Leadership Reading

How Ritz-Carlton Goes the Extra Mile // Book Summary of ‘The New Gold Standard’

April 13, 2020 By Nagesh Belludi 1 Comment

Psychologist Joseph Michelli’s The New Gold Standard (2008) describes how luxury hotel chain Ritz-Carlton has programmed its organization to foster customer-centric behavior in employees at all levels.

Ritz-Carlton’s clearly-defined and well-implemented cultural principles, called “Gold Standards,” enable the company’s employees to deliver the exceptional service that its refined customers have come to expect. Ritz-Carlton’s brand recognition is so deep-rooted that such phrases as “ritzy” and “putting on the ritz” have become part of the lexicon.

Values First

Ritz-Carlton propagates its customer-centricity goals by making a compact trifold “Credo Card” part of each employee’s uniform. These cards describe the “ultimate guest experience,” and they are shared with guests eagerly. Michelli writes, “Ultimately the value of the Credo or any other core cultural roadmap is the opportunity it affords those inside the business to realize how the ideal customer and staff experience looks and feels.”

Service Principle #10 of Gold Standards states, “When a guest has a problem or needs something special, you should break away from your regular duties to address and resolve the issue.” Irrespective of rank and title, every employee can spend as much as $2,000 per day per guest without a supervisor’s approval to solve a guest’s problem. This distinctive policy not only permits the employees to fulfill their guests’spoken and implied needs but also empowers employees to use their best judgment to create memorable and personal experiences for guests.

While some might think that this type of empowerment is both ill advised and financially irresponsible, leadership at Ritz-Carlton has determined the trust they place in employees is well founded. Rather than being extravagant with the resources entrusted to them, the employees tend to be very cautious … the advantage of the $2,000 staff empowerment is that the employees don’t have to delay a service response by taking it up to the next level in the organization, and they can take the initiative to enhance guest experiences.

Empowerment through Trust

Guided by co-founder Horst Schulze’s oft-cited business principle, “Ladies and gentlemen serving ladies and gentlemen,” Ritz-Carlton selects, trains, and cultivates a dedicated workforce of outstanding professionals who are just as deserving of respect as Ritz-Carlton’s upscale guests.

Ritz-Carlton’s customer-centric principles and culture inform its hiring and training processes and preside over the rewards and promotion systems. Managers use every opportunity to go over the company’s values and remind everybody to polish up on caring for guests. For example, at the start of each shift, everyone—from laundry staff to executives—participates in a 15-minute “lineup” to talk about the nitty-gritty of the Gold Standards.

Michelli observes, “When it comes to the Gold Standards, Ritz-Carlton leaders and frontline staff alike can appear, from an outsider’s perspective, to be teetering toward the fanatical.” No wonder, then, that Ritz-Carlton has become a paradigm for the highest level of sustainable customer experience. In the year 2000, the company launched the Ritz-Carlton Leadership Center to offer courses and to consult for anyone interested in its cult of customer service. In 2001, when Steve Jobs and Ron Johnson were preparing to launch Apple Stores, they sent executives to Ritz-Carlton’s leadership program to learn about offering the best customer experience. Apple’s notion of anticipatory customer service and the concept of Genius Bars originated from Ritz-Carlton.

Delivering Wow!

During the “lineup” meetings, Ritz-Carlton managers and leaders also reinforce the customer-service principles by sharing “Wow!” stories of delighting guests. The internal communication department collects such stories each week and publishes them in the in-house newsletters. “Positive storytelling. The ability to capture, share, and inspire through tangible examples of what it means to live the Credo and core corporate values.”

The New Gold Standard includes many anecdotes from hotel guests, employees, managers, and executives to explain how Ritz-Carlton has “going above and beyond the call of duty” embodied in its culture.

A breakfast waiter scurried to a neighborhood grocery store to buy a guest’s preferred grape jelly when the dining room did not have it on hand.
At the Ritz-Carlton Dubai, a manager and a staff carpenter built a temporary access ramp made of wood boards to allow a guest and his wheelchair-bound wife to access the sandy beach, dine by the ocean, and watch the sun go down.
When a guest called the Ritz-Carlton Naples to notify that she had run out of gas, a doorman filled up a few five-gallon gasoline containers and drove 40 miles to help out the stranded woman and her children.
During Hurricane Katrina, employees of the Ritz-Carlton New Orleans pushed laundry carts loaded with luggage and guests through flooded streets to get them to safe locations.

Lest the reader dismisses these as cherry-picked examples of “overdoing it” in Michelli’s laudatory narrative, these cases in point are demonstrative of the Ritz-Carlton DNA. The employees feel thoroughly invested in and trusted by their employers. And Ritz-Carlton recognizes that customer loyalty is dependent upon the frontline employees who administer such sophisticated service daily.

Idea for Impact: Foster a foundation of customer-centricity

Speed-read Joseph Michelli’s The New Gold Standard. It offers ample insights into establishing your own gold standards for achieving excellence in customer service.

Create a customer-centric culture that identifies, nurtures, and reinforces service-excellence as a primary guiding principle. “Leadership often involves fostering the environment in which everyday creativity emerges in response to the needs of specific customer groups.”
Foster a culture where employees take up personal accountability for resolving customers’ problems.
Train employees to anticipate and fulfill the unmet—even unstated—needs of customers.
Reiterate that providing a ‘wow!’ experience should be each employee’s goal during every interaction with a customer.

