Coach Doug Beal had to take big swings and unusual tactics to take his team to the next level. He changed how teams were organized, introduced specialization, put USA’s men’s volleyball team on the map. Many were critical – or at least skeptical – of his methods, but they worked. He made sure his team was all-in and was one of the early adopters of mental strength/health training
Build trust, specialize talent, clarify roles, establish feedback, set goals, improve the culture, foster innovation
What is the mission and vision of the organization? What ground rules can we adopt to ensure we are a high-performing team?
One of Doug’s biggest regrets was not journaling about the journey
The second element Murray emphasized was that teams are goal-directed. High-performing teams have clarity around both the mission and the ultimate outcome they are trying to achieve
Great teams embody a degree of openness and adaptability
What I got out of it
Amazing story about leadership, culture, and innovation. I had the great pleasure of sitting down with Sean and Doug to learn more about their story. You can see that video here
Caro’s legendary book about the rise of LBJ from Texas Hill Country to Senator
Social justice was the key platform for LBJ and the war in Vietnam became the black eye that haunted him to his last days. He was caught in many lies – both big and small – and the media coined “credibility gap” to describe his situation. LBJ drove a great divide, both domestically and internationally. Before him, the president was revered, feared even, and that image forever changed after his presidency
LBJ had a nose for power and would destroy anything in his way to achieving it. He had a nearly unlimited capacity for deceit and betrayal, coupled with the ability to mobilize government to help the downtrodden. His whole life and presidency brings up the question between means and ends. Many of the noble ends – especially with social justice – would likely not be where they are today if it weren’t for the ignoble means in which LBJ took to accomplish them. There is no more important question his life covers than between means and ends
LBJ started his political career by stealing thousands of votes to get into the Senate. This has become known as the “87 votes”
LBJ was the first political candidate to campaign in a modern way with advertising firms, helicopter, use of electronic media to influence voters. It was new politics vs old
He grew up very poor in the Texas hill country. He was driven by fear – fear of having to go back, fear of having nothing, worst of all, fear of being like his daddy. His dad was a successful politician for sometime but a terrible businessman. He eventually was penniless but was too proud to change his ways, which led to ridicule. The Johnson’s became the joke of the town. From then on, it wasn’t enough just to lead, he had to dominate. He had to be the one giving orders and never taking them, he had to stand out from the crowd
He very consciously tried to earn the trust and affection of influential older men and sarcastically became known as a “professional son”. FDR helped LBJ with a lot, giving him his backing during his political runs
LBJ was a master at counting votes, solving problems and raising money. He was fun and charismatic
He was an incredible bullshitter but the thing that separated him was that he eventually came to wholeheartedly believe his own bullshit
LBJ embarrassed Ladybird in public and treated her as hired help. He had an affair, he was rude to her in front of others, he was demeaning. Even though she took it all in stride and never lost her patience, beneath her shyness she was incredibly ambitious and determined. She was incredibly well read and able. She eventually became a big part of his political life, helping organize and run campaigns
While he was in Congress, he did everything he could to keep his opinion to himself. He avoided saying anything substantive, saying what he knew the other side wanted to hear.
LBJ believed – to the point of obsession – that he’d die early like his father. This gave him an insane drive to achieve things while he could. Normal means of ascent were too slow
Coke Stevenson was governor and became known as Mr Texas. He had his own ranch, got up at 5 every morning to read, never made a campaign promise, was the cowboy politician who never spoke an ill word about anyone. He hated politics but loved government. He truly loved the ranch he had built with his own hands. LBJ and Stevenson went up against each other for Senator in 1948. LBJ would use modern means such as radio and press and advertising whereas Stevenson would do it the old fashioned way with road trips and small gatherings. Stevenson was far more popular but because of this difference, LBJ actually had a chance. LBJ also was the first to travel by helicopter to various small towns around Texas. He was ridiculed at first, but it was a stroke of genius. It was novel and drew a crowd, but most of all it eliminated the daunting task of traversing a state the size of Texas. LBJ’s Machiavellian tactics against Stevenson are legendary. He used money, psychology, press, antics, and more. Anything to give voters some doubt and to tarnish Stevenson’s reputation. He had to utilize brash and unconventional means because anything else would utterly fail. He knew that Stevenson would never do anything he was pressured to do. Even though he was for a labor bill, Johnson said he wasn’t and that if Stevenson now said he was, he’d be flip flopping. It worked perfectly. Stevenson didn’t want to play politics and didn’t speak out soon enough. It was enough to introduce some doubt
LBJ was a political genius, but had many other world class talents too. He would see the simple answer in a complex situation. He’d be able to think clearly even under the most intense pressure. He’d be able to persuade any man to come work for him and know exactly how to make the most of their talents. To him, every man was a tool and knew to use them best
Although it went to court and nearly turned against LBJ, it was never conclusively proven that LBJ had stolen the election. While he won, it formed the foundation for misgivings and distrust that would follow him all the way to the White House. The stealing of the election was essentially confirmed later on. LBJ was one of the slickest politicians – in the most vulgar form of the word – and would do anything to amass power. He was amoral in his approach and would use it in the senate to become the most powerful majority leader up to that point
What I got out of it
An insanely good book. I felt like I was there and really came to know each character. Caro’s ability to transport you into the moment and share the details and personality traits of these people who were obsessed with power is just incredible
Good strategy almost always looks this simple and obvious and does not take a thick deck of PowerPoint slides to explain. It does not pop out of some “strategic management” tool, matrix, chart, triangle, or fill-in-the-blanks scheme. Instead, a talented leader identifies the one or two critical issues in the situation—the pivot points that can multiply the effectiveness of effort—and then focuses and concentrates action and resources on them. A strategy is like a lever that magnifies force. Some fundamental sources of power used in good strategies: leverage, proximate objectives, chain-link systems, design, focus, growth, advantage, dynamics, inertia, and entropy.
