Tag Archives: Philosophy

The Three Questions: How to Discover and Master the Power Within You by Don Miguel Ruiz

Summary
  1. “At each stage in our lives, we must ask these simple yet deeply profound questions. Finding the answers will open the door to the next stage in our development, and eventually lead us to our complete, truest selves”
Key Takeaways
  1. Who am I? You will know who you are by what you are not
  2. What is real? You will know what is real by what is not real
  3. What is love? You will know love when you know what love is not
  4. Everyone feels good around someone who has genuine love for themselves. We can never give what we do not have so it makes sense that it would be hard to truly love others if we don’t move ourselves. Be aware of your self talk and be affectionate and compassionate to yourself. Unconditional love of yourself is paradise.
  5. You can love without worrying about getting anything in return. You’ll find that you come to love naturally. When you don’t have to defend your opinions, you’re free to be authentic and open, surrendering to life
  6. Love has no conditions
  7. When there is nothing left to defend, truth is all that’s left
  8. The solution to all conflict is respect
  9. One of the biggest barriers to love is fear. We must be extremely aware of irrational fears, things which aren’t real, things which we’ve made up. We must face the fear and increase clarity, bringing calm and self awareness.
  10. Fear, left unchallenged, controls our actions. We are often most afraid of our reactions and enjoy being the victim. Awareness is our gift and salvation
  11. Searching for answers brings unexpected revelations. Curiosity opens unseen doors. We allow ourselves to receive the information of life. When we can’t master our own attention, we miss a lot. Too much focus on one thing means we miss so much around us
  12. Humanity’s greatest art is to dream consciously
  13. When you give up having to know or be right, you become so much lighter
  14. People trust authenticity more than almost anything
What I got out of it
  1. Be authentic, self-aware, and give as much of yourself to others as you can

