Built to Last

Built to Last: Successful Habits of Visionary Companies by Jim Collins and Jerry I. Porras is the conclusion of 6 years of research by the authors on the best companies out there. They call them ‘visionary’ companies. Among the few that have made the cut, and have survived over decades, are Walt Disney, IBM, and Sony. The book has become an instant management classic and now 19 years after its conception is still ever relevant.

In Built to Last the authors have compared the visionary companies with similar companies that have been operating in the same industry and for the same time. They call them the runners-up or the silver medal winners of the industry. They have good reasons for comparing the two types of companies. Only by comparing the good and the great you can differentiate between what works good and what works better. Without using a control group (the silver medal companies) they could just as easily have stated that buildings (which all of the great companies have) are the determining factor for their success.

What makes the 18 identified companies so great? It is vision, one which has guided most of these companies for up to a hundred years. A vision that is conceptualized in Big, Hairy, Audacious, Goals (BEE-hags). It is a goal that is not achievable in the near future, or even in the next few years. It is a goal that does not have a 100% success rate, but that inspires the whole company none the less. Two examples are from Ford: Democratize the automobile, and Philip Morris: Become the front-runner in the tobacco industry.

Next to the BEE-hags, the book also elaborates on other things great companies do. There is an emphasis on building the foundations, so that your subsequent work can be flexible around a steady core. Make the company itself the ultimate product, not the product. Products all end up obsolete and by having a focus on the company, it will remain standing. Build the company around a core ideology, a purpose beyond making money (eg. 3M’s commitment to innovation). And imprint this culture with all your employees (building a cult-like culture).

There are many more examples in the book, and practices that are as knowledgeable as convenient. But what is most important is that you look beyond the dilemma of the or and embrace the power of the and. Having a steady core and being the most innovative company are not two sides of the same coin, both statements can be true for the same company. This leads me to reflect on the 3rd Alternative by Stephen R. Covey, and note that both books share the same positive philosophy.

On a more critical note, people have taken a close look at the companies that are reviewed in the book. And the conclusions are far from great, some are no longer industry leaders and do not seem to follow a certain ideology or BEE-hag at this time. There have also been doubts about the scientific methods used by the authors and how the companies got selected. But what stands above questioning is the inspirational power that comes forth from the book. Having a vision, a BEE-hag to aspire too and thinking with and can do wonders to starting, established and mega corporations. It gets a 5 out of 6 rating.

The Book:

Built to Last: Successful Habits of Visionary Companies – Jim Collins and Jerry I. Porras – ISBN-10: 0060516402 | ISBN-13: 978-0060516406

More on Built to Last:

http://www.jimcollins.com/article_topics/articles/building-companies.html – Jim Collins on Building Companies to Last

http://en.wikipedia.org/wiki/Big_Hairy_Audacious_Goal – Wikipedia on BEE-hags

http://www.fastcompany.com/50992/was-built-last-built-last – Fast Company on Timelessness of Built to Last

The Upside of Irrationality

The Upside of Irrationality: The unexpected benefits of defying logic at work and at home by Dan Ariely is an excitingly, new and positive view on the irrational behaviour of men. Through several decades of studying the behaviour of people, Dan Ariely has accumulated a vast body of knowledge on the irrational behaviour we showcase every day. He takes us on a journey of the strange findings he and other colleagues have found, and elaborates on how we can think of the positive effects these irrationalities can have.

Also see Predictably Irrational.

The book is subdivided into two distinct parts, the first about irrationality at work, the second about irrationality at home. It features grasping aspects of subjects like the topic of big bonuses, why we enjoy work, and why we overvalue what we make ourselves. In the home domain adaption is explained (both to positive and negative events), online dating debunked, and emotions put under the loop. Ariely does a fine job of combining both experiment and real-life examples for all domains that make it easier to grasp the sometimes counter-intuitive concepts and findings.

To give an example is the effect of bonuses on the productivity of workers. In an experiment where they gave people large bonuses (1 day, 1 week, 1 month approximately) most people expected for performance to go up. When you think about it, you would be more motivated to work for more money, and definitively be attracted to a job where bigger bonuses are more common. This conclusion for motivation does hold true, performance, however, did not increase. Not even slightly, it decreased when the bonuses grew bigger. One of the explanations for this effect is the increased pressure from which people start to perform sub-optimal (imagine an inverse U-shape in which the stress level is so high the performance decreases when reaching over the middle level).