The core of strategy work is always the same: discovering the critical factors in a situation and designing a way of coordinating and focusing actions to deal with those factors. A leader’s most important responsibility is identifying the biggest challenges to forward progress and devising a coherent approach to overcoming them.
A good strategy honestly acknowledges the challenges being faced and provides an approach to overcoming them.
Strategy is about how an organization will move forward. Doing strategy is figuring out how to advance the organization’s interests.
The most basic idea of strategy is the application of strength against weakness. Or, if you prefer, strength applied to the most promising opportunity.
Having a coherent strategy—one that coordinates policies and actions. A good strategy doesn’t just draw on existing strength; it creates strength through the coherence of its design.
The creation of new strengths through subtle shifts in viewpoint. An insightful reframing of a competitive situation can create whole new patterns of advantage and weakness. The most powerful strategies arise from such game-changing insights.
Good strategy is unexpected
Good strategy requires leaders who are willing and able to say no to a wide variety of actions and interests. Strategy is at least as much about what an organization does not do as it is about what it does.
Half of what alert participants learn in a strategy exercise is to consider the competition even when no one tells you to do it in advance. Looking just at the actions of a winning firm, you see only part of the picture. Whenever an organization succeeds greatly, there is also, at the same time, either blocked or failed competition.
Copying elements of its strategy piecemeal, there will be little benefit. A competitor would have to adopt the whole design, not just a part of it.
The hidden power of Wal-Mart’s strategy came from a shift in perspective. Lacking that perspective, Kmart saw Wal-Mart like Goliath saw David—smaller and less experienced in the big leagues. The network replaced the store. A regional network of 150 stores serves a population of millions! Walton didn’t break the conventional wisdom; he broke the old definition of a store.
Having a true competitive strategy meant engaging in actions that imposed exorbitant costs on the other side.
To detect a bad strategy, look for one or more of its four major hallmarks:
Failure to face the challenge.
Mistaking goals for strategy.
Bad strategic objectives.
A hallmark of true expertise and insight is making a complex subject understandable. A hallmark of mediocrity and bad strategy is unnecessary complexity—a flurry of fluff masking an absence of substance.
A leader’s most important job is creating and constantly adjusting this strategic bridge between goals and objectives.
The second form of bad strategic objectives is one that is “blue sky.” A good strategy defines a critical challenge. What is more, it builds a bridge between that challenge and action, between desire and immediate objectives that lie within grasp.
Bad strategy is vacuous and superficial, has internal contradictions, and doesn’t define or address the problem. Bad strategy generates a feeling of dull annoyance when you have to listen to it or read it.
Strategy is scarcity’s child and to have a strategy, rather than vague aspirations, is to choose one path and eschew others. There is difficult psychological, political, and organizational work in saying “no” to whole worlds of hopes, dreams, and aspirations.
Good strategy is coherent action backed up by an argument, an effective mixture of thought and action with a basic underlying structure I call the kernel. The kernel of a strategy contains three elements:
A diagnosis that defines or explains the nature of the challenge.
A guiding policy for dealing with the challenge.
A set of coherent actions that are designed to carry out the guiding policy.
John gave me a sidelong look and said, “It looks to me as if there is really only one question you are asking in each case. That question is ‘What’s going on here?’ ” John’s comment was something I had never heard said explicitly, but it was instantly and obviously correct. A great deal of strategy work is trying to figure out what is going on. Not just deciding what to do, but the more fundamental problem of comprehending the situation.
Furthermore, a good strategic diagnosis does more than explain a situation—it also defines a domain of action.
Good strategy is not just “what” you are trying to do. It is also “why” and “how” you are doing it. A good guiding policy tackles the obstacles identified in the diagnosis by creating or drawing upon sources of advantage. Indeed, the heart of the matter in strategy is usually advantage. Just as a lever uses mechanical advantage to multiply force, strategic advantage multiplies the effectiveness of resources and/or actions. The coordination of action provides the most basic source of leverage or advantage available in strategy. A strategy coordinates action to address a specific challenge.
The idea that coordination, by itself, can be a source of advantage is a very deep principle. It is often underappreciated because people tend to think of coordination in terms of continuing mutual adjustments among agents. Strategic coordination, or coherence, is not ad hoc mutual adjustment. It is coherence imposed on a system by policy and design.
Folly is the direct pursuit of happiness and beauty. —GEORGE BERNARD SHAW
One of a leader’s most powerful tools is the creation of a good proximate objective—one that is close enough at hand to be feasible. Proximate objectives not only cascade down hierarchies; they cascade in time.
IKEA teaches us that in building sustained strategic advantage, talented leaders seek to create constellations of activities that are chain-linked. This adds extra effectiveness to the strategy and makes competitive imitation difficult. What is especially fascinating is that both excellence and being stuck are reflections of chain-link logic.
When someone says “Managers are decision makers,” they are not talking about master strategists, for a master strategist is a designer.
At the core, strategy is about focus, and most complex organizations don’t focus their resources. Instead, they pursue multiple goals at once, not concentrating enough resources to achieve a breakthrough in any of them.”
Increasing value requires a strategy for progress on at least one of four different fronts: deepening advantages, broadening the extent of advantages, creating higher demand for advantaged products or services, or strengthening the isolating mechanisms that block easy replication and imitation by competitors.
Follow the story of Nvidia and you will clearly see the kernel of a good strategy at work: diagnosis, guiding policy, and coherent action. You will also glimpse almost every building block of good strategy: intelligent anticipation, a guiding policy that reduced complexity, the power of design, focus, using advantage, riding a dynamic wave of change, and the important role played by the inertia and disarray of rivals.