The Laws of Human Nature by Robert Greene

Summary
  1. Robert Greene draws on a multitude of different resources to highlight the laws of human nature. The examples are timeless, universal, and profound. By acknowledging these human universals, to what extent they impact you, and how they are prevalent in others, you will become more aware and better able to mitigate and control them in yourself and others. “Human nature is deeply ingrained within our genes, within our brain’s structure, and has evolved over millions of years. It is partly responsible for how we make decisions, how we manage our emotions, and it controls, unknown to us, the vast majority of what we do and think. Human nature has helped us survive and determines much of our emotions and how we think and behave.  Understanding how we are wired will help us better deal with others and better see through when they’re trying to manipulate us, take advantage of us, charm us, or otherwise. We developed extreme sensitivity so that we could better read and judge others and to this day, although we don’t realize it, we are finely tuned to register how others react, to their voice, their body language, and more. This book is an attempt to draw together the vast store house of knowledge from many different fields to describe and give examples of some laws of human nature. They are laws in the sense that people tend to react quite consistently in similar situations. Becoming aware of these laws will make you a calmer and better observer of human nature, more able to notice and decipher the subtle cues everyone emits, and become a greater judge of character.”
Key Takeaways
  1. It is important to realize that these laws of human nature impact, affect, and influence you as much as other people and by truly understanding them, they will help build your empathy, allowing you to simply see other points of view better and more clearly, giving you the opportunity to focus on what’s important – helping others and having having an impact. You will be able to train yourself to be present, to let go of preconceived notions, and to continually adapt your understanding of the people around you. This understanding will help you become more empathetic and more effective in everything that you do
  2. The Law of Irrationality – Master Your Emotional Self
    1. Realize that people often act the opposite of how they feel – someone loud and obnoxious is often insecure
    2. Emotions taint our thinking and behaviors, not allowing us to see and act in accordance with reality, leading to bad decisions, pain, and stress. By admitting and embracing this rationality we can slowly tame our emotions, become more rational, thereby making us more effective and insightful as we can align with reality, to see things as they really are and not as we wish they were
    3. The first step to tame your rationality is to admit that you are irrational. As you become more introspective, the calm inner voice will grow more confident and louder, allowing you to see things more clearly and accurately. You first recognize the biases in yourself and work towards giving yourself the space and time to think and act how you want, and not simply react emotionally
    4. The goal of rationality is not to eliminate emotion, but to channel it in order to become aware of why you are feeling what you are feeling – to take advantage of it and use it to further what you want to do
    5. You can become more rational by becoming more aware of low grade irrationality or what happens in the subconscious, and high-grade rationality (what happens in your conscious). Over time, you will be able to train your emotions so that you become be less reactive over time. You improve your rationality by first knowing yourself thoroughly – knowing your strengths and weaknesses, how you react under pressure, and when you’re flattered. Next, you must improve your reaction time giving yourself space to think and not just react instinctively. Then you must accept people as facts and not try to change them but just accept who they are, understand them, and how you have to deal with them
    6. We must learn from our mistakes. The point of memory is to not repeat mistakes but so few people take the time and energy to really dive into what caused him to err.  We have to become aware in the moment of things that make us react and dive into why we feel that way – is it a childhood trauma, something our parents told us, or why do we just react emotionally?
    7. People‘s true character and ability shine through under stress. You have to find time, space, and quiet in order to be able to think and gain perspective. Don’t think you are above stress and that it doesn’t impact you – it does!
    8. Be weary of groups as it doesn’t stimulate rationality and independent thought but rather the much deeper and more ingrained part of us that wishes to belong – leading to herd behavior
    9. Don’t think that we are in a steady path towards rationality as a species. The pendulum swings back and forth between rationality and irrationality. It is part of the cycle of human nature. Irrationality won’t always look the same but it will always come back. Improving rationality is something to be done at an individual level and not at a species level
  3. The Law of Narcissism – Transform Self-Love into Empathy
    1. We must be honest with ourselves and grow and come to love a cohesive self or risk falling into narcissism
    2. Turning your attention outwards to others rather than inwards like most people do will help you grow your empathy muscle and give others the attention they so gravely seek
    3. Shackleton in the toughest of times drew out very specific daily tasks to give everyone meaning and focus. In addition, he understood each man so well that he knew what to talk to them about, when, and how to keep them happy, their morale high and content. This empathy was literally life and death as it is for us, although it’s not as clear
  4. The Law of Role-Playing – See Through People’s Masks
    1. People hide their true feelings and intentions so you must become an expert reader in other people and at the same time learn how to play your role as convincingly and consistently as possible
    2. Milton Erickson was diagnosed with polio at a young age and to occupy his mind he observed others extremely closely and through this knowledge and pattern recognition came to see an incredible world of nonverbal cues, motions, gestures, the importance of tone of voice, and everything beyond what is simply said. Observe, observe, observe. People tell you so much with their walk, tone of voice, how they sit, their micro expressions, and more.
    3. Negative emotions leak out through body language and they must be observed and weighed more than whatever mask people put on
    4. Be authentic, humble, open minded and generous – “saintly” and above reproach
  5. The Law of Compulsive Behavior – Determine the Strength of People’s Character
    1. Gravitate to those who display strength. One best reads people’s character in stressful and difficult times
    2. Character comes from the Greek word meaning “stamped upon”. Our character is ingrained in us and is composed of our genetics, our earliest relationships and quality of attachments, and from habits and experiences. We can learn to compensate any harmful traits but for the most part they’re hard to rid
    3. People are quite bad at judging character but the most reliable way to assess someone is through their actions (people never do anything just once, actions are truer and can’t be rationalized by words), how people handle small and simple affairs, how people handle power and responsibility. Try to only work with people of strong character for those with weak character will negate all their other good qualities and will cause more headache than you want. People who are strong of character are as rare as gold and you should hold onto them is if you found treasure
    4. It is impossible to change one’s or others’ character but you can mitigate them by going deep within yourself, admitting your flaws and weaknesses, and doing all you can to strengthen them up and act in such away to emphasize your strengths and downplay your weaknesses. The goal is not to become someone else but to be thoroughly and authentically the best version of yourself
  6. The Law of Covetousness – Become an Elusive Object of Desire
    1. Realize that most people, no matter how often it is said, don’t really want truth and facts, they want their imagination lifted and their ego boosted
    2. Realize that the grass is rarely greener on the other side
    3. Learn when and how to remove yourself. You also want to be a little cold and ambiguous so people can’t get a great feel for you
    4. It is not possession but desire that drives people. By becoming a scarce commodity and playing on other’s covetousness, you can become highly desirable
    5. In the end, what you must covet is a closer relationship to reality, bringing calmness, knowledge about yourself, an understanding of what you can change and what you can’t, and being OK with both
  7. The Law of Shortsightedness – Elevate Your Perspective
    1. Learn to judge people by the breadth or narrowness of their vision and seek to surround yourself with those who can understand the consequences of their actions and have a bold vision
    2. With an elevated perspective, you will have the patience and clarity to achieve almost any goal
    3. When people’s horizon shrink to days or weeks, they lose the ability to see the consequences of their actions and they become manic
    4. 4 signs of shortsightedness:
      1. Unintended consequences (have at least one person focus solely on consequences)
      2. Tactical hell happens when you can’t back out of everyday battles to get detachment, perspective and the long-term view (strategists will always beat tacticians)
      3. Ticker tape syndrome (need to know instantly drives short-termism, avoid the noise as much as possible)
      4. Lost in trivia (know what’s most important and spend most of your time on that)
  8. The Law of Defensiveness – Soften People’s Resistance by Confirming Their Self-Opinion
    1. Learn to tame your stubbornly held positions and come to see other’s points of views and beliefs. This will open them up, making them more open to your suggestions
    2. It’s hard to ignore a man who makes you feel good. When you have valuable information and can get things done on top of it, you’re a force
    3. LBJ knew he had to rein in his more aggressive and bullying qualities in order to win over key allies and learn from them. Having one key ally near the top of the mountain can make a lot of things happen. He never asked for favors but did others favors, if his allies had any interests he would cultivate an interest in that too, he was always willing to help and work hard, knew what others wanted and needed and figured out how to make himself the gate between those things, he made it in other’s interest to hand over power to him
    4. Influence over people is often gained in the opposite way than we imagine. Put the focus on others and make them the stars of the show. Always step back and assume a subtle inferior position. Then do some small favors for them and they’ll begin helping you, expanding your influence. Bring out the cleverness of others and make them feel good when they leave you
    5. People have a self opinion and it doesn’t matter if it’s accurate. 3 universal traits: I’m autonomous, intelligent, good and decent. These affect everyone’s self opinion and playing into these and validate them make them feel good. Avoid confronting people’s self opinion.
    6. 5 strategies of master persuaders
      1. Be a deep listener and be aware of subtle nonverbal cues
      2. Infect people with the proper mood (acceptance of others unconditionally, calm, enthusiastic)
      3. Confirm their self opinion (people choose to help you)
      4. Know what people are insecure about and compliment that
      5. Use people’s resistance and stubbornness against them (channel their aggressive energy in order to make them fall on their own – use their emotions, their language, their rigidity)
    7. Praise people for their effort and not their talent
  9. The Law of Self-Sabotage – Change Your Circumstances by Changing Your Attitude
    1. Our attitudes are self fulfilling and paint everything we see, experience, learn and do
    2. See yourself as an explorer – always curious, open to new things, having weakly held convictions, you are always trying new things and want to learn
    3. See adversity as opportunities to improve and to get better, not something to be avoided. Understand that you can’t change people – embrace and enjoy who those people are and make the most of it. When you do this people, come to love you, accept you, and see you as a leader
  10. The Law of Repression – Confront Your Dark Side
    1. Embrace your dark side and integrate it into your personality. You’ll become a more complete and authentic person and radiate that to others – attracting them into your circle and influence
    2. Depression and anxiety comes from not being aware of your dark side and not letting it shine through in a positive way. By denying that side and repressing it, it only becomes stronger and comes out stronger in ways that you will come to regret
    3. Most hatred stems from envy and is a way for the subconscious to release some energy
    4. Steps to bring about and integrate the shadow:
      1. Become self aware and see the shadow (others can often see your shadow better than you can so ask them for their opinion)
      2. Embrace your shadow
      3. Show the shadow
  11. The Law of Envy – Beware the Fragile Ego
    1. You must become a master decoder of envy and those who are predisposed to being envious.
    2. People are status-seeking animals and constantly monitor their relative position in the hierarchy. People must have an adequate position to be comfortable and happy
    3. Always emphasize the role of luck in your life. Enhance your flaws in order to make yourself more relatable and to mitigate envy. As you gain power, keep humbling yourself and asking for the opinion of those below you
    4. Be wary of mass – spread the love, the relationships, and the wealth and you’ll have people pushing for you to rise rather than trying to put you down
  12. The Law of Grandiosity – Know Your Limits
    1. You must be aware of your tendencies towards grandiosity and how important that is for you. If you feel the temptation, you must mitigate this by realizing your weaknesses and how big a role luck has played, becoming more realistic and grounded
    2. Be aware of your grandiosity needs, concentrate that energy on a particular task or goal, create a dialog with reality and be open to the flaws in your plan, find appropriate challenges which test you but aren’t too much, occasionally let yourself take on huge challenges
  13. The Law of Gender Rigidity – Reconnect to the Masculine or Feminine Within You
    1. By blending in the opposite side, what you’re most lacking, you’ll become more complete, fluid, whole, and authentic, drawing other people to you as you merge the different sides of your personality.
      1. This is a far more effective tactic than trying to become a purer version of what you already have
  14. The Law of Aimlessness – Advance with a Sense of Purpose
    1. We must be open to our internal, primal traits that make us unique. They not only help set us apart and get us on a path towards mastery but also helps the community at large as it fosters diversity and helps spur creativity and innovation in others
    2. Operating with a high sense of purpose which aligns with who you are and what you want is the force multiplier – allowing you to achieve more and have a more meaningful and impactful life. Discover this sense of purpose and find as many ways to connect with it as possible – this will draw others towards you and open up opportunities that you would have thought impossible
    3. Discover your calling by going back to your roots, your childhood, the primal inclinations which set you on fire – the things which you got very enthusiastic about and couldn’t stop thinking about. Things which are so fun or easy for you are good signs.
    4. Surround yourself with as many people as possible with the deep and true sense of purpose. They will help teach you, guide you, energize you, and motivate you
    5. Have a long term goal but also build in small, shorter term goals which build up to the ultimate goal. This will keep you moving in the right direction and mitigate anxiety
    6. You must get into deep flow as often as possible in order to progress quickly and in the right direction. It takes a lot of work and is difficult as it takes sacrifice and dedication but is the only way to get there
  15. The Law of Conformity – Resist the Downward Pull of the Group
    1. Develop self awareness and the changes that occur to yourself and others when in a group. One of the greatest threats to our survival thousands of years ago was being ostracized so today fitting in and being accepted in the group is one of our greatest concerns. We fit in by accepting the norm and imitating and following the group. The danger is that we stop thinking for ourselves and simply imitate the group and lose what makes us unique and gives us power
    2. All people have evolved to see hierarchies and this gets exaggerated in groups. We lose our rationality and go with the herd, often leading to dangerous or poor outcomes
    3. You must be aware of the effect that groups have on people as individuals and the broader group dynamics – hierarchies can lead to cliques, factions, and power mongering
    4. In any group you have to understand the culture and the fact that an older company and a bigger group will likely control you rather than you control it. You also have to understand the group dynamic and the hierarchy – who is moving up and down relatively
    5. You can make factions and cliques less attractive by creating a positive, unifying, and uplifting culture that people can go all in on
    6. You must understand and be really realistic with yourself and how big of an influence the group has on you. You’re not as much of an individual thinker as you think you are. You must be able to detach yourself from the group and be a realist – this is more important today than ever
    7. Bad culture drags everyone down. You can’t focus I’m trying to improve individuals – you have to fix the dynamic. Improving the culture this will lift everyone up. When the group can face reality head on and kick-ass, that is when you have a great culture. Instill a collective sense of purpose (no matter what field, quality and excellence are key factors – money and success are byproducts). This higher purpose is rare to come by so people will go all-in and police themselves when they find it. Assemble the right team of lieutenants (avoid the petty details which cause confusion, competence and character are vital, know their roles and make sure they have complimentary skills, you must treat people equally, get rid of those who don’t fit the mold, and lead from the front), let information and ideas flow freely (frank and diversified information, open communication, transparency on how decisions were made), infect the group with productive emotions (lack of fear, courage, calm, openness to new ideas), forge a battle-tested group (group who rises in tough times and doesn’t wilt)
    8. A group willing to face reality with a great culture help rise people up, it is one of people’s most memorable experiences to be part of a group like this. It is our duty as enlightened humans to create as many such groups as possible, making society healthier in the process
  16. The Law of Fickleness – Make Them Want to Follow You (an amazing chapter on leadership)
    1. People are always ambivalent about powers and leaders. Authority is the delicate art of wielding power while making people feel like you are working for them
    2. As the leader you have to embody and practice all the traits that you would want in a leader. You must work hard, lead from the front, be fair, be consistent, courageous, wise, and calm and difficult situations
    3. As a leader be very aware of how fickle people are and how history is riddled with examples of great leaders who start showing some signs of weakness, arrogance, or whatever else which leads their people to turn on them and sometimes put them to death or ostracize them
    4. The fundamental role of the leader is to provide a far reaching vision to unite the group. We must avoid seeming petty  and our focus needs to be on others, on the culture, and the vision.
    5. Toughness and empathy are the twins pillars of leadership. They are not mutually exclusive but inextricably bound. You must have both or people will begin to lose faith in you as a leader
    6. You must be a consummate observer of people and these traits of leadership and hierarchy, coming to embody and practice them consistently in all situations
    7. Most people run away from the dangers and responsibilities of leadership but you must embrace it. This skill is increasingly rare in today’s world so the more you can run towards it, the more you’ll stand out. The essence of leadership is that when people willingly follow, you will not need force, rah rah speeches or to punish people. Your leadership style most authentically arise out of your personality and character you can be authentic, a founder, the deliverer, a visionary artist, healer, pragmatist, etc – but it must be natural for you
    8. Turn your focus outwards so that you’re always looking to help others and then you work to earn people’s respect – never assuming it will be given to you. What drives you is bringing the greatest meaning and utility to the largest group – never on your ego or selfish desires.
    9. Having a vision allows you to work backwards from the future to the present and determine the steps that you need to take in order to get there.
    10. You have to lead from the front and show early that you’re tough. Have high standards for your own work and  if there are sacrifices to be made, you have to be the first to make them, and they can’t simply be symbolic. If you take things away, make it known that it is only temporary. Be in a position where you can be generous
    11. Never overpromise
    12. Finally, we like to focus on the psychological health of individuals, and how perhaps a therapist could fix any problems they might have. What we don’t consider, however, is that being in a dysfunctional group can actually make individuals unstable and neurotic. The opposite is true as well: by participating in a high-functioning reality group, we can make ourselves healthy and whole. Such experiences are memorable and life-changing. We learn the value of cooperating on a higher level, of seeing our fate as intertwined with those around us. We develop greater empathy. We gain confidence in our own abilities, which such a group rewards. We feel connected to reality. We are brought into the upward pull of the group, realizing our social nature on the high level it was intended for. It is our duty as enlightened humans to create as many such groups as possible, making society healthier in the process.
  17. The Law of Aggression – See the Hostility Behind the Friendly Facade
    1. John D Rockefeller is the role model and story for this. He would use his will to outdo, outthink and outwork his opponents. Hostility is within every human and don’t be fooled to think anyone is too nice. Rid yourself of the denial that this doesn’t exist in people.
  18. The Law of Generational Myopia – Seize the Historical Moment
    1. Transitions can be seen over decades and seem to be universal across time and indicate that they are bigger than any one generation. It is part of human nature the pendulum swings in the trends follow
    2. We must develop generational awareness understanding how our own generation impact our thinking in view of the world and have generations overall impact people across time
    3. You must understand and honor how much the time period and generation you were born into affects you. For example, millennials care more about teamwork than individualism, and security rather than risk because of the financial crisis. If you can define the zeitgeist for each generation, you will better understand the people within it and how to work and get along with them. Taking different perspectives will help your creativity and calm you. Once you have a sense for the zeitgeist, look back in history and find a parallel. Associate yourself with heroes of the past
    4. Always work with the spirit and don’t critique or try to change it. Always evolve and adapt, don’t become a caricature of the past. Modernize your spirit, adopting your experience and perspective with some of the traits of the younger you agree with
    5. You must develop deep relationships with people from various generations
  19. The Law of Death Denial – Meditate on our Common Mortality
    1. Realize that life is short, that most people are terrified of death and have not confronted that within themselves.
    2. If you live everyday, there is more than enough time
What I got out of it
  1. Deep self-awareness is the cornerstone. Once you can face reality and admit your flaws and weaknesses, you can address them and mitigate them. As much as you can, put others before yourself, put your energy and attention on them rather than yourself