Dan Ariely has a right position to be speaking about these irrational phenomena, as a behavioural economist, his field covers everything from business to psychology. As a professor at Duke University, he is an utmost productive researcher and has also written an earlier book about irrationality named Predictably Irrational: The hidden forces that shape our decisions (2008).

When reflecting on reading the novel one comment can be made. The preface makes it look like there is a vast amount of good news, and that the book will summarize all the positive findings about irrationality. It, however, does not shy away from the negative side of irrationality and shows how bad decisions can be made because of irrational behaviour. This does not hinder the quality of the book in any way but may confront us people more with our faults than we might have wanted to have been.

The Book:

The Upside of Irrationality: The unexpected benefits of defying logic at work and at home – Dan Ariely– ISBN-10: 0061995045 | ISBN-13: 978-0061995040

More on The Upside of Irrationality:

http://www.harpercollins.com/browseinside/index.aspx?isbn13=9780061995033 – Index of The Upside of Irrationality

http://danariely.com/ – Blog by Dan Ariely

http://www.freakonomics.com/2010/09/21/the-upside-of-irrationality/ – Ian Ayres on The Upside of Irrationality (review)

http://www.youtube.com/watch?v=dPQj547KXPE – Videos by Dan Ariely on The Upside of Irrationality

Predictably Irrational

Predictably Irrational: The Hidden Forces that Shape Our Decisions by Dan Ariely exposes how we, with all our fallibility, make decisions. We, as rational agents, like to believe that we can (and do) make calculated decisions based on reasoning. But at the same time, we know from experience that not all of the time do we act accordingly to this principle. Through both personal stories, illuminating examples, and a new and exciting field of research, Dan Ariely gives the reader an insight into our irrational behaviour.

Irrationality is not random. There are several components that make for irrational decisions. The first is relativity. In evolution, it has been very handy to compare things relative to each other. Seeing if we should take route A or B, only calculation the differences and ignoring all things equal has reduced computing in our brain to only the necessary input. But this mechanism can also easily be hijacked. Imagine for instance route A and B have two attributes they differ on (one being better on attribute 1, the other on attribute 2). When you throw in route C, which is slightly worse on attribute 1 than route A, but equally worse on attribute 2 as route A is compared to B, you will be tempted to choose option A. Route C has acted as a decoy, accentuating route A whilst in fact it was comparable to route B.

As people, we are also disproportionately attracted to things that are free. In a clever experiment, Ariely set up a cookie shop in two malls. In the first, he priced some expensive cookies at 1.10 dollar, the cheaper cookies at 10 cents. In the other case, he decreased the price to make it 1 dollar and FREE. ‘Sales’ of the FREE cookies rose disproportionately. This is the power of free and can have a significant influence on both your buying decisions and businesses. For you, it means you will be more likely to buy that expensive TV if it has a free PS4 that goes with it. For businesses they can expect people to consume much more when you offer something for free.

There are so many topics discussed in the book that an example of each would make this review irrationally large. Some of the topics are; the influence of arousal, the high price of ownership, keeping doors open, the effect of expectations, and beer and free lunches. In a mix of groundbreaking research and real-life examples, Ariely takes the reader on a tour of his lifetime of research. Anyone with an interest in psychology, behavioural economics or our irrationality in general, should read this as soon as possible.

The Book:

Predictably Irrational: The Hidden Forces that Shape Our Decisions – Dan Ariely – ISBN-10: 9780061353246| ISBN-13: 978-0061353246

More on Predictably Irrational:

https://floriswolswijk.com/upside-of-irrationality/ – Review of The Upside of Irrationality

http://danariely.com/ – Blog by Dan Ariely

http://www.youtube.com/watch?v=JhjUJTw2i1M – Dan Ariely on our irrationality

The 3rd Alternative

The 3rd Alternative: Solving life’s most difficult problems by Stephen R. Covey is the accumulation of a life’s work on leadership, cooperation and achieving greatness. The book centres around the 3rd alternative thinking. To not think in 1) my way or 2) their way, but to 3) achieve synergy together (our way).