Books I Read in 2019 & Recommend

December 26, 2019 By Nagesh Belludi Leave a Comment

Management: Bob Fifer’s How to Double Your Profits in 6 Months or Less (1995) obsesses about cutting costs by any and all means possible. Every corporate resource is a cost-center that must be pared down to the bone—unless it brings in business or improves the bottom line. This obscure book has instigated systematic cost-consciousness in many large firms that have bloated cost structures in today’s hypercompetitive business environment. [Read my summary.]
Leadership: Microsoft CEO Satya Nadella’s Hit Refresh (2017) recounts his remarkable empathy-centric revamp of the culture of a company that had become set in its ways. Nadella is an exemplar of a leader as a sense-maker. His narrative arc shifts from a personal memoir to a management how-to, and then to technological futurism. [Read my summary.]
Self-Help: Greg McKeown’s Essentialism: The Disciplined Pursuit of Less (2014) is an excellent reminder of the wisdom to think through—and act upon—what really matters. “A rich, meaningful life entails the elimination of the non-essential.” A simple life is a good life. [Read my summary.]
Self-Help: Robert Maurer’s One Small Step Can Change Your Life: The Kaizen Way (2004) conceives transformative change as a cumulative, gradual process of small improvements. One small step leads to the next, which leads to one more, and so on. “Small Kaizen actions disarm the brain’s fear response … and satisfy your brain’s need to do something and soothe its distress.” [Read my summary.]
Leadership: Singapore Founding Father Lee Kuan Yew’s memoirs are The Singapore Story (1998,) From Third World to First (2000,) and One Man’s View of the World (2013.) Lee is one of the most competent leaders the world has ever seen. He was an autocratic pragmatist—a strong-willed, visionary leader who got it done. While considering Lee’s legacy, one needs to acknowledge his incredible achievements while refusing to close one’s eyes to certain lapses. He once remarked, “We decide what is right. Never mind what the people think.” [Read about the key lessons that Lee had to teach.]
Science History: Richard L. Hills’s Power from Steam: A History of the Stationary Steam Engine (1989) traces the arc of development of the technique to harness the properties of steam. Steam-powered mechanical devices became the driving force of the Industrial Revolution and led to innovations that became the bedrock of modern civilization. [Read this case study about insights into creativity.]
Management: Julie Zhuo’s Making of a Manager: What to Do When Everyone Looks to You (2019) chronicles her experiences from ramping-up into management and getting to know herself better. This excellent primer for novice managers offers many hard-earned insights that only time in the trenches can reveal. “Being a manager is a highly personal journey, and if you don’t have a good handle on yourself, you won’t have a good handle on how to best support your team.” [Read my summary.]
Aviation History: Jon Ziomek’s Collision on Tenerife (2018) analyzes the world’s worst aviation disaster caused by small errors that became linked up and amplified into a big tragedy. He provides a comprehensive picture of the importance of protocols and expounds on how some humans can freeze in shock while others spring into action. [Read my summary.]

See, also, my book recommendations from 2018, 2017, 2016, 2015, and 2014.

The four books I re-read every year are Benjamin Graham’s Security Analysis and The Intelligent Investor, Phil Fisher’s Common Stocks and Uncommon Profits, and Dale Carnegie’s How to Win Friends and Influence People.

You may be interested in my article on how to process that pile of books you can’t seem to finish and my article on why we read self-help books.

I wish you all very enlightening reads in 2020! Recall the words of the American philosopher Mortimer J. Adler, who said, “In the case of good books, the point is not to see how many of them you can get through, but rather how many can get through to you.”

Microsoft’s Resurgence Story // Book Summary of CEO Satya Nadella’s ‘Hit Refresh’

July 10, 2019 By Nagesh Belludi 1 Comment

Leader as Sense-Maker and Cultural Curator

Microsoft CEO Satya Nadella is an exemplar of a leader as sense-maker. He has revitalized how Microsoft’s strategy, mission, and culture connect people, products, and services—inside and outside his company.

Nadella has a success story to tell, and his Hit Refresh: The Quest to Rediscover Microsoft’s Soul and Imagine a Better Future for Everyone (2017, with two co-authors) highlights how he is a different kind of leader transforming Microsoft into a different kind of company.

Hit Refresh‘s broad objective is to lay out a vision for the future of the company. The book is aimed at people who work at or with Microsoft. Many employees were given a special imprint of book with Nadella’s faux-handwritten annotations in the margins and highlighted snippets.

The book’s narrative arc shifts from a personal memoir to a management how-to, and then to technological futurism. The latter—and perhaps the least interesting—portion features Nadella’s forethoughts on artificial intelligence, augmented reality, and quantum computing, as well as their socio-economic implications.

Satya Nadella Shook Things Up by De-Ballmering Microsoft

Nadella took Microsoft’s reins in February 2014 after long-time CEO Steve Ballmer resigned in August 2013. Under Nadella’s watch, Microsoft quickly became more open and more nimble as an organization. Its cloud computing, Office 365, and gaming platform franchises are all running remarkably well.

Microsoft pivoted its business model around subscription products that produce recurrent revenue. It acquired Mojang (creator of the popular Minecraft videogame title,) LinkedIn, and GitHub. It ditched Nokia and embraced open source software—it’s even including a Linux kernel in a future Windows release.

Today one of my top priorities is to make sure that our billion customers, no matter which phone or platform they choose to use, have their needs met so that we continue to grow. To do that, sometimes we have to bury the hatchet with old rivals, pursue surprising new partnerships, and revive longstanding relationships. Over the years we’ve developed the maturity to become more obsessed with customer needs, thereby learning to coexist and compete.