A Treatise on Efficacy

This book ties together so many recent themes for me – Werner’s effortless mastery, strategy, philosophy, psychology, and more.

A book well worth reading and re-reading. One of my all time favorites

A Treatise on Efficacy

John H. Patterson: Pioneer in Industrial Welfare by John H. Patterson, Samuel Crowther

Like my write-up on Henry Ford and some of my other “teacher’s reference guides“, I got so much out of Pioneer in Industrial Welfare that I wanted to create a more formal write-up. As always, I have attempted to put together something which is (hopefully) a manageable, actionable and digestible introduction to Patterson’s thinking and business philosophy.

On John H. Patterson

 

 

*The vast majority of the content is from the books and not my own words. I’ve simply distilled, compiled, and added a few notes.

12 Rules for Life: An Antidote to Chaos by Jordan Peterson

Summary

  1. 12 rules for how to balance chaos and order, how to live a meaningful life that benefits self and others. If we each live properly, we will collectively flourish

 

Key Takeaways

  1. Stand up straight with your shoulders back.
    1. Most animals and every human is part of a dominance hierarchy and being higher has more positive effects than we care to verbalize. It is an external part of our environment, an unchanging aspect of evolution. Where we stand powerfully affects every aspect of our being – conscious and unconscious alike. Our system actively monitors exactly where we stand in society and there are physical changes that occur in victory and defeat (a loss by a dominant lobster leads to a virtual dissolution of his brain into a subordinate brain).
    2. Many human games are winner take all or winner take most so being a winner often has exponentially positive effects – virtuous and vicious cycles. You feel safe and secure so can take more risks, change is typically seen as good and you can be more confident, courageous, and generous, can be on less alert and plan long term, you can delay gratification. All characteristics, traits, behaviors that enhance chances of success. Those at the bottom are generally less healthy and don’t live as long. Being at the bottom necessitates a lot of emergencies and a strong will to survive but this burns our energy.
    3. Having predictable daily routines offsets much chaos, unpredictability and ultimately fear that many people experience – go to sleep and wake up at similar times, have a high protein and fat breakfast. Many difficulties stem from biological imbalance and if we can get our sleep, diet, health in order, we can better manage anything that comes at us
    4. If you start to straighten up, people might just start looking at you and treating you differently. Your nervous system responds totally differently when you take on a challenge directly as opposed to being forced into it. Being higher up in the food chain, in the social hierarchy, has obvious social, physical, psychological, physiological effects which ripple into everything we do or undertake
  2. Treat yourself like you are someone you are responsible for helping.
    1. Peterson argues that because you know your own faults better than anyone else, how meaningless and flawed you are, you have trouble taking care of ourselves like we would others. We don’t respect ourselves and see ourselves as falling creatures. We don’t stand for and walk with the truth so can’t take care of ourselves in the way that someone who did would. Most people simply do not believe they deserve the best care. However, although we are not a God, we are something, we matter. You have a moral obligation to take care of yourself as best as you can because it not only benefits you but ripples and benefits others as well. You deserve to be taken care of and to be healthy and happy
  3. Make friends with those who want the best for you
    1. Good influences will encourage you and not put up with your flaws. They will push you to be a better person and to strive for more, for better.
    2. Those who are bad influences will try to drag you down for every improvement you make in your life only makes them more aware of their own inadequacies
  4. Compare self to who you were yesterday and not who someone else is today
    1. Aim high but make the goal(s) reachable
    2. Be careful who you compare yourself to. The comparison is generally too narrow, without taking the full context into account. Is that famous person you are jealous of truly happy. Are they close with their families? Do they feel fulfilled?
    3. You have to see yourself as a stranger and ask who you are, what you want, where are you and where you want to go. Imagine that you’re dealing with your moodiest, most sensitive, laziest friend and communicate to yourself as you would to them. Nobody wants to work for a tyrant so ask nicely, humbly. Begin with small, simple asks and actions – what small thing could you do today that would help you accomplish that? That would get you just an inch closer to better, to being happier. Just like you pay an inspector to tell you the flaws in a house, you need an inspector to tell you your flaws. This can be an internal critic, if he/she is on the right track and has your best interests in mind.
    4. The past and the future are similar except that the past is fixed. You can do something about the future and happiness is found in uphill progress.
    5. 3 simple questions to get started on this path:
      1. What bothers me?
      2. Is this something I can fix?
      3. Would I actually be willing to fix it?
      4. What could you do, what would you do, to make life just a little bit better
    6. When you feel strongly about something, you must speak up. When this failure happens at a societal level, tyranny ensues. It is on the individual to speak up for what is right, to stop evil, to do good.
    7. What you aim at is what you see. That’s worth repeating. What you aim at is what you see. Overtime this accumulates and progresses. This is magic. This is compound interest. Seeing is difficult and very cognitively expensive so you must shepherd your resources carefully. You must ignore the unmanageable complexity found in the world and march towards your goal. You see obstacles as they arise and find a way around them. However, you must balance this with knowing when to back off for marching blindly towards your goal will make you unaware of other, potentially better, opportunities. If we accept that we are blind to most of the world, we also must accept that most of the opportunities are outside of our awareness. This is incredibly uplifting because it means that finding different paths, more opportunities is always available
    8. You cannot fool your psyche. You must wholeheartedly want to improve, to become better. You have to know what this means for you from bottom to top. Becoming better and improving takes more resilience and responsibility than living stupidly and without a purpose. It takes perseverance and effort. Don’t let that stop you. Align yourself to your highest good, bring peace and beauty into this world.
    9. You are too complex to ever fully understand. The closest proxy we have is to observe how we act. Don’t overestimate your self-knowledge. On one hand you are the most complex thing in the universe and on the other, you can’t even set the time on your microwave.
  5. Don’t let kids do anything that would make you dislike them
    1. Successful parents make kids eminently sociable (know how to play which allows them to develop and learn and be accepted by a wide variety of groups).
    2. Many parents are willing to give up respect in order to gain friendship. This is wrong. Your children will have many friends but only two parents. Proper discipline is difficult and takes much effort but the long-term payoffs are priceless. It will give you a well-adjusted, socially desirable child. Boundaries and limits, although not generally welcome in the moment, are needed by all children. They push in order to see what is permissible, where the boundaries lie. Consistent correction is necessary and better sooner than later, and a better alternative to what the child is looking for must be shown.
    3. No grudge after victory – you always reward good behavior. Children do not solely cry when they are scared, hungry or sad, but more often they cry because they are angry. Anger crying is often an act of dominance and should be dealt with as such.
    4. Violence, destruction, anxiety are not hard to understand. They are the default. Peace, progress, calm are hard to understand because they are difficult, they take restraint.
    5. Discipline and punishment evoke bad images but their use in raising children cannot be avoided. Rewards are of course needed too and they can’t be so small they are inconsequential nor so large that they devalue future rewards. People move towards what they find agreeable and away from what they don’t. So know what you are looking for and what you want more of and reward that and punish what you don’t. You can discipline your children or you can wait for the harsh and uncaring world to do it for you. Poorly socialized children have terrible lives so it is best, and most loving, to socialize them yourself when they are young. The question is not if to punish/discipline/reward your children, but how to best do it based on the temperament of your children
    6. Rules should not be multiplied beyond necessity. Bad laws drive out the good. Limit the rules and then figure out what is done when one is broken but use the least force necessary to enforce those rules – this must be figured out experimentally (note the rules he mentions in this section for why children should behave well). You are not doing your child any favors by holding back on punishment and discipline and ignoring their bad behaviors. Timeouts are useful to show the child that they can rejoin once the anger or poor behavior has resided.
    7. Parents should come in pairs. Parenting is difficult and everyone has bad days so it is necessary to have someone else around to observe and step in when needed
    8. Parents should understand their own capacity to be mean, vengeful, spiteful. No adult human being can withstand being dominated by a child forever and this will eventually lead to a need for revenge, to ignoring the child and the real punishment will then begin – resentment, holding back love, ignoring them. Planning and knowing the proper punishment and how you will act will stem toxicity and save the family
    9. Parents have a duty to act as proxies of the real world. Caring proxies, loving proxies, but proxies nonetheless. This responsibility supersedes any responsibility to make the child happy, boost their self-esteem, it is the primary job of parents to make the children very socially desirable, bringing opportunities, deep relationships, meaning and fulfillment. Clear rules make for sociable and calm children and rational parents
  6. Set your house in perfect order before you criticize the world
    1. Understanding resentment, revenge, and the dark side of humanity is very helpful but you must come to know these in yourself before you can judge others. It is only through the difficult self-work needed to make your life better, the little things that you know you can do or stop doing in order to make yourself happier, to make your life simpler, to make the lives of those around you better. Only once you have acted on all these and have gained this self-knowledge, can you begin to look outward and expect more of others. Once you see how hard it is to expect these things of yourself, you will better understand others and not have sky high expectations
  7. Do what is meaningful and not what is expedient
    1. Doing anything meaningful requires sacrifice and sometimes the bigger the sacrifice the more meaning you can gain
    2. Delayed gratification, planning, and sacrifice are essentially bargains with the future – you give up something today in order to have more or better tomorrow
    3. What is the biggest most impactful sacrifice you can make today and what is the most ideal future that would create? Define this for yourself and align your life to give yourself the best chance of making that happen
    4. Sharing done properly is giving something today to someone with the hope that they will give you something else in the future. It is the beginning of trade. What is even better than sharing is sharing generously, without expecting anything in return, for this has many positive unintended effects and everyone loves and helps those who are generous
    5. The most successful sacrifice: any sacrifice which is difficult to make, and is personal. Do this until it becomes easy, until it’s routine.  This is foregoing what is expedient and what is easy for what is meaningful
    6. If you learn to listen to your conscious, get to know your values and ideals, and follow them, you’ll be given more than you could ever need or require. The payoffs are greater than you know
    7. Enlightenment is so rare because it takes a move down to move up which means that the enlightened know the darkest, deepest, worst spots and stains and behaviors of man and is therefore never surprised by human nature. However, the flip side is that they also know the highest, the ideal form of man and knows that we are all capable of that as well
    8. Evil is when you make others needlessly suffer for no reason other than to see them suffer and good is anything which stops it. That is the meaning for that we should guide our lives towards. Never lie for this is the road to hell. Make this your moral pinnacle do everything in your power to alleviate unnecessary pain and suffering – that is the meaning of the good life
  8. Tell the truth, or at least don’t lie
    1. Never lie for it is the road to hell. If you lie, you can’t present your true self to others and you will never get to know your true self either. You will never truly know who you are or maximize your potential. You are hiding from the reality and not willing to confront it head on
    2. Lies warp the structure of being and lead to repression, pathologies, and the moral issues and horrific events that we saw in the 20th century
    3. You have to know where you are and where you are going so that you can chart a course, so that you know what you need to do to get from where you are to where you need to be. You have to know what your principles are, what you stand up for, so that you can argue against those who do not believe in what you do, so you can protect yourself, and you can more easily tell what is worth striving for. You have to keep your word and reward yourself when you succeed. It takes work to make heaven on earth, it won’t just be handed to you
    4. True thinking is really hard and really rare. Thinking can be thought of as a conversation between two or more avatars in your head and you have to be able to take each one of their sides, listen to each one, see how they would play out in your reality and then act on it. What most consider thinking is simply self-criticism disguised as thinking
    5. Memory is not meant to be perfect recall of the past for that does not exist. Memory exists in order to help you not make the same mistakes over and over again
    6. Truly listening to someone is one of the rarest skills and gifts there are. People organize their thoughts through conversation and if they have no one to share them with, they lose their minds. If you can truly listen, people tell you more than you could ever ask for and they will generally be very interesting and help you grow as a person
  9. Assume person you’re listening to knows something you don’t
    1. What you don’t know is more important than what you know. If you truly listen to people they’ll tell you what’s wrong, what they want, and how to fix it. Repeat people’s arguments to them and ask if you understood it correctly – don’t want to “win”, want to fix the problem. You and me against the problem, not me against you
  10. Be precise in your speech
    1. We don’t perceive objects like we think we do. We perceive meaning directly and then assign them to objects. We see tools and obstacles, not things and objects. And it depends on our needs and goals. This is why knowing where we are, where we are going, what we want, what we don’t want, our values, etc. is so important. It literally affects how we perceive the world around us
    2. We often see by instinct what things mean even before what they are which means that objectivity is very hard to reach
    3. Emergency = emergence of “c”, emergence of chaos
    4. Never underestimate the power of omissions. When things get swept under the rug and are not discussed and flushed out, they grow and manifest and become worse than you could ever imagine. If only they were brought up early and transparently and discussed openly, they could be called out, named, and dealt with. Everything discussed becomes clarified and gives you the potential to at least remedy them. If you avoid rather than address, what you least want will eventually come to happen, at the worst possible time. To specify the problem is to admit it exists, to admit what it is that you want. This may hurt but it is far better than the alternative and in the other way you cannot fail as you have not admitted what it is you want but this path leads you quickly astray. Be brave. Risk conflict in the present for longer term peace and happiness
    5. If we are imprecise with our speech, things remain vague, we are in the fog, our destination is unknown. Courageous clarity of thought is needed to call forth the problem
    6. Say what you mean, act out what you say so you can find out what happens and then course correct. Tell those around you who you are and what you want
  11. Don’t bother children when they’re skateboarding
    1. Kids need some danger, some consequences, in order to gain competence and later mastery. If things are too safe or predictable, they’ll behave in unintended ways because they need to live on the edge in some sense. They enjoy risk because it helps them improve future performance
    2. If you can’t understand why somebody did something, look at the consequences and then infer their motivations
    3. Conscientiousness and honesty more common and natural in western culture than people give it credit for.
    4. Take responsibility for your life and make the most of it. Don’t restrict children’s play
    5. Competence and not power is what gets you to the top of the hierarchy. In the west, the traits most associated with success are intelligence and conscientiousness and for entrepreneurs and artist, it is intelligence and openness to new experiences
  12. Pet a cat when you encounter one in the street
    1. In order to cope with a crisis, people shorten their time frame just to make it through the day. Be alert to the unexpected beauty in life during difficult times
    2. What you love about someone is inseparable from their weaknesses, from their flaws
    3. In the depths of difficult situations it is not thinking that gets you out but noticing. Notice that you love someone not despite their limitations but because of them.
  1. Other
    1. Consciousness is the thin veil the process that turns order into chaos. It has been proposed that the two hemispheres of the brain exist in order to deal one with order and the other with chaos. Meaning progress and for filament is found when you have 1 foot in order and 1 foot in chaos providing some stability and routine while still being able to learn and grow this is the straight and narrow path to flow and all progress. A good question for parents regarding chaos and order is do you want to meet them safe or strong
    2. An idea is more creditable when the results from the investigation come from various different realms
    3. Two lessons Peterson learned about the Golden Rule – about doing unto others as you would have them do unto you. The first is that it has nothing to do with being nice and the second is that it is an equation rather than an injunction. It is better for both parties to be strong, to stick up for what is right, because if you just give in and are “nice”, one will become a slave and the other a tyrant. Sticking up for yourself therefore is helpful to you and also beneficial to the other party
    4. Happy is by no means synonymous with good. When you give a child candy, the child is happy but it is not good
    5. There is no one enlightened, only those who seek to be closer to enlightenment.
    6. Overemphasize who you are becoming rather than who you are. This mindset, while often painful, is the fastest road to growth, fulfillment, and happiness.
    7. Aim to be the person at your father’s funeral who everyone can rely on
    8. A shared belief system simplifies communication and allows you to more easily understand where you stand in relation to others. It is inaccurate but a necessary mode of thinking. This simplification is absolutely vital and if it is threatened can lead to outcomes such as the Cold War. It is a system of value, providing a hierarchy and a structure for how to act and respond to others

