if you can identify one simple concept that is good and execute it fanatically.
  • Eg. Walgreens key metric: profit per customer visit; Wells Fargo had profit per employee; Fannie Mae had profit per unit of risk; Kroger had profit per local population.
  • Everyone has strategic plans, but the good-to-great companies are more likely to be based around a simple idea.
  • Three key questions that define the hedgehog concept: what are you deeply passionate about, what can you be the best in the world, what drives your economic engine?
  • Don’t focus on mindless pursuit of growth. Focus on your core business, defined by your hedgehog concept.

Chapter 6: A Culture of Discipline

  • Startups often fail because they hire too many new people, acquire too many new customers, launch too many new products.
  • Things become too complex and problems start to surface.
  • Fast-growing startups will hire professional managers to reign in the mess, but also kill the entrepreneurial spirit.
  • Instead of installing bureaucracy to compensate for incompetence and lack of discipline, hire the right people in the first place.
  • Avoid bureaucracy and hierarchy and instead create a culture of discipline.
  • Build a culture around the idea of freedom and responsibility, within a framework.
  • Fill that culture with self-disciplined people who are willing to go to extreme lengths to fulfill their responsibilities.
  • Create a stop-doing list and focus on the hedgehog concept.
  • Develop a system and manage the system.  Don’t manage the people.
  • Culture beats great individual leadership.
  • A culture of discipline prevents you from expanding outside of your core.
  • A culture of discipline prevents you from an inflated overhead and layers of waste.

Chapter 7: Technology Accelerators

  • Be selective about which technologies you adopt.
  • Make sure your technology supports your hedgehog concept.
  • Technology by itself is never the primary cause of success or failure.
  • Reliance on technology can give you a false sense of invulnerability.

Chapter 8: The Flywheel and the Doom Loop

  • Success is an organic, cumulative process.  It never happens overnight.
  • Success takes patience and discipline.
  • Focus on continuous, incremental improvement, not miraculous transformations.
  • Once there is visible progress, keep the momentum going.  It is infectious.

Chapter 9: From Good to Great to Built to Last

  • The central concept of Built to Last: discover your core values and purpose beyond just making money (core ideology) and combine this with the dynamic of preserve the core/stimulate progress.
  • Hewlett Packard started with “who” before ever deciding what they would build (“what”.)
  • Walmart had taken 25 years to get to 38 stores, patiently defining their hedgehog concept.
  • Profits and cash flow are like blood and water.  They are necessary for life, but they are not the purpose of living.
  • Built To Last 1. Clock Building not Time Telling: culture and systems > single great leader/idea
  • Built to Last 2. Genius of AND: purpose AND profit, continuity AND change
  • Built to Last 3. Core Ideology: core values and purpose
  • Built to Last 4. Preserve the Core/Stimulate Progress: (except for core values) constant change, innovation, experimentation

High Output Management by Andy Grove

The Big Idea: Understand the principles of factory production and apply them to business management.

Chapter 1: The Basics of Production

  • Focus efforts on identifying and fixing the bottleneck (limiting step) in the workflow

Chapter 2: Managing The Breakfast Factory

  • Define good KPI’s.
  • Understand JIT inventory management.
  • Automate things to improve work leverage.

Chapter 3: Managerial Leverage

  • Judge a manager by the results of his team.
  • Results are what matter; not effort.
  • Most of a manager’s time is spent acquiring information, which is critical to making good decisions.
  • The most important resource for a manager is his time.
  • Being prepared for meetings saves a lot of other people’s time.
  • Investing time preventing someone important from quitting saves lots of time finding a replacement.
  • New employee orientations are important to do well since new employees are most impressionable.
  • Meddling too much can hurt performance in the long-run.
  • Delegation is another way to improve leverage.
  • When you delegate, you must still monitor and follow up.
  • When reviewing reports, ask to see the rough draft to add feedback as early as possible.
  • Batch similar tasks together to save time.
  • Use your calendar to manage your work and minimize interruptions.
  • Have some free-time projects to tackle during downtime.
  • Six to eight subordinates is about right.
  • Minimize interruptions and documenting FAQs, delegating, batching, and having fast access to information (KPI).

Chapter 4: Meetings

  • Meetings have a bad name, but they add lots of value if done well.
  • Regular meetings allow managers to batch decisions and batch information sharing.
  • One-on-ones are great for teaching, sharing information, and building relationship.
  • One-on-ones can start out weekly and move to monthly.
  • One-on-ones should be about an hour.
  • Staff meetings are to discuss issues and offer solutions.
  • Staff meetings should have an agenda and an open discussion session.
  • Mission oriented meetings are ad-hoc and designed to produce a key decision.

Chapter 5: Decisions

  • Be wary of groupthink in group decisions.
  • Be wary of peer-plus-one in group decisions, where everyone automatically agrees with the senior manager’s opinion.

Chapter 6: Planning

  • Understand basic factory production principles.
  • Apply Management By Objectives (Key Objective, Key Results) and review every quarter or every month.

Chapter 7: The Breakfast Factory Goes National (Scaling)

  • The central tradeoffs when scaling is centralization/decentralization.  (Buddhism/Catholicism in Scaling Up Excellence.)

Chapter 8: Hybrid Organizations

  • Mission-oriented companies are completely decentralized.  Units work towards the mission but operate independently.
  • Functional companies are completely centralized.
  • Most companies are a hybrid of mission-oriented and functional.

Chapter 9: Dual Reporting

  • Matrix management means employees can have two supervisors (their business unit supervisor and their functional unit supervisor.)
  • For example: a controller can report to the CFO and also to the business unit general manager.

Chapter 10: Modes of Control

  • Sometimes you will motivate by money, sometimes by contract, and sometimes by shared cultural values.

Chapter 11: The Sports Analogy

  • Management is a team activity.
  • Employee performance is a function of training and motivation.
  • Understand where on Maslow’s Hierarchy the employee is at.
  • Most people are competitive and motivation is a given in competitive sports, so try and turn work into a game by providing instant feedback and metrics.

Chapter 12: Task-Relevant Maturity

  • Provide detailed instructions to an inexperienced employee.
  • Establish monitoring and then give experienced employees freedom and autonomy.

Chapter 13: Performance Appraisals

  • Performance reviews are absolutely necessary.
  • Level, listen, and leave yourself out.
  • Document everything.
  • Give the review in writing, first, and then meet later in person to review.

Chapter 14: Two Difficult Tasks

  • Interviewing is just about impossible.
  • Do everything you can to save a valued employee who wants to quit.

Chapter 15: Compensation as Task-Relevant Feedback

  • Some employees view salary as a means to pay for living expenses.  Some employees view salary as a measuring stick to compare to others.
  • Performance bonuses should be partly individual, partly team, and partly organization.
  • Performance bonuses should be linked to objective metrics.

Chapter 16: Why Training Is the Boss’s Job

  • Don’t hire external trainers to train employees if you can do it yourself.
  • Managers should learn how to teach a formal course to employees.

 

Scaling Up Excellence 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?