A Renewed Sense of Purpose: The Leader’s Tone Steers the Organizational Culture

Hit Refresh‘s foremost take-away is how the tone at the top sets an organization’s guiding values. Properly contemplated, propagated, and nurtured, Nadella’s approach became the foundation upon which the culture of Microsoft has been remade.

With “the C in CEO is for curator of culture,” Nadella’s dominant mission has been to recreate Microsoft’s underlying beliefs, values, and expectations in the eyes of its employees, business partners, customers, investors, and the society. This culture is to be consistent within Microsoft and characterize all the discernable patterns of behavior across the organization.

When I was named Microsoft’s third CEO in February 2014, I told employees that renewing our company’s culture would be my highest priority. I told them I was committed to ruthlessly removing barriers to innovation so we could get back to what we all joined the company to do—to make a difference in the world.

Nadella’s playbook has consisted of challenging complacency, instituting a “growth mindset,” being open-minded enough to welcome new technology and collaborate with Microsoft’s traditional competitors (“frenemies,”) and shifting from a “know it all” to a “learn it all” mindset.

I had essentially asked employees to identify their innermost passions and to connect them in some way to our new mission and culture. In so doing, we would transform our company and change the world.

“Driven by a Sense of Empathy and a Desire to Empower Others”

Core to Nadella’s framework is his conviction that individuals are wired to have empathy. “The alchemy of purpose, innovation, and empathy” is indispensible “not only for creating harmony within organizations but also for creating products that resonate.”

Nadella describes how caring for a special-needs child and his wife Anu’s sacrifices for the family made him become conscious of the significance of empathy. Specifically, Anu helped him recast these setbacks as opportunities to expand his worldview.

Being a husband and a father has taken me on an emotional journey. It has helped me develop a deeper understanding of people of all abilities and of what love and human ingenuity can accomplish. … It’s just that life’s experience has helped me build a growing sense of empathy for an ever-widening circle of people. … My passion is to put empathy at the center of everything I pursue—from the products we launch, to the new markets we enter, to the employees, customers, and partners we work with.

The most interesting section of Hit Refresh is Nadella’s personal journey growing up in India, migrating to America, and working his way up the career ladder at Microsoft. The only child of a Sanskrit scholar and a civil servant, Nadella was hooked on cricket (it taught him how to compete vigorously, the virtue of working in teams, and the importance of leadership direction.)

Recommendation: Satya Nadella’s Hit Refresh is a satisfactory first take on his remarkable revamp of the culture of a company that had become set in its ways. Microsoft’s transformation has been nothing short of dramatic—there’s a lot more to be done and written about.

Transformational Leadership Lessons from Lee Kuan Yew, Singapore’s Founding Father

June 24, 2019 By Nagesh Belludi 3 Comments

Almost all leaders take office with an ambitious vision for their country or their organization, but only a few ever succeed in transforming that vision into reality. Lee Kuan Yew (1923–2015,) the architect of modern Singapore, was one of them.

Leadership Lessons from Lee Kuan Yew, Singapore's Founding Father

Lee was one of the most competent leaders the world has ever seen. An incorruptible Cambridge-educated lawyer, he was an autocratic pragmatist—a strong-willed, visionary leader who “got it done.” Under his leadership, Singapore metamorphosed itself from a tropical backwater with few natural resources to a first-world metropolis in just one generation. Today, Singapore’s per-capita GDP in terms of Purchasing Power Parity is the third highest in the world.

There is also a darker side to the Singapore story, however. The island-nation’s prosperity came at the cost of a rather authoritarian style of government that sometimes infringed on civil liberties. In a 1986 National Day Rally, Lee defended,

I am often accused of interfering in the private lives of citizens. Yes, if I did not, had I not done that, we wouldn’t be here today. And I say without the slightest remorse, that we wouldn’t be here, we would not have made economic progress, if we had not intervened on very personal matters—who your neighbour is, how you live, the noise you make, how you spit, or what language you use. We decide what is right. Never mind what the people think.

Singapore is not quite a dictatorship, but neither is it a full democracy. Its political system is skewed to let Lee’s party dominate the country’s polity. In an interview with CNN’s Fareed Zakaria, Lee asserted, “It is not the business of the government to enable the opposition party to overturn us.”

A vast majority of Singaporeans today will overlook these civil-liberty concerns in the context of the country’s socio-political stability, public security, world-leading and affordable healthcare, free education, good housing for all, and high employment.

Singapore’s spectacular success is accepted as evidence, sometimes lamentably as justification, as with Rwanda’s Paul Kagame, that a vibrant economy and sustained prosperity could blossom only under a totalitarian government. Singapore’s achievement is not likely replicable in its entirety elsewhere.

Over the last several months, I’ve read a few biographies and evaluations of Lee and his political leadership, including the memoirs The Singapore Story: From Third World to First (1998) and One Man’s View of the World (2013.) Here are a few key leadership lessons that Lee had to teach.

Vision, structure, and determination are paramount to efficacious leadership. Lee was a brilliant, clear-eyed, far-sighted statesman. Singapore’s political stability, rapid economic growth, and its raising affluence between 1959 and 1990 were not accidental, but the result of his dynamic leadership and disciplined social engineering. In The Singapore Story (1998,) he writes, “The task of the leaders must be to provide or create for them a strong framework within which they can learn, work hard, be productive and be rewarded accordingly. And this is not easy to achieve.”