A new strategy is, in the language of science, a hypothesis, and its implementation is an experiment. As results appear, good leaders learn more about what does and doesn’t work and adjust their strategies accordingly.
Joe Santos’s comments imply that incumbents had difficulty understanding Starbucks because it was vertically integrated—because it roasted, branded, and served its own coffee in its own company restaurants. Starbucks did not vertically integrate to purposefully confuse the competition. It did so in order to be able to mutually adjust multiple elements of its business and to capture the information generated by each element of its business operations.
To guide your own thinking in strategy work, you must cultivate three essential skills or habits.
First, you must have a variety of tools for fighting your own myopia and for guiding your own attention.
Second, you must develop the ability to question your own judgment. If your reasoning cannot withstand a vigorous attack, your strategy cannot be expected to stand in the face of real competition.
Third, you must cultivate the habit of making and recording judgments so that you can improve.
What I got out of it
Good strategy is simple. Good strategy is unexpected. Good strategy focuses on a small handful of critical factors and helps outline a path forward – it defines a domain of action. Good strategy creates exorbitant costs and ultimately blocks the competition. Good strategy is coherent and “chain-linked”
Types of opportunities – paradigm shift, new product / business model / me-too product
Opportunity recognition – markets that change and are receptive to change, badly understood (big and misunderstood), fast growing, incumbent players cannot move, little competition
Process of Opportunity Recognition – intuitive, analytical
Seek a mission-critical pain killer, not a vitamin
Be extremely specific in defining your customer
Great entrepreneurs tend to be generalists – breadth > depth
Founders need to understand the market, product, and execution. Need to be focused on value creation, not control
Risk Identification and Elimination – raise money to reduce key risks – market, technical, people, financial
Decision making – the implementor should be the decision maker
Flexibility – In the planning process, understanding the variables is more important than the plan. It is as important to understand the other players’ plans as it is to figure out your own plans
Focus is paramount – with limited time and resources, specialization is key – should be saying “no” to 9/10 things
Focus and speed are a startups’ key advantages
Split every problem to its smallest atomic problem
Be as useful as you can to others, have vision, form win/win alliances
Focus all your efforts to satisfy the first 20% of the market segment. the others will follow
Design partners, best references, proven success
People – overqualified so the company can grow into their skills
Processes must be scalable – at some point speed becomes a liability and the need to build systems to scale operations becomes obvious
Management needs to live 3-6 months in the future
What I got out of it
Interesting that Oliver Samwer, of Rocket Internet, started his entrepreneurial career from an academic angle. He certainly doesn’t abide by all the lessons – culture, for example – but fascinating to see the lessons he pulled out and applied (ruthlessly)
The volatility of this tug-of-war is hard to stomach. You must pay less attention to the day-to-day incremental advances and more on achieving an overall positive slope. And that’s entirely determined by how you navigate the messy middle. The middle of the journey is all about enduring the valleys and optimizing the peaks.
One of the greatest motivators is a sign of progress. Hardship is easier to tolerate when your work is being recognized (either through external validation or financial rewards), but long journeys don’t show progress in the traditional sense. When you have no customers, no audience, and nobody knows or cares to know about what you’re making, the greatest motivators have to be manufactured. Rather than fight the need for short-term rewards, you must hack your reward system to provide them. As you craft your team’s culture, lower the bar for how you define a “win.” Celebrate anything you can, from gaining a new customer to solving a particularly vexing problem. What should you celebrate? Progress and impact. As your team takes action and works their way down the list of things to do, it is often hard for them to feel the granularity of their progress and you need to compensate. Celebrate the moments when aggressive deadlines are met or beaten. Pop champagne when the work you’ve done makes a real impact.
Give your team the gratification of seeing their progress rather than just moving on. At Behance, we had “Done Walls” that were decorated with a collage of completed project plans, checklists, and sketches that literally surrounded us with the sensation of progress. And whenever I’m presenting a forward vision presentation to my team, I try to start with a few slides recapping what the team has already accomplished. Progress is the best motivator of future progress, but it must be merchandised sufficiently so that people feel it. While
It’s dangerous to celebrate accolades or circumstances that are not linked with productivity, like getting “press” that you paid for or winning awards that are not representative of your impact.
For strong companies, financing is a tactic. For weak companies, financing is a goal.
Society has a grand immune system designed to suppress new ideas. To keep the water running and sustain life’s other necessities, society’s natural resistance to ingenuity surfaces in the form of doubt, cynicism, and pressure to conform. It takes tremendous endurance to survive such resistance.
As a leader, you can’t always provide answers. And you shouldn’t, as the correct solution may still be premature. But what you can do is always add energy. This ability to turn negative conversations into positive ones is a trait I’ve always admired.
A friend who worked for Google cofounder and CEO Larry Page told me that when teams presented product and business goals to Larry, he would often reply, “What would it take to achieve 100x of what you’re proposing?”
When you feel lost in ambiguity, ask a different question. The perfect question is a key to clarity. It unlocks truth and opens minds.
Playing the long game requires moves that don’t map to traditional measures of productivity.
To foster patience for yourself and those you lead, pick a speed that will get you there, and then pace yourself. Celebrate persistence over time as much as the occasional short-term wins you have along the way.
The easy path will only take you to a crowded place. Be wary of the path of least resistance. It may look compelling in the short term but often proves less differentiating and defensible in the long term. Shortcuts tend to be less gratifying over time. The long game is the most difficult one to play and the most bountiful one to win.
The best way for a start-up to “disrupt” an industry is to be a thesis-driven outsider—someone who hasn’t been jaded by the industry but has a strong opinion for what should change. You then just have to stay alive long enough to become an expert so you can compete with the different skills and practices you bring.