 

What I got out of it

  1. An incredibly insight and interesting book, drawing from many different realms. I re-read it the minute I finished it and will return to it often

The Wisdom of Life by Arthur Schopenhauer

Summary
  1. Schopenhauer walks us through the art of ordering our lives to gain the maximum pleasure and fulfillment
Key Takeaways
  1. The wise of every age have said the same things and the fools have done the same
  2. The first and most essential factor in our happiness is our personality, what we are, for it is always with us and shapes everything around us and everything that happens to us.
  3. Man’s happiness can be summed up in three lots:
    1. What they are – their personality, what has been bestowed upon them by nature
      1. It is undeniable that lasting happiness and fulfillment comes from the first bucket, from their inner constitutions. External circumstances are worth relatively little because they are shaped by our experiences, thoughts, and ideas that shape the externalities and affect how we respond to them. It is what we are and not what we have that leads to lasting happiness
    2. What they have
      1. Excessive material wealth does little for happiness but we must be able to meet our needs or else we won’t have the luxury of time and space to focus on ourselves and what makes us really happy.
      2. Excessive wealth leads to so many unintended distractions that you can’t focus on what really matters to you.
      3. Focus on acquiring culture and gaining knowledge rather than material wealth
    3. The esteem others hold them in.
  4. Beauty
    1. The gift of beauty is not one which should be lightly thrown away it is an invitation to others to like us and should be used accordingly
  5. Health
    1. Health is the foundation of happiness
    2. Health accounts more for happiness than nearly any other factor.
    3. A sound mind in a sound body is the foundation for all happiness and without which it is very difficult if not impossible to be happy.
    4. For great health avoid every excess and exercise regularly – even the trees must be shaken by the wind in order to thrive.
    5. Therefore any action which deprives us of health is a poor decision as 9/10 of our happiness comes from health
  6. Boredom
    1. The greater one is in their wealth or knowledge, the less susceptible they are to boredom extravagance and other vices.
    2. The wise man aims for a life free from pain and annoyances and seeks one of leisure and quiet.  The less wise a man is, the more apt he is to become bored for when he has nothing to do, his intellect does not turn on and he loses interest in everything around him.
    3. With time, leisure, and intellect, truth becomes clear
  7. Being Self-Sufficient
    1. Happiness is to be self-sufficient which is why wise man needs a little outside stimulation and socialize less on average than the normal person
  8. One can learn best from the extreme examples for they give us a magnified looked at our own nature
  9. Man never feels the pain of not getting what he has never known to ask for
  10. What is worth doing is hard to do
  11. Rank and honor and pride are tied to what others think is useful and not truly what you want to do or what you think is useful or how you best spend your time.
What I got out of it
  1. Striving for leisure and lots of time to read and think are worthy goals; health is at the heart of happiness; it is one’s inner happiness which lasts and paints external circumstances