Leadership entails tough, unpopular decisions. Lee was not afraid of being out of favor. “I have never been overconcerned or obsessed with opinion polls or popularity polls. I think a leader who is, is a weak leader. If you are concerned with whether your rating will go up or down, then you are not a leader. You are just catching the wind … you will go where the wind is blowing. And that’s not what I am in this for.” He famously forbade the sale of chewing gum to keep Singapore’s streets clean. He maintained capital punishment and caning. Singapore’s vandalism rules drew worldwide attention in 1994 when American teenager Michael Fay was caned for damaging cars and public property, in spite of appeals for clemency from the US media and government, including then-President Bill Clinton.

The litmus test of great leadership is results that matter. Many take issue with Lee’s methods, but few dispute the results he achieved. He was a pragmatist with devotion to no particular ideology. He once contemplated, “I was never a prisoner of any [socio-political] theory. What guided me were reason and reality. The acid test I applied to every theory or scheme was: Would it work?” and “The acid test is in performance, not promises.”

Nurture a meritocracy. Lee’s commitment to meritocracy is a hallmark of Singapore’s national identity—social mobility is rooted in hard work and contribution regardless of ethnic differences. He devoted resources to cultivate an excellent education and health system, and developed a high-quality teacher workforce—all to maximize people’s potential. According to Lee Kuan Yew: The Man and His Ideas (1998,) he wrote, “It is possible to create a society in which everybody is given not equal rewards, but equal opportunities, and where rewards vary not in accordance with the ownership of property, but with the worth of a person’s contribution to that society. In other words, society should make it worth people’s while to give their best to the country. This is the way to progress.” In recent years, though, the debate over rising social inequality has led to some reproach of Singapore’s meritocracy.

Attract and retain superior talent; pay them well. A key contributor to the wealth, stability, efficiency, and cleanliness of Singapore is its civil service—it’s one of the most proficient and least corrupt bureaucracies in the world. The government’s transparent policies have been a powerful enticement for people, businesses, and investments. Singapore has some of the highest paid civil servants in the world. The country is not content to let its top graduates all go straight to the private sector, so it pays what it takes to get them. Prime Minister Goh Chok Tong, Lee’s immediate successor, told Singapore’s parliament on 3-Dec-1993, “If we do not pay ministers adequately, we will get inadequate ministers. If you pay peanuts, you will get monkeys for your ministers. The people will suffer, not the monkeys.”

One’s accomplishments become one’s legacy. Having a broad picture of the effect you want to have on the world will help you pinpoint the actions necessary to achieve it. Explaining his legacy, Lee wrote in Hard Truths to Keep Singapore Going (2011,) “I have spent my life, so much of it, building up this country. There’s nothing more that I need to do. At the end of the day, what have I got? A successful Singapore. What have I given up? My life.”

To judge leaders by their methods alone is to underrate their successes. While considering Lee’s legacy, one needs to acknowledge his achievements while refusing to close one’s eyes to certain lapses. Lee’s many critics considered him authoritarian—he imposed media restrictions and used detention without trial and defamation suits to quash critics of his government. Discussing a political opponent in Lee Kuan Yew: The Man and His Ideas (1998,) Lee justified, “If you are a troublemaker, it’s our job to politically destroy you. … Everybody knows that in my bag I have a hatchet, and a very sharp one. You take me on, I take my hatchet, we meet in the cul-de-sac. That’s the way I had to survive in the past.” Lee was unapologetic about his heavy-handed style of governing, seeing it as necessitous to get Singapore to where it got.

Books I Read in 2018 & Recommend

December 31, 2018 By Nagesh Belludi Leave a Comment

Self-Help: David Gelles’s Mindful Work: How Meditation is Changing Business from the Inside Out (2015) provides a remarkable account of the ever-increasing adoption of meditation-based mindfulness. It can promote stress-reduction and produce improvements in one’s overall emotional state and outlook on life. [Read my summary.]
Psychology & Self-Help: Daniel Pink’s When: The Scientific Secrets of Perfect Timing (2018) explores chronobiology—how the quality of the decisions we make are correlated with their timing. Our biological clocks influence our cognitive abilities, moods, and attentiveness. [Read my summary.]
Business & Finance: Based on a popular Harvard Business School class on “acquisition entrepreneurship,” Richard Ruback and Royce Yudkoff’s HBR Guide to Buying a Small Business (2017) is excellent manual for prospective entrepreneurs, employees of small businesses, financiers, and value-seeking investors. [Read my summary.]
Psychology & Economics: Cornell economist Robert Frank’s Luxury Fever: Why Money Fails to Satisfy in an Era of Excess (1999) argues that the extravagant consumption of the most affluent in our society has a ripple effect on everyone’s spending. The desire for many to indulge in luxury “possessions” is motivated less by the gratification they may bring than by what others are buying or want to buy. [Read my summary.]
Psychology & Self-Help: Richard Carlson’s bestselling Don’t Sweat The Small Stuff … And It’s All Small Stuff (1997) reminds that there’s always a vantage point from which even the biggest stressor can be effectively dealt with. To deal with angst or anger, what we need is not some upbeat self-help prescriptions for changing ourselves, but simply a measure of perspective. [Read my summary.]
Leadership: John Carreyrou’s Bad Blood: Secrets and Lies in a Silicon Valley Startup (2018) is a remarkable expose on Theranos, the former high-flying Silicon Valley tech startup founded by Elizabeth Holmes. How could the many smart people who funded, endorsed, defended, and wrote about this company never set aside their confidence in Holmes’s persuasions and looked beyond her claim of “30 tests from one drop of blood.” [Read my summary.]
Books & Reading: If you’re interested in sharpening up your ability to read, comprehend, and debate, Mortimer Adler and Charles Van Doren’s bestselling How to Read a Book: The Classic Guide to Intelligent Reading (1972) is a goldmine of invaluable insights into the art of reading and debate. [Read my summary.]