This book can be seen as a natural extension of The Seven Habits of Highly Effective People. Especially the second part about win-win situations and other strategies around cooperation.

What makes the book so special is the setup of the chapters. Already in chapter 2 the theory of the 3rd alternative is explained very extensively. You are introduced to concepts as ‘seeing you’, to listen empathically and really understand the other person. And also to let your mind accept a third alternative, to get rid of the idea of finite resources but to see an infinite amount of new possibilities when you work together.

The other chapters are all devoted to explaining what the 3rd alternative thinking encompasses in different facets of life. One chapter is about work, the next about home, school, law, society, world and life in general. It gives you helpful examples of applying the paradigm to your own life, and every aspect of it.

One example from the book is about an executive at a pharmaceutical company. They are struggling with sales and have as many as 8 people calling the same doctor with the same story, there is a gap between what they want (selling as much product as possible) and what the doctor needs to do (helping patients, not being busy with the 8 sales representatives). He changes the ‘we and them thinking’ into a synergistic approach. He stops pushing the product onto the doctors, but starts asking them questions about their needs, how can they help the patients? In this way he discovers that patients do not take the medicine when they have to, thus making the treatment less effective. And from there he starts a new strategy with convenience in mind, with a clear vision on how to get patients to take the medicine when needed, thus also helping the doctors, and sales follow naturally.

One key aspect of the book is listening. To stop for one second to speak up and shut up. To really hear what someone has to say, and know what drives him/her to say it. By this, you create opportunities that neither you or the other person had initially thought of, and achieve solutions that add value.

The book is a comprehensive guide into 3rd principle thinking and I would consider it to be a must-read for about anyone who needs to work with others (and who doesn’t). In the competitive world of today a win-lose or lose-win approach is no longer viable and to get ahead you need to see the synergistic solution. Whilst it is a great read, the real value of the book is to apply it in your daily life, at work and at home.

The Book:

The 3rd Alternative: Solving live’s most difficult problems – Stephen R. Covey – ISBN-10: 1451626274 | ISBN-13: 978-1451626278

More on The 3rd Alternative:

http://en.wikipedia.org/wiki/Synergy – Wikipedia on synergy

http://www.youtube.com/watch?v=GXfuVqREiag – Stephen R. Covey on the 3rd alternative

http://www.linkedin.com/today/post/article/20130315125605-32175171-5-ways-to-encourage-creative-thinking – James Caan on creative thinking

Everyday Greatness

Everyday Greatness: Inspiration for a meaningful life by Stephen R. Covey is a compilation of inspiring stories that centre around three choices. The stories are compelling and heartfelt, sometimes about world-changers, others about personal heroes.

The three choices are 1) to act – to activate the energy inside you, 2) of purpose – giving direction to your energy, and 3) for principles – the means for attaining your goals. These are incorporated into each story, who are grouped together with three per topic or principle.

Some of these topics include; taking charge, creating the dream, overcoming adversity, and blending the pieces. One example is the tale of Walt Disney, who had a vision of creating Walt Disneyland. The story elaborates on his youth where he got his inspiration from, but also on the start of his career and the numerous rejections he had to face. It tells a story of following your dream, even when it is not even realizable with the technology of the day.

While Stephen Covey is named the author, also David K. Hatch can be attributed a lot of the credits as the compiler of the book. He has done an amazing job of combining stories of leaders from every field of life and giving them all a very human and personal voice. A final touch of greatness are the quotes at the end of every chapter that further highlight the virtues discussed.

The novel is a big but very comprehensible read. The path you take through the book is not set in stone and you can decide to read only the chapters and stories that appeal to you most. That is also the strength of its re-readability, within only a few minutes you can refresh your memory and get back into giving back goal, direction and principles to your life.

The Book:

Everyday Greatness: Inspiration for a Meaningful Life – Stephen R. Covey – ISBN-10 0785289593 | ISBN-13: 978-0785289593

More on Everyday Greatness:

http://www.adversityadvantage.com/ – Paul G. Stoltz and Erik Wiehenmayer on climbing your 7 summits

Built to Sell

Built to Sell by John Warrillow explores the do’s and don’ts of building your company so that it has maximum value for selling. The book takes you on a journey with Alex, an advertising business owner for 8 years. Through him you will learn some very valuable lessons in specializing, excelling and selling. All from the management team through to the process of making your product are discussed.

