Categories
Books

Beyond Entrepreneurship by Jim Collins

The Rabbit Hole is written by Blas Moros. To support, sign up for the newsletter, become a patron, and/or join The Latticework. Original Design by Thilo Konzok.

Key Takeaways

  1. You must start this when you’re small or the inertia will be too hard to overcome
  2. Great companies have sustainable cash flows, are admired and respected, have a huge impact on the industry, and have duration (100+ years)
  3. Leadership Style
    1. Sincere, a multiplier (others will copy), charisma does not equal leadership, develop your own style, relentlessly seeks the truth
    2. Effective corporate leadership consists of 2 parts: leadership function and leadership style. The function of leadership – the number-one responsibility of a leader – is to catalyze a clear and shared vision for the company and to secure commitment to and vigorous pursuit of that vision. This is a universal requirement, no matter your style (which is unique to the individual)
    3. Decisive – zero in on what truly matters, use your intuition, every decision better than no decision, adapt with new info, disagreement opens door to better decision making, push decisions as far down as possible, be clear about which type of decision process (group vs. autocratic)
    4. Focus –  1 priority at a time, manage your time and not your work, can force yourself to be better at this by working less (!)
    5. Personal Touch – touching the medium, build long-term win/win relationships with all stakeholders, handwritten notes, informal communication, be accessible, little hierarchy
    6. Hard/Soft people skills – leader as teacher/mentor/guide, high expectations + high support, positive feedback
    7. Communication – always keep vision top of mind, use images / analogies, speak with normal conversational words and be authentic, present bad news openly and transparently
    8. Ever Forward – energy, growth, hard work, optimistic, tenacity, never ‘enough’, never stop
  4. Vision
    1. Core values / beliefs – forms the basis of extraordinary human effort, context for strategic and tactical decisions, creates cohesion / teamwork / community, lays the groundwork for the company to evolve past a few key individuals
    2. Purpose – why you exist, 100 year north star
    3. Mission – bold, achievable, timeline
      1. Targeting, common enemy, role model, internal transformation
    4. Must be clear and shared
  5. Strategy
    1. Methodology to achieve the mission
      1. Strategy must descend directly from your vision
      2. Strategy must leverage the strengths and unique capabilities of your company – do what you’re good at
      3. Strategy must be realistic
        1. Strategy should be set with the participation of those who are going to be on the line when it happens
    2. 3-5years, 3-5 priorities, <3 pages
    3. Focus –
    4. Tactical Excellence + Innovation
  6. Innovation
    1. Creativity isn’t the problem, it’s how to nurture the creativity all around us and getting that acted upon and turned into innovations
    2. Be receptive to ideas from anywhere – trade shows, travel, expert talks
    3. “being” the customer – field test the products or services, solicit feedback
    4. Experimentation and mistakes
    5. People being creative – educational training, books, hire some creative misfits
    6. Autonomy and decentralization – shared vision is crucial, facilitate the transferring of knowledge between all people / units, have an open system, avoid matrix structures
    7. Rewards – must reward creative contribution, make heroes of the creative contributors, set measurable innovation goals, separate career track for creative contributors, compensate people, 20% time
  7. Tactics
    1. Hiring – values, reference docs
    2. Inculturating – starter kit, internal memos
    3. Training
    4. Goal-setting – specific
    5. Measuring – track performance, identify barriers, remove, repeat
    6. Appreciating – informal, awards / recognition, financial (dinners, spot bonuses)
  8. Company Dashboard
    1. Cash flow, both current and projected
    2. Financial accounting info
    3. Cost information
    4. Sales info
    5. Customer info

What I got out of it

  1. The first 100 pages or so are worth reading and re-reading for anybody interested in business, leadership, culture, quality
Categories
Books

On Quality: An Inquiry Into Excellence by Robert Pirsig

The Rabbit Hole is written by Blas Moros. To support, sign up for the newsletter, become a patron, and/or join The Latticework. Original Design by Thilo Konzok.