Across so many teams I’ve worked with, I’ve marveled at just how quickly an idea takes hold when someone proactively does the underlying work no one else clearly owned. There is rarely a scarcity of process or ideas but there is often a scarcity of people willing to work outside the lines. Those who take initiative to contribute when it wasn’t their job become the leadership team of the newest stuff.
The future is drafted by people doing work they don’t have to do. You need to be one of those people—and hire them, too. There is too much wondering and talking, and too little doing. So don’t talk: do. Care indiscriminately. If you’re willing to actually do the work, you’ll have more influence than those who simply do their jobs.
James Murphy, the founder and front man of LCD Soundsystem, said it well: “The best way to complain is to make things.”
Pinterest’s Ben Silberman describes this process as “always reflecting backward and incorporating forward.” As he explains it, “I actually think you learn a lot more from your successes [than your mistakes]. There are a million reasons why something can fail, but usually very few reasons why something can work. When you want to learn to be a great runner—do you study slow people or fast people? I think taking time to understand why things succeed—whether they are your successes or others—is time well spent . . . you learn the most from things that go really well by asking why. Those are the things you want to understand and do more of.”
Great teams are more than the assembly of great people. On the contrary, great teams are ultimately grown, not gathered.
You can always get more resources, but resourcefulness is a competitive advantage. Resources become depleted. Resourcefulness does not.
Past initiative is the best indicator of future initiative. Look beyond the formal résumé and ask candidates about their interests and what they have done to pursue them. It doesn’t matter what the interests are—bonsai cultivation, writing poetry, whatever! Instead, gauge whether the candidate has a history of being proactive in advancing their interests.
Hire people who have endured adversity.
Your second conversation with a potential hire should feel a lot more interesting than your first. First impressions count for a lot, but if you can’t continually build on that energy, the relationship isn’t likely to have legs beyond the initial spark. I call this kind of fire-starting ability aligned dynamism, which is when ideas vary but energy levels and a value for the mission align; this is the source of the embers that will keep burning long after the initial flint.
Be frugal with everything except your bed, your chair, your space, and your team.
Not only does a strong culture tolerate some necessary ruckus, it gains its edge from it. People disagree and fight for their beliefs only when they are engaged enough to care.
Perhaps one of the most important unspoken roles of a leader through the messy middle of a project is that of internal marketer. For all the emphasis around obsessing over your customers and your public brand and message, there is surprisingly little focus on the internal brand and message.
Present your ideas, don’t promote them.
When it comes to speed and efficiency, the greatest risk is taking a shortcut in the one area that distinguishes you the most.
Simplicity / Design
Simple is sticky. It is very hard to make a product—or any customer experience—simple. It is even harder to keep it simple. The more obvious and intuitive a product is, the harder it is to optimize it without adding complication.
Great products don’t stay simple by not evolving; they stay simple by continually improving their core value while removing features and paring back aspects that aren’t central to the core.
Forcing yourself to have a “one feature in, one feature out” guideline will help you develop your product with a bias toward simplicity. While simplicity benefits your newest customers and the majority of your current customers, it also benefits your own process to grow your product and solve problems as they arise.
Beware of creativity that compromises familiarity.
The only time you should force new behaviors or terminology is when they enable something better
Effective design is invisible.
Never stop crafting the “first mile” of your product’s experience.
I’d argue that more than 30 percent of your energy should be allocated to the first mile of your product—even when you’re well into your journey. It’s the very top of your funnel for new users, and it therefore needs to be one of the most thought-out parts of your product, not an afterthought.
Optimize the first 30 seconds for laziness, vanity, and selfishness.
Your challenge is to create product experiences for two different mind-sets, one for your potential customers and one for your engaged customers. Initially, if you want your prospective customers to engage, think of them as lazy, vain, and selfish. Then for the customers who survive the first 30 seconds and actually come through the door, build a meaningful experience and relationship that lasts a lifetime.
If you feel the need to explain how to use your product rather than empowering new customers to jump in and feel successful on their own, you’ve either failed to design a sufficient first-mile experience or your product is too complicated.
The absolute best hook in the first mile of a user experience is doing things proactively for your customers. Once you help them feel successful and proud, your customers will engage more deeply and take the time to learn and unlock the greater potential of what you’ve created.
As you’re building new products and experiences for customers, consider how they will be novel—even gamelike—before they prove useful.
You need to prime your audience to the point where they know three things:
Why they’re there
What they can accomplish
What to do next
Empathy for those suffering the problem must come before your passion for the solution.
But be sure to define the purpose of every feature in your product before determining its fate. Is it to strengthen engagement, appease a very small set of important customers, or get new customers in the door? Features with a different purpose require a different measure.
Build your narrative before your product. – The narrative is not a description of what your product is or does, it is the story of how and why it must exist.
Our narrative was that technology needed to empower creative people to make ideas happen. By uploading their portfolios, creatives could get more exposure and attribution for their work, resulting in more job opportunities. We called it “creative meritocracy,” the idea of creative people getting opportunity based on the quality of their work rather than what agency they worked with, where they went to school, or whom they happened to know.
Ollie Johnstone and Frank Thomas, two of Walt Disney’s chief animators, once said of Walt Disney himself that “there were actually three different Walts: the dreamer, the realist, and the spoiler. You never knew which one was coming into your meeting.”
Contrary to logic, you don’t want to attract all of your customers right away. You want your first cohort of willing customers to be quite small so that you can communicate directly and provide an incredibly high level of touch. At the start of your business, you want to iron out the kinks. As you expand, you want to do so slowly.
Networks are served, not led
The best advice doesn’t instruct—it provokes. The benefits of soliciting wisdom from others is indisputable, but the real value of advice comes from reconciling its contradictions.
As someone who believes wholeheartedly that self-awareness is the greatest competitive advantage for a leader, I love the idea of developing tools and norms that promote it.
