First Principles of Value Creation by Joe Plumeri

A beautiful read that is worth reading and re-reading. Joe was CEO of North America at Citi which was the best performing stock in the 1990s and now is a senior executive at KRR, having turned around Willis and First Data. In this 2019 talk he shares eight of his first principles of value creation

Plumeri’s 8 Principles

  1. Vision
    1. Where’s grandma’s house? Where as we going
    2. We all need a vision. Without one, people will make up their out
  2. Purpose
    1. Do you passionately care about the client and vision?
  3. Make a big deal out of everything
    1. Delegate authority but never responsibility
    2. Write notes to everyone and recognize people as often as possible
    3. Gerald Ford helping to get friend buried at Arlington made me cry
  4. Create a no doors culture
    1. Go “play in traffic” – go make things happen
  5. Create a performance-based culture
    1. Citi had a program where if you didn’t exercise the stock, then you got double the amount. That’s how Sandy Weill was able to keep everyone
    2. Gave stock wherever he worked and he always put shareholders first. Would never even visit a tourist attraction if he was traveling because it was the shareholders who had paid to get him there
    3. Ownership, team building, everybody on the same page
  6. Widen the value gap
    1. The value gap is what people or companies can do for themselves compared to what you can do for them. You always want to be expanding this gap
    2. Never be in a commodity business
    3. Are you competent or compelling?
    4. Price is an issue in the absence of value
  7. Your reach should exceed your grasp
    1. Always ask, “What else?”
  8. Surround yourself with people who want to do great things
    1. Viking effect of burning boats, getting everyone all-in