Key Takeaways

  1. Pirsig’s goals with his books was to raise people’s awareness of quality to its central place
  2. I want to emphasize that when that idea came, there was no preparation for it. It arrived out of my own circumstances, rather than out of a deliberate desire on my part to sit down and write. I wasn’t being separate from what I was doing; this was arising out of what I was doing.
  3. Write about what you know. If you do that well enough, it’ll be exotic enough for others
  4. In any creative project, you can’t imagine what the end is going to be, unless it is a very small thing you’re doing
  5. Normally one’s ability to see what is good marches far ahead of one’s ability to produce it
  6. The ultimate goal in the pursuit of excellence is enlightenment. After that there are no goals, for one realizes emotionally as well as intellectually that all experience is of equal quality
  7. Quality = in tune with reality
  8. Quality, selection, creates the world
  9. I used to give students the advice, “First you just ‘see’ what has quality, then you figure out why. Do’t reverse the process, or you will get all confused”…
  10. The difference between a good mechanic and a bad one, like the difference between a good mathematician and a bad one, is precisely this ability to select the good facts from the bad ones on the basis of quality. He has to care! This is an ability about which formal traditional scientific method has nothing to say
  11. Whatever we love has quality, whatever has quality we love. They always go together.
  12. You can ‘practice’ and find quality in all that you do
  13. Quality is at the center of existence, self-evident to all
  14. Dharma = Quality = Duty to self and a duty to quality
  15. Zen meditation is the best route to discovery Quality

What I got out of it

  1. A beautiful, inspiring book. Short snippets on Pirsig’s expanded thoughts on Quality and how his books and philosophy came to be
Categories
Books

The Toyota Production System: Beyond Large-Scale Production by Taiichi Ohno

The Rabbit Hole is written by Blas Moros. To support, sign up for the newsletter, become a patron, and/or join The Latticework. Original Design by Thilo Konzok.

Summary

  1. There is nothing very complex in the magic of Mr. Ohno’s teachings. In fact, it is often confusing listening to him because he talks so simply, often just saying to look for and eliminate waste. We cannot believe that it is that simple – but it is true. Just reduce the time line by removing any wastes…Manufacturing must be both efficient and also have respect for the person running the machine. The world owes a great deal to Mr. Ohno. He has shown us how to manufacture more efficiently, reduce costs, produce greater quality, and also take an important look at how we as people work in a factory