Acres of Diamonds by Russell Conwell

Summary
  1. Change is never “out there”, it can start where you are, right where you are
Key Takeaways
  1. Most of us look for success anywhere and everywhere except right where we stand, and yet that’s where success can be found. It makes not so much difference where you are as who you are.
  2. To make money honestly is to preach the gospel. 98 out of 100 of the richest Americans are rich because they are honest. That is why they care on great enterprises and find plenty of people to work with them. It is because they are honest men
  3. Money is power and you ought to be reasonably ambitious to have it. You ought because you can do more good with it than you could without it.
  4. Love is the grandest thing on God’s earth, but fortunate the lover who has plenty of money.
  5. A man can judge very well what he is worth by what he receives
  6. The difficulty was that I had not learned then that the foundation of godliness and the foundation principle of success in business are both the same precisely. Treat others as you would be treated, do this kindness and you shall receive rewards yourself which it will be your duty to take
  7. The man who has gone through life dividing always with his fellow men, making and demanding his own rights and his own profits, and giving it to every other man his rights and profits, lives every day, and not only that, but it is the royal road to great wealth
  8. The moment a young man or woman gets more money than he or she has grown to by practical experience, that moment he has gotten a curse. Don’t regard an inheritance as a help. There is no class of people to be pitied so much as the inexperienced sons and daughters of the rich of our generation. I pity the rich man’s son. He can never know the best things in life. One of the best things in our life is when a young man has earned his own living, and when he becomes engaged to some lovely young woman, and makes up his mind to have a home of his own. Then with that love comes also that divine inspiration toward better things, and he begins to save his money. He begins to leave off his bad habits and put money in the bank.
  9. The discipline of a poor boy is worth more than a university education to any man. Just ask Vanderbilt’s son who took a $3/week job after he learned his father earned his fortune all by himself and wouldn’t take any of his father’s money
  10. Known demand. That one thing is the secret of success. You must first know the demand. You must first know what people need, and then invest yourself where you are most needed. When you know what people need you have gotten more knowledge of a fortune than any amount of capital can give you
  11. True greatness is often unrecognized
  12. Lincoln’s rule was this: whatsoever he had to do at all, he put his whole mind into it and held it and held it all there until that was all done. That makes men great almost anywhere
  13. Greatness consists not in the holding of some future office, but really consists in doing great deeds with little means and the accomplishment of vast purposes from the private ranks of life. To be great at all, one must be great here, now.
What I got out of it
  1. Every minute of every day allows us an opportunity to change, to take advantage of an opportunity. Known demand is a key rule in business

Good Profit: How Creating Value for Others Built One of the World’s Most Successful Companies by Charles G. Koch