The science of business is scaling; the art of business is the things that don’t.
In the early days of Behance, I used to write personal emails to a handful of customers every day introducing myself, giving some suggestions for the portfolio they posted on Behance, and offering to answer any questions directly. Many of these exchanges became relationships that lasted years and yielded customer insights that we would have never garnered from a dashboard.
Genuine relationships with and between our members was our competitive advantage against other technology companies like Squarespace and Wix that sought to commoditize websites and online portfolios.
Our in-person events for five thousand people around the world would generate tens of thousands of social media posts, and the images would ultimately reach hundreds of thousands of people. But more important, these events prompted conversations and relationships that went far beyond our brand as a service and instead made it a lifestyle.
In your work, try to find the things you love that nobody else cares about.
There are two ways to build a network and source signal: growing surface area or going deep. In the beginning of your career, optimize for surface area. As you become more focused and a source of signal in your own right, you’ll want to shift from seeking surface area to going deep with a smaller group of people whom you respect. Rather than meeting as many people as possible, you’ll want to focus on the people you deem the most competent. You also need a margin to mine circumstantial opportunities and explore the unexpected.
The busier and more ambitious we get, the more protective and intentional we become of our time—but sometimes it’s too much. Ambition shouldn’t override opportunity.
Ego is rust. So much value and potential are destroyed in its slow decay. Achievement rarely ages well, unless you keep sanding it down.
I was struck by the man’s sense of peace and happiness. His smile and mannerisms carried no weight to them—the man seemed so incredibly content with his world. So, that’s what it looks like to end on your own terms, I thought to myself. It’s not just about moving on when you’re performing at the level you always wanted to be remembered for—the desire to “end on a high.” It’s about moving on when you feel fully satiated and can therefore allow yourself to pursue something different.
One of my favorite sayings from ancient times is “Wealth is ultimately feeling like you got your full portion.” When I finish a project, I aspire to feel full. And when I lay dying, I hope to look back on what I would consider a full life.
What I got out of it
Some valuable and deep insights on the building process and how to navigate through the “messy middle.” Topics around leadership, design, simplicity, and doing things that don’t scale will stick with me
Many CEOs put the success of their organization in jeopardy as they’re unwilling to face themselves and the 5 temptations of a CEO
Temptation 1 – placing ego over achievement.
Running a company is simple, but people make it complicated as they’re not willing to face their own issues, revealing their temptations for others to see and help with. Don’t trade the lack of short term pain for long term success
Temptation 2 – popularity over accountability
Have to hold people accountable or they won’t know how seriously to take you and you won’t be consistent
Temptation 3 – certainty over clarity
Have to set vision and expectations for yourself and entire team. Can’t hold people accountable if they don’t have clarity on their expectations
Clear and timely decisions are so important. Nearly any decision is better than no decision
Temptation 4 – harmony over conflict
Healthy dialogue and conflict is necessary to grow
Must benefit from all the ideas and feedback from your team
Temptation 5 – invulnerability over trust
What I got out of it
A fun, short read that highlights the importance of an achievement oriented mentality, accountability, clarity, healthy conflict, and trust
The “purple cow” concept is at the core of JB Hunt’s culture and way of thinking. Essential products and services that can’t be copied, unique,, doing things differently, earning above the cost of capital, an intense focus on solving the customer’s problems , embrace the more difficult business, do stuff that other people have trouble doing, be adaptable
Beware overcrowded spaces – have an intense desire to offer specialized and unique services that allow you to do what others wouldn’t or couldn’t
Differentiation, better customer service, a refusal to stand still, natural expansion with homegrown talent
Boring things – even if excellent – quickly become invisible
JB Hunt’s founder was impatient, wanted to maintain frantic growth at all costs, an idea man, was all over, didn’t want to let go
You learn a whole lot more from the struggles in the valley than you do on the mountaintop
Never feed problems while starving opportunities
Decision theory makes it clear that for a given set of costs and benefits, selecting alternatives with lower down-side risk, other things being equal, increases the expected payoff
We’ve never been concerned about cannibalizing one part of a company to offer a better solution to the customer. If there’s a better solution for the customer, we need to offer it. most companies won’t do that. We are not in business to support our trucking company. We are in business to support our customers with the best answer possible in that market
Must constantly adapt and iterate so that you never become stale and optimized for an environment that no longer exists. How you perceive a business segment can affect how you change the curve of the product life cycle
The customer is most certainly not always right. They are always to be respected, listened to, and served, but only when a return is generated
3 criteria needed to develop core competencies: provides potential access to a wide variety of markets; that it makes a significant contribution to the perceive customer benefits of the end product; and that it is difficult to imitate by competitors
Selling JBHT rather than just one segment results in more satisfied and loyal customers. Our bonus structure rewards leaders based on the company’s overall performance. When the company performs well as a whole, everyone reaps the rewards. Ironically, one of the things the original DCS leaders rebelled against was that bonus structure. There are legitimate arguments to do it other ways, but we find our approach fosters a one-for-all-and-all-for-one mentality. We incentivize the company’s success, not just the success of any one part of it. Sharing the wealth with those who helped create it has worked for JBHT for nearly 40 year.
We measure the quality of a team’s results against its peer groups, not against other JBHT units, so we put the emphasis on being “best in class” not “best within JBHT.” We’ve found this helps eliminate the popularity contests, lead to better decisions, and allows us to celebrate contributions that otherwise might get overlooked
Growth is key, growth is oxygen
A good message is clear, actionable, consistent. Give the what/why, not the how
What’s unique is that variables like time, growth and the influx of new people haven’t caused an erosion of our culture. Instead, they have added to it and strengthened it. We’ve been open to change, while staying true to our core; flexible enough to stretch with new ideas, but solid enough to maintain our identity. I credit this to the dynamic interplay between our culture and our leadership and management.