Key Takeaways

  1. Overview
    1. All we are doing is looking at the timeline, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that time line by removing the non-value-added wastes. Simple, but brilliant
    2. The basis of the TPS is the absolute elimination of waste. The two pillars to support the system are Just in Time and Autonomation, or automation with a human touch. The tool used to operate the system is kanban
  2. Just in Time
    1. JIT means that, in a flow process, the right parts needed in assembly reach the assembly line at the time they are needed and only in the amount needed. A company establishing this flow throughout can approach zero inventory. From the standpoint of production management, this is an ideal state. However, with a product made of thousands of parts, like the automobile, the number of processes involved is enormous. Obviously, it is extremely difficult to apply JIT to the production plan of every process in an orderly way. 
    2. JIT is much more than an inventory reduction system. It is much more than reducing changeover times. It is much more than using kanban or jidoka. It is much more than modernizing the factory. It is, in a sense, making a factory operate for the company just like the human body operates for an individual. The autonomic nervous system responds even when we are asleep. The human body functions in good health when it is properly cared for, fed and watered correctly, exercised frequently, and treated with respect. It is only when a problem arises that we become conscious of our bodies. Then we respond by making corrections. The same thing happens in a factory. We should have a system in a factor that automatically responds when problems occur
    3. Kanban = sign board to communicate what and how much is needed
      1. Pickup information, transfer information, production information 
      2. The first rule of kanban is that later processes goes to the earlier process to pickup products
      3. Constant flow and leveling production, in according with standard work methods, is necessary for kanban to work well
  3. Autonomation
    1. Autonomation changes the meaning of management as well. An operator is not needed while the machine is working normally. Only when the machine stops because of an abnormal situation does it get human attention. As a result, one worker can attend several machines, making it possible to reduce the number of operators and increase production efficiency…Stopping the machine when there is trouble forces awareness on everyone. When the problem is clearly understood, improvement is possible. Expanding this thought, we establish a rule that even in a manually operated production line, the workers themselves should push the stop button to halt production if any abnormality appears – one operator, many machines in different processes
  4. Push and Pull
    1. In the pull method, the final process withdraws the required quantities from the preceding process at a certain time, and this procedure is repeated in reverse order up through all the earlier processes. Each method has merits and shortcomings. Choosing one or the other and applying it effectively depends on the philosophy and practical creativity of managers and supervisors 
  5. Other
    1. He would not allow anything to be recorded about his system for some time, for fear that it would crystallize it
      1. Organic, always evolving and iterating
    2. Asking “why?” five times helps get to the root of the problem
      1. 5 why’s
    3. Present capacity = work + waste
      1. Waste of overproduction, waiting, transportation, processing itself, inventory, movement, defective products
    4. The plant is the manufacturing’s source of major information. It provides the most direct, current, and stimulating information about management. A proper work procedure therefore cannot be written from a desk. It must be tried and revised many times in the production plant. 
      1. Touching the medium
    5. The standard work sheet includes cycle time (operating hours / quantity required per day), work sequence, and standard inventory
    6. In business, excess information must be suppressed. Toyota suppresses it by letting the products being produced carry the information 
    7. Understanding is my favorite word. I believe it has a specific meaning – to approach an objective positively and comprehend its nature
    8. Manpower reduction means raising the ratio of value-added work. The ideal is to have 100% value-added work. This has been my greatest concern while developing the TPS – eliminate overproduction and establish control measures
    9. Speed is meaningless without continuity – duration is the name of the game
    10. Management should not be done by arithmetic, but by ninjutsu, the art of invisibility
    11. I have said before that I calmly accept the words “slow growth.”
    12. People called the auto venture reckless. We were warned how difficult it was to operate an automobile business. However, we had known this for several years and had worked hard to prepare ourselves…So, for three years we managed the business under the guise of a hobby. – Toyoda Kiichiro 
      1. Toys & Hobbies
    13. Rapid changeovers are a necessity for the TPS. Teaching workers to reduce lot sizes and setup times took repeated on the job training
    14. Standard should not be forced down from above, but rather set by production workers themselves
    15. I have always tried to view things upside down. Reading ford, I was encouraged by the way he repeatedly came up with brilliant inverse conceptions
      1. Inversion 
    16. He would not read catalogues or books. He would not borrow from newspapers or magazines. He never asked for information or borrowed from others to help in an invention. He never studied mathematics or physics. His thinking and inventing were accomplished completely by himself. No mathematics teacher or mechanical expert could find fault with his inventions. His logic fit all scientific principles. Because his inventions sprang directly from actual practice, they did not always follow scientific principles. In application, however, his inventions produced better results. He put his ideas into actions, not words. He didn’t use consultants or assistants. He was independent and alone. He did not have a special research lab or any reference materials at his side. The living room in his home was his laboratory and office. He had no visitors and he wouldn’t call on anyone. From morning till night, he would sit in the room, looking up at the ceiling and down at the surface of the mattress, pondering things quietly. In this way, he generated over 100 patents. – On Toyoda Sakichi

What I got out of it

  1. Simple, but not easy. Some great frameworks to think through how and why a production process should be set up. systems thinking in action…
Categories
Books

Quality Investing by Lawrence Cunningham

The Rabbit Hole is written by Blas Moros. To support, sign up for the newsletter, become a patron, and/or join The Latticework. Original Design by Thilo Konzok.

Summary

  1. In our view, 3 characteristics indicate quality. These are strong, predictable cash generation; sustainably high returns on capital; and attractive growth opportunities. Each of these financial traits is attractive in its own right, but combined, they are particularly powerful, enabling a virtuous circle of cash generation, which can be reinvested at high rates of return, begetting more cash, which can be reinvested again.

Key Takeaways

  1. One of our favorite explanations of quality appears in Zen and the Art of Motorcycle Maintenance, in which Phaedrus tells his student “…even though Quality cannot be defined, you know Quality is!”
  2. The value any business creates, listed or not, is determined by the rate at which it deploys incremental capital
  3. The very best companies enjoy a diversified set of growth drivers through ingenuity in the design of products, pricing, and product mix
  4. Security by obscurity – an obscure industry, even one with appealing economic characteristics, tends to face lower disruption risk, making attractive industry structures more durable
  5. Assurance benefits are often based on reputation. A reputation of high quality or reliability is earned over time. To compete with reputation is almost impossible, no matter how much money is staked on it
  6. Some key characteristics or industries of quality companies
    1. Recurring revenue
    2. Friendly middlemen
    3. Toll roads
    4. Low-price plus
    5. Pricing Power
    6. Brand strength
    7. Innovation dominance
    8. Forward integrators
    9. Market share gainers
    10. Global capabilities and leadership
    11. Corporate culture

What I got out of it

  1. A good look at a dozen or so companies and how they can be defined as “quality”
Categories
Books

Out of the Crisis by Edwards Deming

The Rabbit Hole is written by Blas Moros. To support, sign up for the newsletter, become a patron, and/or join The Latticework. Original Design by Thilo Konzok.