Summary
  1. Charles Koch describes his management philosophy, Market Based Management, how it has evolved over time, and how it has been put to use at Koch Industries. MBM emphasizes Principled Entrepreneurship over corporate welfare, virtue over talent, challenge over hierarchy, comparative advantage over job title, and rewards for long-term value creation over managing to budgets.
Key Takeaways
  1. Market Based Management
    1. Charles’ goal when he was young was to discover the principles that best enable people to flourish as they live and work together. He grouped his findings into what is now known as MBM. MBM is a reality based tools that helps employees problem solve without explicitly being told what to do and this requires a simple structure that is deeply understood by all. It’s goal is to create spontaneous order by providing a simplified set of guiding principles and mental models to guide their behaviors and decisions.
    2. The system must be set up so that everyone knows what the right thing to do is and wants to do it, without overly detailed explanations or rules. Enlightened-self interest gets people to do the right thing for others as it also helps themselves
    3. MBM prompts us to focus on understanding consumers’ unmet needs and finding ways to satisfy them. We strive to do this faster and better than existing and potential competitors. This requires that we continuously improve our existing capabilities, such as sales, marketing, operations, distribution, finance, technology, and R&D
    4. MBM guiding principles – integrity, compliance, value creation, customer focus, knowledge, change, respect, fulfillment.
    5. Companies must realize they are not competing just on price and output of existing products. They have to relentlessly strive to come up with new and better products and produce them more efficiently than the alternatives. They also need to constantly improve the way they’re organized, so they can innovate and eliminate waste better than their competitors. This is what MBM enables Koch to do.
    6. No one can decide which products and services a customer values better than the customer. Dedicating ourselves to satisfying what she values is showing respect for her. This is what generates good profit. Bad profit comes from disrespecting customers by making them subsidize our business with their tax dollars and higher prices, siphoning away the good profit other companies could have earned
    7. Over time, we have made changes, not only to our vision, but to our entire approach to recruitment and management, our internships, university relationships, junior military outreach, trade school relationships, compensation system, opportunity origination networks, methods for achieving environmental and safety excellence, and MBM training and application programs.
    8. MBM strives to create a spontaneous order of self-actualizing people by hiring, retaining, and motivating those who internalize and exemplify all ten Guiding Principles – those with integrity and humility who want to create real value. Toward this end, it’s important for leaders to understand the potential and the subjective values of their employees. This is impossible without establishing open and honest communication in order to know employees well enough on a personal level to do so. For some employees, non-financial incentives – such as being praised for a job well done – can be as important as financial incentives. But care must be taken to ensure that such praise is truly earned
    9. MBM is broken down into five core areas including vision, virtues and talents, knowledge process, decision rights, and incentives. These five areas lead to emergent effects as the whole is greater than sum of its parts and become mutually reinforcing. This is a never ending process of learning and improvement and just like the Red Queen Effect, stasis equals death. Even successful companies struggle to keep up because, given human nature, we all tend to become complacent, self-protective, and less innovative as we succeed. It can be far more difficult to overcome success than adversity. I think often about a lesson my father impressed on me at an early age: “Often adversity is a blessing in disguise and is certainly the greatest character builder”
      1. Vision
        1. Determining where and how the organization can create the greatest long-term value. Koch’s is different than most as its focused on value creation and people, not product, industry, profit, or anything else. Koch must create real, sustainable value for its customers, for society, and for itself. It can only do so by inspiring and attracting customers, suppliers, and partners.
        2. Having a clear vision is critical to attracting the best talent. Understanding what a business is trying to achieve and how it creates value not only enables employees to focus and prioritize, it helps them develop and find fulfillment. Having a shared vision guides the development of roles, responsibilities, and expectations. That’s why getting the vision right, helping employees (especially leaders) internalize it, and updating it as often as necessary is essential. Because the future is unknown and unknowable, a company’s vision needs to be open-ended and to embrace creative destruction on a fundamental level. In our experience, a company tends to be better served when it is capability-focused rather than industry-focused. The breadth of a company’s vision should vary with the breadth of its capabilities. At the same time, a business must have a vision specific enough to guide its strategies, decision making, allocation of resources, and the roles, responsibilities, and expectations of all employees. Each vision also needs to be aspirational in order to expand the thinking of leaders and employees through the organization.
        3. Koch underscores that in order to achieve long-term success a business cannot rely on short-term profits but must accept the necessity of what economist Schumpeter calls “creative destruction.” This means that a firm must innovate at least as quickly as its most effective competitor. Building on these insights, Koch explains that at the heart of MBM is the understanding that the role of business is to help people improve their lives by providing products and services they value more highly than their alternatives, and to do so while consuming fewer resources.
        4. Koch’s vision is its north star and acts as a strategic guide which is constant and ever changing and drives the innovation culture and values of the organization
        5. Koch’s vision:
          1. Remain family owned, well-diversified, stable and financially conservative
          2. Grow organically faster than inflation, and achieve additional growth through acquisitions.
          3. Be an employer of choice through extensive team member development and engagement activities
          4. Have our portfolio businesses recognized as “best in class” within their respective industries
          5. Be model corporate citizens in the communities we call home
      2. ​Virtue and Talents
        1. Helping ensure that people with the right values, skills and capabilities are hired, retained and developed
        2. The company has a list of ten “Guiding Principles,” which include integrity, compliance, value creation, Principled Entrepreneurship, customer focus, knowledge, change, humility, respect, and fulfillment. Interviews are based around these traits and open-ended questions are used to discern a candidate’s probability of success in demonstrating the desired traits. Once interviews are completed, a challenge session among the recruiter, interviewers, and hiring manager is held to ensure the best knowledge is shared when making a hiring determination. Employee referrals have resulted in some of our best hires and we have also developed strategic relationships with external sources, including search firms familiar with MBM and our Guiding Principles. We invest heavily in college recruiting efforts and a well-developed internship program
        3. No matter how difficult the role is to fill, it is critical that we not lower our standards. A bad hiring decision is much more costly in many, many ways than is the delay in finding the right candidate
        4. There are many different kinds of intelligence and they should all be taken into account: interpersonal, intrapersonal, linguistic, logical-mathematical, spatial, naturalist, bodily-kinesthetic, and musical
      3. ​Knowledge Processes
        1. ​Creating, acquiring, sharing and applying relevant knowledge, and measuring and tracking profitability
        2. Knowing why something is profitable is often as valuable as knowing what is profitable.
        3. Benchmarking involves identifying, understanding, and adopting superior practices from anywhere in the world – internally, competitors, great businesses in any field.
      4. ​​​Decision Rights
        1. ​Ensuring the right people are in the right roles with the right authority to make decisions and holding them accountable. This should demonstrate an employee’s comparative advantages.
        2. The bestowal of decision rights upon an individual, moreover, should not be predicated upon that individual’s position in the corporate hierarchy.
        3. Many of the things that go wrong or opportunities that go unrealized in business are a result of the tragedy of the commons – shared areas with unclear (or nonexistent) demarcation of responsibilities. At Koch, we use decision rights to replicate the benefits and responsibilities of property rights in society. Just as we think of employees as entrepreneurs at Koch, we think of decision rights as property rights in the organization. Unless people have clearly defined areas of responsibility, it’s difficult – if not impossible – to elicit beneficial proactive behavior, or to hold people accountable when things go wrong. When no one has clear ownership of a resource, no one can be help responsible for its efficient use. In MBM, decision rights are synonymous with authority. If you have the decision rights to decide something, not only do you have the authority to decide it; you are responsible and accountable for it. ​
        4. Decision rights should reflect an employee’s demonstrated comparative advantages. An employee’s comparative advantages are evident in those activities for which she can create the greatest value compared to the opportunity cost of her time. When these are optimized among a group, the value it creates is maximized. Employees who focus on their comparative advantages and consistently make good decisions will have expanding decision rights, regardless of their role or position in the organization. Understanding and applying this concept – that the person with the comparative advantage to make that decision well (not necessarily the highest-ranking person) should be the decision maker – leads to greater value creation.
        5. Competitively advantaged innovation requires working on the best opportunities, establishing a clear owner, having the right people in the right roles, effectively experimenting, rapidly and efficiently scaling up, and finding the balance between short and longer-term disruptive innovations. In other words, the very nature of innovation requires a dynamic approach to decision rights, with frequent reviews and adjustments. ​
      5. Incentives
        1. The first goal of incentives is to harmonize the interests of the individual with those of the company. This reinforces our individual employee’s desire to do the right thing and help the company prosper. Second, compensation should be consistent with the notion that no two employees are alike; thus, their compensation can vary considerably depending on the value of their contributions. As a result of difference in vision, desire, values, and ability, people vary in the advantage they take of the nearly limitless opportunities to create value. This is why two employees performing similar roles may well be compensated differently. Third, no limit should be put on an employee’s compensation, so employees will not put a limit on the value they create. Finally, incentives should be structured in such a way that the company can effectively attract, motivate, and retain principle entrepreneurs
        2. Rewarding people according to the value they create for the organization. There are several tools to accomplish this, including base pay adjustments, annual incentive compensation, spot bonuses, deferred compensation, and other incentives. A key role of managers is to retain and motivate employees who are adding superior value. By paying for value created, we help ensure the firm’s competitiveness
        3. Important to align incentives across business units so that there is no in-fighting
        4. The value of missed opportunities and avoidance of errors should also try to be estimated and included. Makes opportunity cost tangible by taking missed opportunities into account with bonuses and salaries
        5. Koch advises entrepreneurs to stay private no matter how big their company gets
        6. Incentives are incredibly important. Koch incentivizes its employees by paying on marginal contribution and value created in their unit and then based on their contribution. It will never be perfect but it must be directionally correct and the reasoning behind it must be explained as well. Must signal what is valued most highly and doing so in a principled manner. Must be financial and non-financial – meaning, challenge, competition, praise, belief in the mission, being part of a successful team, personal growth