It all starts with making the product specialized, don’t be a generalist and do lots of things not so well but do some things very well. This includes having to make some hard choices, and saying no to projects you are not specialized in. When you specialize it is also imperative to become less dependent on a few customers, don’t let any customer become more then 20% of your clientele.

A second step is teaching your employees to sell the product without you. Make it teachable, develop a guide on how to perform the job. Then make it valuable, have something that competitors can’t copy. And make it repeatable, have costumers repurchase often and regularly.

By implementing these three lessons you make sure that the company has both value and is able to operate without you. John Warrillow then explains how to start your management team, sell your products and get a steady revenue going for two years straight before considering to sell. Strategies and things to know for selling the company are explained further in the book.

With years of experience in business and the successful sale of four companies, John Warrillow is the authority on building to sell. His philosophy extends beyond people wanting to sell, even if you have no intention to sell the book offers handles to improving your business. By telling the story of Alex, he takes you on a step-by-step journey towards selling your business.

The quality of the novel is its simplicity, it tells a story and at the same time learns us a lesson. For getting to know the fine details of building and selling your company this light read might not be it. But for introducing the principles that govern the whole process and guide you through different stages of development, it is a must read.

The Book:

Built to Sell: Building a Business that can Thrive without You – John Warrillow – ISBN 1101514116

More on Build to Sell:

http://www.youtube.com/watch?v=vO9ErAn6vZk – John Warrillow on building to sell

http://www.inc.com/ilya-pozin/tips-to-build-your-company-to-exit.html – Ilja Pozin on building a company that you can sell

http://browneandmohan.wordpress.com/2013/01/22/seven-financial-levers-for-build-to-sell-bts-or-build-to-grow-btg-companies/ – Pratibha Sharma on financial levers building to sell (BTS) or building to grow (BTG)

Simply Brilliant

It’s been a while since I’ve read Simply Brilliant by William C. Taylor, so read this short review at your own peril. 

The book is divided into four parts:

1. Stop trying to be the best; strive to be the only
2. Don’t let what you know limit what you can imagine
3. It’s just as important to be kind as to be clever
4. The allies you enlist matter more than the power you exert

The first part is about doing something original, about doing things that other organisations can’t or won’t do.

• “Every great company has redefined the business that it’s in”
• “[be an] alluring alternative to a predictable (albeit efficient) status quo”
• “… create a one-of-a-kind presence and deliver a one-of-a-kind performance that is not just a little better than what other companies do”
• Taylor calls this a lighthouse identity (unique point of view, intensity, salience, build on rock)
• “… if everyone is heading in one direction, you should head in the other”
• “… choose to inspire rather than to manipulate” (with a reference to Start with Why)
• John Doerr believes in missionaries (who are on a mission) over mercenaries
• “Perfection is not attainable, but if we chase perfection we can catch excellence”
• “The world will not force you to be extraordinary. You must demand it of yourselves”

The second part is about knowledge and that having less experience can be a positive. This makes me think of older people who have already experienced so much, as that it makes them less open to new experiences (or 28 year olds who sometimes feel like they’ve seen it all already).

• “[show] a willingness to improvise under difficult conditions without compromising the timeline or the goal”
• “[If] you’re making folks uncomfortable, you’re doing something right”
• “Expertise is powerful – until it gets in the way of innovation”
• He explains that the paradox of expertise means that the more you know of an industry/technology/market, the harder it becomes to ‘think outside the box’ and leapfrog it
• “Be firmly competent – thorough, smart, business-minded, accountable. And boundlessly provocative – challenging, surprising, restless, imaginative” (again an example of keeping two thoughts/ideas in your head at the same time)
• Be confident in the things you know and at the same time explore new things. I see this also as a way to overcome the Innovators Dilemma
• Commit yourself to continue learning and growing/exploring
• “If you want to stay young, you have to work to keep trying new things”

The third part is about being kind, about caring more than anyone else. This makes me thing of Give and Take and how being a giver, can help you get back more (revenue, happiness, etc) in the end (without being a sucker).