Intermodal – more than one mode of transportation to reach the final destination (ship to train to truck…)
Trucks first complemented and then competed with the railways
“partner with the enemy” became the right choice for railways and trucks as it gave the customer more options, increased efficiencies, grew the pie (win/win/win)
Developing Intermodal opened up new business lines that are now multi-billion dollar segments
Grassroots and top-down – go to local colleges and universities to recruit good students and home grow them. From the top-down, Hr goes to the company’s leaders and asks them for the names of 2-3 people they have in mind as their successor. Having a good understanding of the existing talent pool also allows us to know when we need to look outside the company, as was the case when we shifted our approach toward technology and engineering. Growing organically is really healthy and really great for your culture, but you do have to inject outside thinking strategically and purosefully from time to time.
What I got out of it
A great look inside the culture of a compounder who has grown steadily for decades now
Reed Hastings recounts Netflix’s origin story as well as some of the cultural aspects that have made them the dominant media company of the past decade
If you want to build a culture of freedom and responsibility, the first step is to increase your talent density (hire great people, pay them top dollar, cull the mediocre), increase candor, and then remove unnecessary policies and rules (vacation, expense reports, dress codes, treat people as if they were responsible adults with good judgment…)
Removing mediocre performers has a surprisingly large impact on the culture, output, and happiness of everyone who remains, boosting already high performers even higher
Give feedback often start with employees giving the leader ship feedback get rid of jerks understand that you’re trying to leave people feeling optimistic and positive not be down because of your brutal honesty
Netflix’s travel and expense policy can be summarized in five words: act in Netflix’s interest
You are replacing rules and policies with leadership great people and common sense. For example the unlimited vacation policy must be followed up by the manager talking about what makes sense for the team so that you don’t hurt the company or your colleagues don’t take vacation in certain times we can only have one person out from our team at any given time etc.
For freedom and responsibility to really work there has to be repercussions that are known. For example at Netflix if you’re caught abusing the travel and expense policy you’re immediately fired no one strike you’re just out
Speed in every facet of decision making has tremendous second order effects
Big salaries, not big bonuses, are beat for innovation since people’s minds aren’t preoccupied with their target KPI or whatever metric their bonus is reliant upon. Bonuses and incentives are great for more mechanical and routine work but not so great for the creative. Pay top of salary estimates
Shining sunlight on mistakes, especially made by leaders, builds trust, encouraged others to take risks, and enhances velocity. if you have proven you’re confident and effective admitting your mistakes builds trust and likability whereas ineffective people shining a light on their mistakes only further a Rhodes peoples trust him
Don’t seek to please your boss but seek to do what is best for the company
Only a CEO who is not busy can truly do their job. You need to decentralize decision making as much as possible which enhances peoples accountability and excitement at work and allows the CEO freedom to think and beat the company
Adequate performance receives a generous severance package
The keeper test is important to build talent density. If someone on your team just told you they were leaving for another company would you fight for them? If not probably best to give them a generous severance package
Only say things about people that you’d be comfortable saying to their face
Lead with context, not control
Netflix’s north star is to be a company that is adaptable and flexible. They almost always pay more if that means getting additional flexibility
Pyramid and the tree – most organizations are structured like a pyramid but if innovation and creativity are your competitive advantage the structure like a tree is more effective. The boss is like the roots that helps keep the organization grounded and he is at the bottom setting the context rather than at the time controlling everything
What I got out of it
Freedom + Responsibility + Talent Density; candor, trust, shining spotlight on mistakes, do what’s best for the company and not for your boss, adaptability/flexibility > plans
Writings taken from Bezos’ annual shareholders letters with a bit of organization and context
In fact, when we lower prices, we go against the math that we can do, which always says that the smart move is to raise prices. We have significant data related to price elasticity. With fair accuracy, we can predict that a price reduction of a certain % will result in an increase in units sold of a certain percentage…Our judgment is that relentlessly returning efficiency improvements and scale economies to customers in the form of lower prices creates a virtuous cycle that leads over the long term to a much larger dollar amount of free cash flow, and thereby to a much more valuable Amazon.com. We’ve made similar judgments around Free Super Saver Shipping and Amazon Prime, both of which are expensive in the short term and – we believe – important and valuable in the long term
Our pricing objective is to earn customer trust, not to optimize short-term profit dollars. We take it as an article of faith that pricing in this manner is the best way to grow our aggregate profit dollars over the long term. We may make less per item, but by consistently earning trust we will sell many more items. therefore, we offer low prices across our entire product range. For the same reason, we continue to invest in our free shipping programs, including Amazon Prime. Customers are well informed and smart, and they evaluate the total cost, including delivery charges, when making their purchasing decisions. In the last 12 months, customers worldwide have saved more than $800m by taking advantage of our free shipping offers
Invention comes in many forms and at many scales. The most radical and transformative of inventions are often those that empowerothersto unleashtheircreativity – to pursuetheirdreams
Our heavy investments in Prime, AWS, Kindle, digital media, and customer experience in general strike some as too generous, shareholder indifferent, or even at odd with being a for-profit company. “Amazon, as far as I can tell, is a charitable organization being run by elements of the investment community for the benefit of consumers,” writes one outside observer. But I don’t think so. To me, trying to dole out improvements in a just-in-time fashion would be too clever by half. It would be risky in a world as fast-moving as the one we all live in. More fundamentally, I think long-term thinking squares the circle. Proactively delighting customers earns trust, which earns more business from those customers, even in the new business arenas. Take a long-term view, and the interest of customers and shareholders align.