Categories
Books

Lila: An Inquiry Into Morals by Robert Pirsig

The Rabbit Hole is written by Blas Moros. To support, sign up for the newsletter, become a patron, and/or join The Latticework. Original Design by Thilo Konzok.

Summary

  1. Phaedrus, from The Art of Motorcycle Maintenance, returns and ponders life’s essential elements as he sails down the Hudson River.
Key Takeaways
  1. Quality is Morality. Quality is Value. They are the same thing. Quality doesn’t have to be defined. You understand it without definition, ahead of definition. Quality is a direct experience independent of and prior to intellectual abstractions. Quality is indivisible, undefinable and unknowable
  2. A thing does not create value, value creates a thing. Therefore, if something has no value it cannot exist 
  3. In Zen, Phaedrus divides between classic and romantic but here the first, and most important, division is into static and dynamic quality 
  4. Dynamic Quality – pre-intellectual cutting edge of reality, source of all things, completely simple and always new. It always comes as a surprise and the first time you are made aware of it, it weakens your static patterns so that all dynamic qualities around you shine through. You become obsessed with something, but normally only a little while because soon it turns static again (favorite song loses its appeal quickly)
  5. Static Quality – what we expect and is necessary to everyday life as it gives structure but when it becomes exclusive of dynamic, they are poor quality
    1. Both static and dynamic quality are necessary for life
  6. Beauty isn’t things trying to look like something else. Beauty is things just being what they are
  7. Nothing has quality as quality can’t be possessed. Quality dominates everything
  8. All life is a migration from static patterns of quality to dynamic quality
  9. Without static quality an organism cannot last. Without dynamic, it cannot grow 
  10. Everything in the world is an ethical activity, not just man’s actions. This binds science and ethics and caused Phaedrus incredible joy 
  11. Whatever is more dynamic, or at a higher level of evolution, is more moral 
  12. Morality hierarchy: dynamic — intellectual — social — biological — inanimate 
  13. “This Cartesian “me,” this autonomous little homunculus who sits behind our eyeballs looking through them in order to pass judgment on the affairs of the world, is just completely ridiculous. This self-appointed little editor of reality is just an impossible fiction that collapses the moment on examines it”
  14. Morality is that which enhances evolution 
  15. Trying to understand a member of another culture is impossible without taking into account differences in their values 
  16. MOQ resolves relationship between intellect and society, subject and object, mind and matter – objects are inorganic and biological, subjects are social and intellectual. they are parallel but not the same and can therefore exist without contradicting each other 
  17. Goes pretty in depth about insanity, his time in an insane asylum and how to resolve it (as he doesn’t believe in “curing” insanity). If there is only one person in the world, could he be insane? Insanity is always relative to others
    1. Sanity is not truth. Sanity is conformity to what is socially expected
  18. When a new fact comes to fruition that does not fit our patterns, we don’t throw out the pattern, we throw out the fact
  19. The only exit from suffering is to detach yourself from static patterns, to “kill” them
  20. Goes full circle and starts thinking about Native Americans again. Native Americans do not think in hierarchy (what type of good) but in quality (a good dog). When Native Americans say it they mean that good is the whole center of experience and that Dusenberry (a good man), was an incarnation of this center of life
    1. Primitive cultures only discuss about actual experiences. They don’t discuss virtue, good, evil, etc. They don’t talk about abstract ideas.
    2. Good is a noun. That was it. That was what Phaedrus had been looking for. Good as a noun rather than as an adjective is all MOQ is about. Take care of your goodness. If you had to reduce the whole MOQ to a single sentence, that would be it.
What I got out of it
  1. In my mind it doesn’t quite live up to Zen but it is an incredible book. It takes some interesting turns where some parts are so intellectual, especially Phaedrus’ inner dialogue, and the rest is almost stream of consciousness and superficial. Shows the divide or dichotomy in Phaedrus and all of us
Great interview with Robert Pirsig
More in-depth analysis of Lila