• Recognise that clever thinking and strategising will only get you so far. It’s about connecting with humans both inside the company and outside
• “We can do small things with great love” – Mother Teresa
• See the customer as another human being and see what small act of kindness you can do
• “Civility is not the enemy of productivity”
• One example he uses is of the mounties in Canada who give positive tickets, what a great idea!
• “Will you be clever at the expense of others, or will you be kind?”
• Think about emotions, about mystery, sensuality, intimacy and how these things can add to your brand and story
• “You can’t quantify it on a spreadsheet, but there is a tough-minded case for leading with love”
• “People have to be internally motivated to change”
• “Be provocative enough to change what people do”
• “If you want to create something exciting and compelling, a performance that keeps evolving, the human spirit is the only thing that delivers”

The fourth part is about allies versus exerting power. About connecting with others and learning through those connections.

• “ROC, return on connectedness, and ROL, return on luck”
• “Sustained innovation comes when everyone has an opportunity to demonstrate a ‘slice of genius'”
• Be humble as a leader and admit when you don’t know things, be open to learning from others
• Make everyone win when the company does so. This could mean ownership form employees, profit sharing with customers, etc.
• “Nobody wins unless everybody wins”
• “Companies generate more ideas and create more value when more people get a piece of the action and a seat at the table”

The books ends with a few questions for entrepreneurs, here they are:

1. Can you develop a definition of success that allows you to stand apart from the competition and inspires others to stand with you?
2. Can you explain, clearly and compellingly, why what you do matters and how you expect to win?
3. Are you prepared to rethink the conventions of success in your field and the logic of your success as a leader?
4. Are you as determined to stay interested as to be interesting?
5. Do you pay as much attention to psychology and emotion as you do to technology and efficiency?
6. Do the values that you define how your organisation works reflect the values proposition around which it competes?
7. Are you as humble as you are hungry?
8. Are you prepared to share the rewards of success with all those who had a hand in achieving it?

Blink

““The key to good decision making is not knowledge. It is understanding. We are swimming in the former. We are desperately lacking in the latter.” – Malcolm Gladwell

Lessons learnt: First impressions are real. It is regulated by our “adaptive unconscious”, it relies on our knowledge, manifests very fast and without conscious awareness. Although in some way quantifiable, intuitions are difficult to explain rationally. Intuition is built on / is a manifestation of your prior experiences.

In 1986 the J. Paul Getty Museum in California was presented with an intact and very much beautiful ancient Greek statue (a ‘kouros’) for purchase. The art historians thoroughly examined the statue and after a period the museum acquired the statue. Everyone loved it, it looked magnificent and was one of the few in such great condition. Then a member of the board came to see the statue, she immediately knew something was wrong. She could not pinpoint what exactly (after all, the tests said it was authentic). Others followed suit and a second investigation was started. They found out that they had lost $10 million on a fake.

This is how Blink by Malcolm Gladwell commences. It beautifully describes his power to use stories to make scientific explorations come to life. Blink is (of course) not about art history, but about intuition: our two-second judgment or gut feeling we immediately have. In this entertaining book, Gladwell takes the reader on a journey through the science behind intuition. He uses examples about marriage, choking on the golf course and military manoeuvres. Intuition, the power of thinking without thinking, is examined and conceptualized as the “thin slices” of behaviour.

“Truly successful decision-making relies on a balance between deliberate and instinctive thinking.” – Malcolm Gladwell

One of the first chapters is about doctors and how many times they get sued (in America). Gladwell proposes a question to the readers about what the cause of the number of lawsuits would be. I here propose roughly the same question to you – Which of these two causes would more strongly influence if a doctor would be sued?

1. The knowledge of their field and subsequent amount of mistakes (malpractices) they made
2. How the doctors talked to their patients

You would be surprised to find that 2. is the right answer. Much more important was the way the doctors treated their patients than how many actual mistakes they made. Gladwell explains this as follows: doctors are not sued because of their errors, they are sued because of their errors and then something. This something is how they are perceived by their patients. If someone felt that the doctor cared for them, that he or she made an honest mistake, nothing would happen. But if the doctors showed no personal interest in their patients, virtually every mistake would end up in court. In the final paragraph the reader is suggested to listen to that gut feeling and if alarm bells ring, find a new doctor.