See my book recommendations from 2017, 2016, 2015, and 2014.

The four books I re-read every year are Benjamin Graham’s Security Analysis and The Intelligent Investor, Phil Fisher’s Common Stocks and Uncommon Profits, and Dale Carnegie’s How to Win Friends and Influence People.

You may be interested in my article on how to process that pile of books you can’t seem to finish and my article on why we read self-help books.

Wish you all very enlightening reads in 2019! Recall the words of the American philosopher Mortimer J. Adler, who said, “In the case of good books, the point is not to see how many of them you can get through, but rather how many can get through to you.”

A Guide to Intelligent Reading // Book Summary of Mortimer Adler’s ‘How to Read a Book’

October 29, 2018 By Nagesh Belludi Leave a Comment

If you’re interested in sharpening up your ability to read, comprehend, and debate, Mortimer Adler and Charles Van Doren’s bestselling How to Read a Book: The Classic Guide to Intelligent Reading (1972; first published in 1940 under only Adler’s name) is the definitive guidebook.

The book stemmed from Adler’s belief that students of liberal education needed to be grounded in the “great ideas” of humankind, as represented in the canon of Western classic literature. To Adler, the art of reading well is deeply correlated to the art of thinking clearly, critically, and freely.

After the publication of How to Read a Book (1940,) Adler advanced his ideas on educational theory further by starting the Great Books of the Western World program and the Great Books Foundation. His later successes as a University of Chicago philosopher and an educator had an colossal influence on American education in the twentieth century.

Take-away Lesson #1: Active Reading is the Effort to Understand

How to Read a Book is divided into four parts:

Part one discusses the first two levels of reading: elementary reading (the level of reading taught in elementary schools and high schools) and inspectional reading (methodical skimming and cursory reading.)
Part two contains the third level of reading, analytical reading: classifying the author’s arguments and information, coming to terms with the book’s line of reasoning, establishing the author’s implications, criticizing the book, and critiquing the author.
Part three covers the particular nuances of reading various types of literature: practical books, creative literature, stories, plays, poems, history, philosophy, science, mathematics, and social science.
Part four of the book is earmarked to the ultimate goals of reading—viz., expanding one’s mind for further understanding—a goal facilitated by “synoptical reading.” Since, per Carl Jung, “one book opens another,” a determined reader should peruse several works on the same subject with the intention of establishing a broader outlook of the subject matter. According to Adler, syntopical reading is the hallmark of scholarship: “Knowing that more than one book is relevant to a particular question is the first requirement in any project of syntopical reading. Knowing which books should be read, in a general way, is the second requirement.”

The essence of reading’s comprehension and appreciation lies in how best the reader can answer four questions during the course of reading a book:

During elementary reading: “What does the book say?”
During inspectional reading: “What is the book about?” How the author is trying to say it? What methodologies, narratives, substantiations, and examples does he use?
During analytical reading: “What does the book mean?” And, “Are the author’s arguments and claims valid—in whole or part? What is the significance of the author’s theses?”
During syntopical reading: “How does this book compare with other books?” And, “What other sources of knowledge could be pursued?”

How to Read a Book concludes with two appendices: (1) a list of titles in the “Great Books of the Western World” program, and (2) a number of exercises and tests on all four levels of reading.

Take-away Lesson #2: A Reader Must Suspend Judgment Until He Can Express the Author’s Positions

“You must be able to say, with reasonable certainty, ‘I understand,’ before you can say any one of the following things: ‘I agree,’ or ‘I disagree,’ or ‘I suspend judgment.'”
“Students who plainly do not know what the author is saying seem to have no hesitation in setting themselves up as his judges. They not only disagree with something they do not understand but, what is equally bad, they also often agree to a position they cannot express intelligibly in their own words.” As I’ve elaborated on this blog before (here, here, here, here, and here,) you must be able to accurately state—in your own words—the position of those you’re debating, before you can challenge them.
“When you disagree, do so reasonably, and not disputatiously or contentiously.” And, “Most people think that winning the argument is what matters, not learning the truth. He who regards conversation as a battle can win only by being an antagonist, only by disagreeing successfully, whether he is right or wrong.”

Take-away Lesson #3: Reading Well is Better Than Reading Widely

The objective of reading a book is to evolve to the level of the author: “In the case of good books, the point is not to see how many of them you can get through, but rather how many can get through to you.” Additionally, “Enlightenment is achieved only when, in addition to knowing what an author says, you know what he means and why he says it.”
Read a “difficult” book multiple times. Each time you read a specific book, you’ll discover more—new ideas, new concepts, and deeper truths.

“In tackling a difficult book for the first time, read it through without ever stopping to look up or ponder the things you do not understand right away.”
“It is generally desirable to skim even a book that you intend to read carefully, to get some idea of its form and structure.”
“Ask questions while you read—questions that you yourself must try to answer in the course of reading.”

Regarding the “ignorance of those who have misread many books”, Adler asserts that such people, “are, as Alexander Pope rightly calls them, bookful blockheads, ignorantly read. There have always been literate ignoramuses who have read too widely and not well.”