A dreamy business offering has at least 4 characteristics. Customers love it, it can grow to very large size, it has strong returns on capital, and it’s durable in time – with the potential to endure for decades. When you find one of these, don’t just swipe right, get married
I’m talking about customer obsession rather than competitor obsession, eagerness to invent and pioneer, willingness to fail, the patience to think long term, and the taking of professional pride in operational excellence. Through that lens, AWS and Amazon retail are very similar indeed
In business, every once in a while, when you step up to the plate, you can score one thousand runs. This long-tailed distribution of returns is why it’s important to be bold. Big winners pay for so many experiments
Many characterized as AWS as a bold – and unusual – bet when we started. “What does this have to do with selling books?” We could have stuck to the knitting. I’m glad we didn’t. Or did we? Maybe the knitting has as much to do with our approach as the arena. AWS is customer obsessed, inventive and experimental, long-term oriented, and cares deeply about operational excellence
Most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you’re probably being too slow. Plus, either way, you need to be good at quickly recognizing and correcting bad decisions. If you’re good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.
Recognize true misalignment issues early and escalate them immediately. Sometimes teams have different objectives and fundamentally different views. They are not aligned. no amount of discussion, no number of meetings will resolve that deep misalignment. Without escalation, the default dispute resolution mechanism for this scenario is exhaustion. Whoever has more stamina carries the decision. So, opt for “disagree and commit.”
…We show him this problem and he looks at it. He stares at it for a while and says, “Cosign.” I’m like, “What do you mean,” and Yosanta says, “That’s the answer.” And I’m like, “That’s the answer?” Yeah, let me show you.” He sits us down. He writes out 3 pages of detailed algebra. Everything crosses out, and the answer is cosign, and I say, “Listen, Yosanta, did you just do that in your head?” And he says, “No, that would be impossible. Three years ago I solved a very similar problem, and I was able to map this problem onto that problem, and then it was immediately obvious that the answer was cosign.” That was an important moment for me because it was the very moment when I realized I was never going to be a great theoretical physicist, and so I started doing some soul-searching. in most occupations, if you’re in the ninetieth percentile or above, you’re going to contribute. In theoretical physics, you’ve got to be like, one of the top fifty people in the world, or you’re really just not helping out much. It was very clear. I saw the writing on the wall and changed my major very quickly to electrical engineering and computer science.
The way you earn trust, the way you develop a reputation is by doing hard things well over and over. The reason, for example, that the US military, in all polls, has such high credibility and reputation is because, over and over again, decade after decade, it has done hard things well. It really is that simple. It’s also that complicated. It’s not easy to do hard things well, but that’s how you earn trust. And trust, of course, is an overloaded word. It means so many different things. It’s integrity, but it’s also competence. It’s doing what you said you were going to do – and delivering. And so we deliver billions of packages every year; we say we’re going to do that and then we actually do it. And it’s also taking controversial stances. People like it when you say, “NO, we’re not going to do it that way. I know you want us to do it that way, but we’re not going to.” And even if they disagree, they might say, “We kind of respect that, though. They know who they are.”
What I got out of it
Inspiring and motivating – a peek into an incredible thinker, his vision, his thought process
Frank Slootman talks about his time and leadership style
Being cash positive, we really didn’t need the money for operations, but a strong balance sheet reassures enterprise customers so they buy gear from a small supplier.
This fear-based behavior can scarcely be overstated. Large enterprises consistently prioritize their buying decisions to minimize the risk of embarrassment backlash. Huge premiums are paid in the misguided name of “playing it safe.” Dominant suppliers carefully cultivate and nurture this incumbent bias.
From the perspective of an operations guy, there is a lot of riff-raff in venture capital: posers, herd mentality, technology infatuation, too much education, not enough experience to appreciate what grit and focus it takes to grow a business out of nothing. To have a fighting chance, you want to be with the best firms, and the best partners in those firms. Odds are already exceedingly low for venture success.
In hindsight, it helped explain how some of our breakthroughs came about: they ended up betting on Moore’s law, the microprocessor subsystem, and avoiding the entrenched bottlenecks in the storage subsystem
The famed Austrian economist Joseph Schumpeter is usually associated with this term, but the basic idea goes back all the way to the works of Karl Marx. The notion (which has experienced a recent resurgence via Clayton Christensen’s writings on disruptive innovation) is that in order to create something, you have to destroy something else in the process. So, creative destruction is an axiom of business: you are not going to grow much without exacting a proportional decrease in business somewhere else. You better know whose livelihood you’re going to mess with.
A challenged product sector is obviously a much better starting point than attacking a category that is favorably regarded. When picking a fight, don’t seek out the most formidable opponent.
Many technologies are conceived without a clear, precise notion of the intended use. There is plenty of hoping and praying going on that some new technology will magically find a suitable problem to solve. Often, we think we know, vaguely, in the abstract—but the truth is we have no clarity on how our technology stacks up in that use-case, relative to alternatives. Start with the application or use case, not the technology. Don’t make it an after-thought. Ass-backwards, it is awfully hard to successfully recover from a technology-led venture that cannot locate its target.
It is remarkable how little our strategy changed from dollar zero to a billion in sales. The most important thing we did throughout the journey: resist the ever-present temptation to muck with the strategy.
Making yourself “scarce” is something to ponder.
You simply cannot invest intelligently in revenue generation if you do not understand how to ramp effectiveness and make the underlying economics work. It should be obvious that a sales force that loses money will only accelerate cash burn—in the absence of deep pockets, not a game to be played for very long.
If you have aspirations to go public, you cannot do so without a predictable model that you control. It is also a way to weaken competitors. At Data Domain we hired away the best of the best from our competitors—not only did we gather strength, we weakened them at the same time. Ulysses S. Grant once said that victory is breaking the enemy’s will to fight. Our version of victory was a great salesperson quitting the competition and joining our band of brothers. Breaking their will to fight (prompting “surrender”) was one thing, but getting them to defect outright and rally to our cause—this was crushing for incumbent morale.