        7. Incentives are as important for external counter parties such as customers, suppliers, contractors, shareholders, distributors, agents, trading partners, former industry employees, specialists, universities, technology developers, consultants, communities, and governments. Aligning incentives with performance is almost always effective but must take these external parties into account too. Must understand what each values and deliver on it. Communities want a good neighbor, who takes care of the area, protects the environment, operates safely, and provides good jobs
        8. Budgets are often useless and sometimes counterproductive if they perverse behavior through misaligned incentives
        9. Framework for determining incentive pay (never perfect but directionally correct and must be explained to the employee)
          1. Determine the value created by the employee’s business unit, facility, or service group to Koch, considering current earnings and return on capital, change in capabilities, competitive position, and the risk-adjusted value of innovations and growth initiatives – that is, the prospect for future earnings
          2. After thoroughly assessing all the employee’s contributions to the value the unit created (positive and negative), we compare this to the contribution necessary for her base compensation. To the extent that her contribution exceeds this amount, we award a bonus or other incentive compensation based on that difference
          3. Deductions are taken for any compliance or EH&S problems to which the employee has contributed. If such problems are serious enough, they could wipe out the employee’s entire award. Additions to, or subtractions from, the employee’s compensation will also be made if she has had a significant positive (or negative) effect on the unit’s culture
    10. Good Profit
      1. ​Good Profit is about providing value to the customer while also benefiting society and comes from Principled Entrepreneurship: creating superior value while using fewer resources and always acting lawfully and with integrity. It comes from contributing something to society. This is the vision of Market Based Management which Charles Koch began developing in the ’60s. It takes a win-win framework and allows Koch Industries to adapt and deal with change more effectively than others. They have prospered through the years with no government aid or external help because their focus is always on producing value. MBM, while simple, is not easy. The whole organization must understand the principles so deeply that they can adapt to any problems or circumstances
      2. Good Profit is what follows when long-term value is generated for customers, employers, shareholders, and society. MBM generates Good Profit
      3. Good Profit 101: providing the best hassle-free service to our clients at the lowest cost to them and attracting the best employees based on the opportunities we offered. Our goal was – and still is – to be the counterparty of choice to our customers, vendors, communities, and employees
      4. The most reliable signal that a business is using reality-grounded mental models and providing service that customers truly value is a profit made over time under beneficial rules of just conduct
      5. Opportunity Cost – the true cost of any activity is the highest-value activity forgone
      6. Subjective Value – At Koch we also urge our salespeople to understand each customer’s subjective values and tailor the way we deal with them accordingly. Many public companies value steady, predictable earnings more than larger (on average) earnings that are more volatile, since steady earnings tend to result in a higher stock price. Because of this difference in subjective values between us and our customers, it can be mutually beneficial for us to absorb the price risk in our contracts, and for them to compensate us for it. Koch is always willing to do this kind of win-win business. Listen to partners particular needs and design structures that suit both parties well. Strive for speed, certainty, confidentiality, efficient and responsive deal screening, and to concede terms that are important to the seller but not as important to Koch.
    11. 8 steps in the Decision Making Framework
      1. Briefly describe the authority being requested
      2. Give the background and a summary of the value proposition
      3. Outline the objective with the strategic fit
      4. Prepare an economic summary with a base case, as well as other plausible scenarios that could make the project much better or worse
      5. Identify the key value drivers
      6. Describe the key risks and mitigants
      7. List the alternatives considered and why the one shown is best
      8. Project the timeline for future steps
        1. Decision traps – overconfidence, framing, anchoring, status quo bias, sunk costs, information / confirmation bias, confusing random events with patterns, allowing a leader’s past rejections to stop the consideration of good future opportunities, conservatism trap
    12. Ludwig von Mises (Human Action) was a big influence in Koch’s philosophy and management style (as was Polanyi’s Republic of Science)
      1. The more books I read, the more passionately I embraced the truth that widespread human well-being demands a system that clearly defines and protects private property rights, allows people to speak freely without intimidation or legal repercussions, refrains from interference with private parties’ agreements and exchanges, and allows human action – rather than arbitrary notions about how much things “should” cost – to guide prices. Allowing people the freedom to pursue their own interests (within the limits of just conduct) is the best and only sustainable way to achieve societal progress. For individuals to develop and have a chance at happiness, they must be free to make their own choices and mistakes, rather than be forced to accept choices made for them by others. As I digested this and went about my business, it dawned on me that these principles are fundamental to the well-being not only of societies – as I learned through my interdisciplinary studies – but also of organizations, which are essentially small societies. When encountering a challenge at work (such as sunk cost or competitive disadvantage), I began responding with the principles of a free society in mind. And sure enough, one concept at a time, I saw that that the principles that worked in society also worked in an organization.
      2. As a young man Charles spent his nights in Wichita Kansas reading every subject trying to understand what principle allows people to flourish. He took ideas from all disciplines such as physics and Newton’s Third Law of Motion regarding reciprocation. Came to understand that organizations are like miniature societies and what would benefit society at large would also benefit organizations
    13. Experimental Discovery > A Grand Plan
      1. ​Must have an experimental discovery mindset rather than a grand plan mindset. Must also know when you are experimenting and bet accordingly. The point is that progress – whether in business, an economy, or science – comes through experimentation and failure. Those who favor a “grand plan” over experimentation fail to understand the role that failed experiments play in creating progress in society. Failures quickly and efficiently signal what doesn’t work, minimizing waste and redirecting scarce resources to what does work. A market economy is an experimental discovery process, in which business failures are inevitable and any attempt to eliminate them only ensures even greater failures. For experimental discovery to work, we have to not only design experiments properly but also recognize when we are experimenting so we can limit the bet accordingly. Koch companies have suffered whenever we forgot we were experimenting and made bets as if the risks were small when they were not.
      2. Smith and Hayek demonstrated that prosperity can take place only through spontaneous order, an order that results from unscripted human action, not human design.
      3. The process of discovery begins when we observe, often vaguely, a gap between what is and what could be. Our intuition tells us something better is just beyond the range of our mind’s eye. To build a culture of discovery, we must encourage, not discourage, the passionate pursuit of hunches (no matter the origin!).
    14. Metrics
      1. Knowing why something is profitable is often as valuable as knowing what is profitable. For this reason, a business must also develop measures that help it understand the drivers of profitability. Prices and profit and loss tell us what people value and the best methods and resources to satisfy those values. They are also the primary indicators of whether we are doing the right thing as a company. In a true market economy, one in which prices are allowed to freely adjust, profit and loss is the market’s objective measure of the value a business is contributing to society. To succeed, a business must not only develop profit and loss measures, but also determine their underlying drivers, in order to understand what is adding value, what is not, and why. This knowledge informs its vision and strategies, leads to innovations, creates opportunities to eliminate waste, and guides continuous improvement
      2. The most valuable measures keep us on track in advancing our vision by enabling us to identify opportunities and problems, and by stimulating innovations,
      3. A successful organization should measure – and do its best to understand – the profitability (and profitability drivers) of its assets, products, strategies, customers, agreements, and employees, and anything else for which it is practical to do so
      4. When measuring, accuracy should always be emphasized over precision. As we use the terms, accuracy is the degree of correctness that creates value. Precision goes beyond that, to near perfection. Perfection, thus, is thus the enemy of progress
      5. Most decisions should be made using marginal analysis. This requires understanding the difference between costs and benefits that are marginal and those that are not, such as sunk costs. Only by making decisions on the appropriate margin will a business consistently enhance its profitability and eliminate waste. That margin will vary enormously depending on the decision.
    15. Other
      1. ​Charles father, Fred, founded what would later become Koch Industries. When Charles joined in 1961 it had a net worth of about $21 million and as of 2015 the number has reached an approximate $100 billion. Father always stressed integrity, humility, character and the fact that adversity is the best way to improve your character and to learn. His father put them to work full-time when he was young following that his son would never become a country club bum
      2. Since Charles took over, they have reinvested 90% if their profits and aim to double profits every 6 years (~12% annual growth)
      3. Their strong balance sheet insured their suppliers that they would pay in full and promptly. Their goal was always to be the counterparty of choice
      4. Corporate welfare is damaging because it limits competition, innovation, and customer options
      5. Koch makes acquisitions when they can provide additional value through their internal capabilities, can improve existing businesses or provide new platforms for growth. I often think of what we do as bricklaying. Or perhaps more precisely, stonemasonry. Once a stone has been carefully selected and set, it shapes a new space in which the mason can set yet another well chosen stone. Each stone is different, but they all fit together to create a framework that is mutually reinforcing
      6. Getting the right people was Charles’ main focus from day one
      7. Creative destruction, while painful for some, is a net positive for society while corporate welfare is a net negative
      8. The man who understands principles can apply his own methods, the man who tries methods, ignoring principles, is sure to have trouble
      9. Deciding the order in which to do things can be just as important in deciding what to do. Three step process: quantify, simplify, prioritize
      10. Hiring, retaining, teaching, and inspiring people is one of the most important functions of the organization. You should aim to always hire virtuous people regardless of open positions. Coach employees to be the best that they can and consider moving them around within the company if their skills aren’t lined up with their role
      11. Avoid entering into partnerships without an exit mechanism
      12. The apprentice model has been extremely effective at teaching newer hires. There are 4 stages – I do, you watch; I do, you help; you do, I help; you do, I watch
      13. Every organization has its own culture. If that culture is not created consciously and purposively, it will degenerate into a cult of personality or an anything goes environment. You can never think of yourself as too big or too good to fail. Koch’s culture comes from the framework of the free society, where innovation and productivity thrive – to the degree that the framework is upheld. The second category is the theories of philosophers and psychologists whose behavioral prescriptions strike me as refreshingly reality-based – thinkers such as Hayek, Polanyi, and Maslow. The third is my own life experience, which was spent working with all different kinds of people.
What I got out of it
  1. An amazing look into what has turned Koch from a $21m operation in the ’60s to an over $100b organization today. Simple (but not easy) principles which are scale invariant, win-win, sustainable, and adaptable. An organization is a mini free-society and what works at the largest level of society, works just as well at the level of organizations. Treat people as they want to be treated, be trusting, reward people for the value they create