Recommendation: Mortimer Adler and Charles Van Doren’s How to Read a Book: The Classic Guide to Intelligent Reading is a smart reading that should be on everybody’s library. It is a goldmine of invaluable insights into the art of reading, debate, and persuasion.

The Dramatic Fall of Theranos & Elizabeth Holmes // Book Summary of John Carreyrou’s ‘Bad Blood’

September 10, 2018 By Nagesh Belludi Leave a Comment

Bad Blood: Secrets and Lies in a Silicon Valley Startup (2018) is Wall Street Journal investigative reporter John Carreyrou’s remarkable exposé on Theranos, the former high-flying Silicon Valley tech startup founded by Elizabeth Holmes.

Theranos formally dissolved last week after a high-profile scandal revealed that the company not only deceived investors, but also risked the health of thousands of patients.

A Gripping Narrative, A Charismatic CEO, and A Big Fraud

In 2015, Theranos was one of Silicon Valley’s superstars. Valued at some $9 billion, Theranos claimed an out-and-out disruption of the $73-billion-a-year blood testing industry. Elizabeth Holmes pitched a revolutionary technology that could perform multiple tests on a few drops of capillary blood drawn by a minimally invasive finger prick, instead of the conventional—and much dreaded—venipuncture needle method.

The Story of Theranos and Elizabeth Holmes received much adulation by the media Theranos has its origins in 2004, when the brilliant Holmes, then a 19-year old Stanford sophomore, dropped out of college to start the company. Her missionary narrative swayed just about everyone to believe in the potential she touted.

Over the years, Theranos attracted a $1 billion investment, an illustrious board of directors, influential business partners (Walgreens, Safeway, Cleveland Clinic,) and significant amounts of adulation by the media—all of this lent credence to Holmes’s undertaking. She was celebrated as the youngest, self-made female billionaire in the world.

Nobody Asked the Hard Questions

Theranos’s castle in the air started to crumble in October 2015, when Carreyrou’s first Wall Street Journal article reported that the company was embellishing the potential of Theranos’s technology. Based on past employees’ disclosures, the article also cast serious doubts on the reliability of Theranos’s science. Behind the scenes, Theranos performed a majority of its blood tests with commercial analyzers purchased from other companies.

The persistent question in Carreyrou’s Bad Blood is how the many smart people who funded, endorsed, defended, and wrote about this company never set aside their confidence in Holmes’s persuasions and looked beyond her claim of “30 tests from one drop of blood.”

Without much independent due diligence, Theranos’s supporters possibly assumed that everyone else had checked out the company, its founders, and its science. Theranos got away with its actions for as long as it did because no one could conceive of the idea that the business would simply lie as much as it did.

The Story of Theranos and Elizabeth Holmes Appeared so Promising That Everybody Wanted it to Be True

Bad Blood also draws attention to Silicon Valley’s many failings, including the cult of the celebrity founder. Holmes’s smoke and mirrors was enabled by the notion of a “stealth mode” in which many Silicon Valley startups operate to protect their intellectual property. Theranos never proved that its testing technology really worked. It was performing tests on patients without having published peer-reviewed studies, getting FDA certification, or carrying out external evaluation by medical experts.

Carreyrou acknowledges that Holmes’s initial intentions were honorable, even if naïve. What triggered Holmes’s downfall was the characteristic entrepreneurial “fake it till you make it” ethos—it inhibited her from conceding early on that her ambitions were simply not viable.

When things didn’t go as intended, Holmes exploited the power of storytelling to get everyone to buy into her tales. She continued to believe that the reality of the technology would catch up with her vision in the future. Trapped in a web of hyperbole and overpromises, Holmes and her associate (as well as then-lover) Sunny Balwani operated a culture of fear and intimidation at Theranos. They went as far as hiring superstar lawyers to threaten and silence employees and anyone else who dared to challenge the company or expose its deficiencies.

Book Recommendation: Bad Blood is a Must-Read

Every inventor, entrepreneur, investor, and businessperson should read Bad Blood. It’s a fascinating and meticulously researched report of personal and corporate ambition unraveled by dishonesty. This page-turner is a New York Times bestseller and is expected to be made into a movie.

Elevate Timing from Art to Science // Book Summary of Daniel Pink’s ‘When: The Scientific Secrets of Perfect Timing’

May 29, 2018 By Nagesh Belludi Leave a Comment

Daniel Pink’s When: The Scientific Secrets of Perfect Timing (2018) explores how the quality of the decisions we make are correlated with their timing.

Pink is an expert on motivation and management, and an author of such best-selling books as Drive: The Surprising Truth About What Motivates Us (2009) and To Sell is Human: The Surprising Truth About Moving Others (2012.) He describes When as not so much a “how-to” guide for making the most of our lives, but as a “when-to” manual for individual and group work.

The Best Times of the Day to Make Optimum Decisions

Pink’s principal theme is chronobiology—the science of how the body’s biological clocks can influence our cognitive abilities, moods, and attentiveness.

Drawing on scientific research on the science of timing, Pink concludes that the mental acuity, creativity, productivity, temper, and frames of mind for most folks follow an identifiable “peak-trough-rebound” template. Most people get their best work done in the mornings, suffer a trough of mental weariness in the afternoon, and experience a late-evening burst:

Our cognitive abilities do not remain static over the course of a day. During the sixteen or so hours we’re awake, they change often in a regular, foreseeable manner. We are smarter, faster, dimmer, slower, more creative, and less creative in some parts of the day than others. … [R]esearch has shown that time-of-day effects can explain 20 percent of the variance in human performance on cognitive undertakings.