From these “thin slices,” the book progresses to other areas of our instincts. In great detail, our snap decisions are examined and analyzed. Further on in the book, this is also related to decision making. In yet another great story the reader gets to experience the “War Games” and learns how one General ends up winning, whilst acting for the outgunned and outmanned ‘bad guys’ (which is not suppose to happen). This chapter illustrates how intuition is related to leadership. Leaders have to make decisions based on incomplete information, to make the right choice your gut feeling should be consulted.

Later chapters speak about the errors of thinking fast. Two of these examples are very striking (and worrying). The first is about the “Warren Harding Error”, how America chose the wrong president. It states that people make their big voting decisions not on who has the best policy or ideas for their country, but that they base it (solely) on appearance (of the president-to-be). The second is about discrimination, how we quickly judge minorities less favourably. Using very fast displays on a monitor, good and bad words and timing of how quickly a person will associate with either kind of word, research has found that people will connect minorities with negative words more quickly. It is something that even people from the minority themselves do and it is very difficult to overcome, but it is caused and anchored in this instinctive thinking.

Critics of Malcolm Gladwell have pointed out that critical thinking too is very important in making the right decisions and that thinking fast is not the solution to all problems. In my opinion, Gladwell is aware of this, yet does not really put too much focus on this. In the end, Blink makes for a great book to read.

Gladwell also has written Outliers and The Tipping Point.

The Book:

Blink: The Power of Thinking Without Thinking – Malcolm Gladwell – ISBN-10: 0316010669| ISBN-13: 978-0316010665

More on Blink

http://gladwell.com/blink/– The Official Website

http://www.slideshare.net/sahilwhiteday/blink-the-power-of-thinking-without-thinking-malcolm-gladwell – SlideShare of Blink

http://www.getty.edu/art/gettyguide/artObjectDetails?artobj=12908 – More on the kouros

The Seven Habits of Highly Effective People

The Seven Habits of Highly Effective People by Stephen R. Covey gives you a compass for being effective in business, home and everywhere else. You are challenged to take on a different perspective on life which is introduced via the seven habits. The book is based on years of research by Covey, and with more than 35 million sales can be considered quite the bestseller.

The habits are divided into three categories. The first features three habits that are focused towards independence or self-mastery. They elaborate on 1) being proactive, 2) beginning with the end in mind, and 3) putting the first things first. The second set of three habits focus on interdependence. In conflicts think 4) win-win, 5) seek first to understand the other, only then wish to be understood, and 6) synergize (1+1=3). After discussing both the internal en external habits one key habit remains. That is to 7) sharpen the saw, to balance and renew your energy every once in a while.

Whilst the principles are easy to understand and are accessible the book does a very good job of elaborating on the thoughts and science behind them. This is strengthened even more by providing the reader with a large supply of examples from both personal and business life.

Now in memory, Stephen R. Covey (October 24, 1932 – July 16, 2012) has been one of the (25) most influential people of the last century. Next to a range of best-selling books, leadership institutes all around the world have erupted that practice the 7 principles. And also in the domain of family life, the book: The Seven Habits of Highly Effective Families has become known worldwide.

The Seven Habits of Highly Effective People is a must read for anyone. While the size of the novel may seem like a big chunk to read through, you will have read the whole thing within a week. Next to that, you can easily pick it up every year just to refresh your memory of it.

I wrote this review in 2013 and I think I first encountered the book maybe a few years before that. After that I’ve relistened to it again in 2015 or 2016. I still think the core ideas are great and very useful. I do also agree a bit with this review that argues that there is much fluff in the book and that others (like Triggers) may be a better way to start with self-improvement.

The Book:

The Seven Habits of Highly Effective People – Stephen R. Covey – ISBN 0762408332

More on The Seven Habits of Highly Effective People:

https://www.stephencovey.com/7habits/7habits.php Stephen R. Covey on the 7 habits

https://www.stephencovey.com/8thHabit/8thhabit.php Stephen R. Covey on finding your voice and inspiring others to do so

http://www.lifehack.org/articles/lifestyle/fifty-habits-of-highly-successful-people.html Graig Harper on fifty habits of highly successful people

Humans Need Not Apply

TBD

Jerry kaplan

—

http://www.npr.org/sections/money/2015/05/21/408234543/will-your-job-be-done-by-a-machine