Your power is in your own sales function and product—keep that in mind. The channel is a powerful, entrenched fixture in the industry, and one that demands respect. If you don’t bring the channel in, they will bring in your competition.
Yet, there comes a time when the venture must pivot from conserving resources to applying them rapidly, as fast as you know how to do effectively—when that cross-over time comes is not always obvious. The irony is that most ventures seem to spend too much early on, and not enough later on when they could grow faster and pay for it. The question becomes “can you grow faster?” And, if not, why not? That should be a good board meeting discussion. The turning point comes when your sales activity is solidly paying for itself, and is clearly becoming more profitable with increasing volume. Now you have a virtual money machine and you want to start opening the floodgates.
Accounting is the bastardization of economics. It can be puzzling to see early stage ventures focusing on P&L profitability, as that mentality can choke off growth in a hurry. You should not care much about profits early on. Instead, you care about maximizing growth while maintaining sufficient cash balances to sustain it.
I have seen startups managing for profitability prematurely—a huge mistake. They simply do not appreciate the dynamics of an early stage, high growth operation versus a large, steady-state company. Big company thinking: check it at the door.
Trust your team—nothing else scales.
After suffering through a few instances of this mismatch at Data Domain, we adjusted our search algorithm and began looking for candidates who did not have the resume yet but did have the potential and desire for a career break to get to the next level. We called them “athletes”: candidates with the right aptitude and behavior profile but without the prerequisite experience. Put differently, we started looking for people who we thought had their best work still in front of them, rather than behind them.
Speed is the essence of a startup: we have to be able to take mistakes in stride, and self-correct in the normal course of business.
Newly hired salespeople were stunned that they could pose a question online, and responses started piling up within minutes.
CEOs can’t manage from behind the desk—you need to be the first guy or gal over the barricades, gloves off. You need to know from experience what it’s like getting your nose bloodied; otherwise, your troops can’t relate to you and you can’t relate to them.
I staked out the Greater Boston Area and made more sales calls in the Northeast than anywhere else. Why? It was the home of our principal competitor at the time, EMC. We wanted to show our people we could beat them in their own backyard.
If you don’t naturally swarm to the action, you need to learn that attitude.
People can instantly finger a phony. Let them know who you really are, warts and all—show your humanity, your passions, your likes and dislikes. What do you feel strongly about? Can they still remember what you said a week later? Are you leaving a room with more energy than when you entered it? Not sure? Then you didn’t. For most of us, it is work to become an authentic leader. By authentic I mean being who you really are versus acting out some burnished version of you.
Software development actually suffers from diseconomies of scale: the more engineers, the slower it goes.
Don’t be a pleaser, and don’t be an appeaser. Do what you think is right. Do anything less, and you only have yourself to blame.
He had this style about him leaving no doubt that while he would share his point of view, he was not making recommendations or prescriptions: you, the CEO, were the judge. It actually made it easier to seek him out, as he didn’t demand you follow his point of view. He impressed on me that the role of the board was to hire and fire the CEO, and that he would not hesitate to pull either trigger!
I found this advice priceless. You might as well spend all your time on winning—nothing else matters. Of course, a good board wants you to do exactly that. It obviously doesn’t mean you should blindly bat away all opinions coming at you, but just try them on for size and merit, and go from there. Keeping good council is strength; caving in on perceived pressure is weakness.
Our drive for a set of values in the organization came about gradually, as more people came into the company. We started writing them down and describing them: Respect Excellence Customer Integrity Performance Execution The first letter of each of the six values spells the word R-E-C-I-P-E.
Becoming a value-led organization doesn’t happen automatically. We imported somebody else’s culture with every person we hired, and therefore had to undo a bunch of stuff. We called it “re-programming.” People learn culture based on what behavior they observe around them, good, bad, or somewhere in between. The magic begins when you start displaying what you mean by them in practice, when the consequences are real. One aspect of compliance was that we told new hires upfront that while we might be somewhat patient and forgiving on performance, we would not be on conduct. Conduct is a choice, not a skill set. If someone made the wrong choices in the face of all the guidance received, it could and would be a dismissible offense.
I’d go as far as to say that company culture is the only enduring, sustainable form of differentiation. These days, we don’t have a monopoly for very long on talent, technology, capital, or any other asset; the one thing that is unique to us is how we choose to come together as a group of people, day in and day out.
They don’t “work for you”—we all work for the company. As a manager, you are there to help them succeed.
Strong references (who voluntarily become your “promoters”) are priceless marketing collateral.
Early on, when employee candidates asked us what our culture was like, we invariably said “blue collar.” Not a lot of flash—if it doesn’t directly aid our cause, we don’t spend money on it. Extravagance was frowned upon, and becoming self-congratulatory was avoided; these things weaken the focus and muscle of the company. Setting the tone comes from the top. Humble and hungry is what we wanted to be.
Somebody once asked me how he or she would know whether they were a driver, and I answered, “you better find out before we do.” In other words, be more demanding of yourself. Are you increasing the company’s speed or not?
No strategy is better than its execution. When you get better at execution, the strategic issues will crystallize more as well. Like art being 99% perspiration (versus inspiration), business is 99% execution (versus strategy). A company can go a long way with an average strategy and superior execution, but they will not go far without great execution, no matter how brilliant the strategy.
Startup CEOs are more like plow horses than racehorses. A racehorse gets pampered all week, to be taken out of the barn for a few minutes to race on Saturday afternoon; startup CEOs live 12+ hours a day behind the plow. It doesn’t feel so glamorous when you get home at 11 at night and you need to get up at 5 am to catch a flight out of town.
What I got out of it
Love Slootman’s no non-sense mentality and learned a lot from his explanation of his time at Data Domain