Needless to say, this “peak-trough-rebound” phenomenon is fairly universal but differs among individuals. There are “larks” who do remarkably well in the mornings and “owls” who tend to embrace their late night productivity habits.

Optimizing Your Day with Daily Rhythms

According to Pink, “peak-trough-rebound” is attributable to the body’s relatively low temperature when we wake up. The increasing body temperature gradually boosts our energy level and alertness, which consequently “enhances our executive functioning, our ability to concentrate, and our powers of deduction.” As the morning evolves, we become more focused and alert until we hit a peak. Then our energy level wanes and our alertness declines, only to be restored in early evening.

Pink concludes that mornings are good for decision-making and that errors increase in the afternoons. Studies recommend that we schedule surgery in the mornings when surgeons tend to make fewer mistakes and avoid petitioning a traffic ticket in the afternoons because judges tend to be less considerate than in the mornings.

“Breaks are Not a Sign of Sloth but a Sign of Strength”

Pink emphasizes the risks of clouded judgment that characterizes the afternoon “trough.” As an example, Pink speculates that the sinking of the RMS Lusitania in 1915 was about the time of day—it’s captain’s ill-fated decisions were made in the afternoon following a night of no sleep.

With case studies of error-reduction in hospital operating rooms, Pink suggests “vigilance breaks” (quick team huddles for reviewing checklists and verifying courses of action) and restorative breaks (naps, short physical activities, or mental diversions) during troughs to “recharge and replenish, whether we’re performing surgery or proofreading advertising copy.”

“Timing is Everything” and “Everything is Timing”

Based on the mentioned studies’ correlations and causations, Pink offers advice further than daily scheduling—from marriage to switching careers and sports:

The best time to perform a specific task depends on the nature of that task. Identify your chronotype (Pink offers an online survey,) understand your task, and decide on the most suitable time. Do not let mundane tasks sneak into your peak period. Additionally, if you’re a boss, understand your employees’ work patterns and “allow people to protect their peak.”
Tasks that need creativity and a flash of insight (rather than analytical perspicacity) are best done during the late-evening recovery period when the mind tends to be less inhibited and more open to inventive associations.
Harness the psychological power of beginnings—New Year’s Days, birthdays, and anniversaries are all natural times to make resolutions and start working on goals. Other opportunities for fresh starts include the first of the month, the beginning of the week, and the first day of spring.
“Lunch breaks offer an important recovery setting to promote occupational health and well-being”—especially for “employees in cognitively or emotionally demanding jobs.”
Afternoon coffee followed by 10- to 20-minute naps and leisurely daily walks are “not niceties, but necessities.” Drink a cup of coffee just before a nap—the 25 minutes it takes for the caffeine to kick in is the optimal length of a restorative siesta.
Morning workouts are best for people aiming to burn fat, lose weight, or build sustainable exercise habits. Folks trying to reach personal bests should seek out the afternoons, when physical performance tends to reach its zenith.
Studies suggest that people are most likely to run their first marathons at ages ending in 9—but those ages are also when people are most prone to cheating on their spouses.
According to one survey, switching jobs every three to five years in your early career can lead to the biggest pay increases.

Recommendation: Skim Daniel Pink’s ‘When’ for the Life Hacks

Daniel Pink’s When: The Scientific Secrets of Perfect Timing offers little fresh substance. Many of the cited studies’ implications, causations, and correlations are open to debate.

A speed-read of When, especially of the takeaway points at the end of each chapter, can offer some practical tips about when you are likely to be creative, focused, and least error-prone.

Parenthetically, the third and the final section on “Synching and Thinking” is out-of-place to Pink’s principal theme of timing, even if the case study of the synchronized effort that constitutes the Mumbai Dabbawala lunchbox delivery system is interesting. Pink explains that the importance of “syncing up” with people around you through a collective sense of identity and a shared purpose is “a powerful way to lift your physical and psychological well-being.”

Complement skimming Daniel Pink’s When with Michael Breus’s The Power of When (2016; Talk at Google.)