The Way of Zen by Alan Watts

Summary
  1. Alan Watts introduces Zen Buddhism to a western audience by discussing zen’s history, the principles and practices, za-zen meditations, koans, and how to incorporate into your life
Key Takeaways
  1. The western mind attaches the idea of “self” more closely to what he or she has done or was than who they currently are
  2. Must learn how to combine peripheral with linear thinking. The hunch with rationality, trusting our gut and the feel of the situation as much as what we rationally know about it
  3. The minute nirvana becomes a desire, it becomes Sankara (suffering). Real nirvana cannot be conceived.
  4. One has to know in one’s bones that there is nothing to be grasped. There is no way to enlightenment that requires any force. Must surrender completely
  5. Everything is relative, non dual. Things can only exist in relation to others. Only when we begin classifying things does duality arise
  6. All beings are endowed with a Buddha nature. We simply forget it. There is nothing to achieve, we just need to go back to our original state. To seek Buddhahood is to deny you already have it
  7. The contemplation and distinction between right and wrong is a common sickness of the mind
What I got out of it
  1. A thorough and informative history of zen and a good overview of the main themes, terms, and characters

Finite and Infinite Games: A Vision of Life as Play and Possibility by James P. Carse

I got so much out of this book that I made a bit of a more formal write-up: On Finite and Infinite Games