Books I Read in 2017 & Recommend

January 5, 2018 By Nagesh Belludi Leave a Comment

Management & Leadership: Peter Drucker’s The Practice of Management. Drucker’s conception for the organization as an integral part of society, his elucidation of the nature of managerial and leadership tasks, his emphasis on good governance, and his prescription for effective leadership have served managers well over the decades. The Practice of Management is one of those books that Drucker’s admirers tend to appreciate more with every successive reading. [Read my summary.]
Psychology & Self-Help: Josh Kaufman’s The First 20 Hours. A learning addict’s approach to learning new things to a good-enough level—but not to perfection. “In my experience, it takes around twenty hours of practice … to go from knowing absolutely nothing about what you’re trying to do to performing noticeably well. … It doesn’t matter whether you want to learn a language write a novel, paint a portrait, start a business, or fly an airplane. If you invest as little as twenty hours in learning the basics of the skill, you’ll be surprised at how good you can become.” [Read my summary.]
Management: Leigh Branham’s The 7 Hidden Reasons Employees Leave. Discusses many ideas for employee “engagement practices” in great specificity to help managers and leaders keep their antennae up for signs of employees’ bitterness and discontent, and correct before they lose their best and brightest people. This practical volume can also help employees discuss and resolve their workplace needs and aspirations. [Read my summary.]
Influence & Leadership: Jeswald Salacuse’s Leading Leaders. “You need to take account of the interests of the persons you would lead. Leaders will follow you not because of your position or charisma, but because they consider it in their interest. Your job as a leader is to convince them that their interest lies with you.” [Read my summary.]
Education & Teaching: Howard Gardner’s The Unschooled Mind. To enable the highest degrees of understanding, any skills instruction must be systematically reinforced by instruction in which the deployment of the skills makes holistic sense. [Read my summary.]
Psychology & Self-Help: Victor Frankl’s Man’s Search for Meaning. Habitually, your narratives and emotions dictating your actions. Frankl’s key message is that amid the various stimuli and responses, you have the freedom to choose your responses to any given set of circumstances. Frankl also introduces “logotherapy,” the psychotherapy system he conceived to help you uncover a sense of purpose in life and survive nearly anything. [Read my summary and my notes on Frankl’s exposition of the meaning of suffering.)
Biography & Entrepreneurship: Howard Schultz’s Pour Your Heart Into It. According to the ‘founder’ of Starbucks, Starbucks succeeded because the company offers more than just good coffee. The extraordinary growth of Starbucks derives from the corporate values he endorsed, viewing people as being more important than profits. The Starbucks marvel is not only about economic growth and brand success, but also about its socially conscious corporate ethos. [Read my summary.]
Biography & Leadership: Nicholas Carlson’s Marissa Mayer and the Fight to Save Yahoo! Beyond the tome’s gossipy narrative of Mayer’s management style, readers of this page-turner will be interested in Yahoo leadership’s strategic and tactical missteps. Particularly fascinating are how Yahoo missed opportunities to buy Google and Facebook when they were mere startups, the rebuffing of an acquisition bid from Microsoft, a lack of strategic focus, the leadership skirmishes with activist investors, the revolving door at the CEO’s office, and an Asian-asset drama. [Read my summary.]
Biography & Leadership: Donald Keough’s Ten Commandments for Business Failure. Celebrated Coca-Cola executive Donald Keough offers a predictable, yet insightful—even if circuitous—exploration of ten (and a bonus) leadership mistakes. A worthwhile read for its many nuggets of business history, including his take on the infamous New Coke debacle. [Read my summary.]
Management & Leadership: Jeffrey K. Liker’s The Toyota Way. Toyota’s long-term standing as the epitome of quality production is undeniable. According to Liker, the genius of Toyota lies in how it has steadily institutionalized common-sense principles for waste reduction and continuous improvement. “Toyota is process oriented and consciously and deliberately invests long term in systems of people, technology and processes that work together to achieve high customer value.” [Read my summary.]

Also, my book recommendations from 2016, 2015, and 2014.

You may be interested in my article on how to process that pile of books you can’t seem to finish and my article on why we read self-help books.

Wish you all very enlightening reads in 2018! Recall the words of the American philosopher Mortimer J. Adler, who said, “In the case of good books, the point is not to see how many of them you can get through, but rather how many can get through to you.”

Death to Bureaucracy

September 6, 2017 By Nagesh Belludi Leave a Comment

Bureaucracy can suck the life out of any organization by rewarding complacency and inertia.

Efficient managers are annoyed with the speed of bureaucracy. Internal rules and policies for making and approving decisions slow down managerial undertakings. In a world where fast, disruptive innovation has become foremost, any company can ill afford the time or expense of operating with bureaucratic mindsets.

Management pioneer Peter Drucker’s enduring condemnation of bureaucracy, formalities, and rules and regulations hit the peak with his ground-breaking editorial called “Sell the Mailroom,” first published in the Wall Street Journal in 1989 and then republished in 2005.

At a time when the great majority of businesses were engaged in making an effort to improve the efficiency of support staff, Drucker brashly advocated that bureaucratic support should be eliminated by outsourcing their work to outside contractors. Drucker observed,

In-house service and support activities are de facto monopolies. They have little incentive to improve their productivity. There is, after all, no competition. In fact, they have considerable disincentive to improve their productivity. In the typical organization, business or government, the standard and prestige of an activity is judged by its size and budget—particularly in the case of activities that, like clerical, maintenance, and support work, do not make a direct and measurable contribution to the bottom line. To improve the productivity of such an activity is thus hardly the way to advancement and success. When in-house support staff are criticized for doing a poor job, their managers are likely to respond by hiring more people. An outside contractor knows that he will be tossed out and replaced by a better-performing competitor unless he improves quality and cuts costs.

Idea for Impact: Drop unnecessary work.

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Leadership Reading

Values First

Empowerment through Trust

Delivering Wow!

Idea for Impact: Foster a foundation of customer-centricity

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Take-away Lesson #1: Active Reading is the Effort to Understand

Take-away Lesson #2: A Reader Must Suspend Judgment Until He Can Express the Author’s Positions

Take-away Lesson #3: Reading Well is Better Than Reading Widely

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A Gripping Narrative, A Charismatic CEO, and A Big Fraud

Nobody Asked the Hard Questions

The Story of Theranos and Elizabeth Holmes Appeared so Promising That Everybody Wanted it to Be True

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The Best Times of the Day to Make Optimum Decisions

Optimizing Your Day with Daily Rhythms

“Breaks are Not a Sign of Sloth but a Sign of Strength”

“Timing is Everything” and “Everything is Timing”

Recommendation: Skim Daniel Pink’s ‘When’ for the Life Hacks

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