Right Attitudes

Ideas for Impact

MBA in a Nutshell

Reinvent Everyday

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General Electric supremo Jack Welch’s advice to Indian-American investor and businessman Vivek Paul:

Every time I land in New York after an international business trip, I imagine that I’ve just been appointed chairman and that this is my first day in the role, and the guy before me was a real dud. Every time I think, “What would I do that was different than the guy before? What big changes would I make?”

When you can think about expectations from a more detached point of view, rather than an immersed point of view, you aren’t overly invested in an entrenched pattern of thinking.

A period of rest, entertainment, or exposure to an alternative environment can dissipate fixation and help you gain a fresh perspective. It makes you think big. Subconsciously, you can push yourself harder and go after bigger, loftier, harder goals.

Idea for Impact: Don’t limit yourself by past expectations.

Wondering what to read next?

  1. Easy Money, Bad Deals, Poor Timing: The General Electric Debacle // Summary of ‘Lights Out’
  2. How to Solve a Problem By Standing It on Its Head
  3. Stuck on a Problem? Shift Your Perspective!
  4. Looking at Problems from an Outsider’s Perspective
  5. How to Stimulate Group Creativity // Book Summary of Edward de Bono’s ‘Six Thinking Hats’

Don’t Try to Convince Every Potential Customer

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Many entrepreneurs believe that their innovation is so unique and valuable that the whole world will want it, and if a potential customer won’t get it within seconds, it’s only a question of hammering it into their heads.

Don’t try to convince every potential customer to buy your product or service. If they get your innovation within, say, three minutes—excellent. If not, move on.

As you go about selling your product or service in the early stages of your business, you may find specific customers who will get what you’re doing. They’ll cheerfully buy your solution if they could be convinced that your solution can solve a problem they have (or if you can help them recognize a problem that they have but don’t see it yet.)

If you’re starting out, such customers will be your early adopters. At this stage, they’re the ones that are your biggest fans (or critics) and can be an enormous asset for gaining traction by word-of-mouth.

Idea for Impact: Instead of misusing your marketing efforts on convincing all those who don’t get it and may never get it, laser-focus on identifying, courting, and engaging the early adopters.

Wondering what to read next?

  1. Bad Customers Are Bad for Your Business
  2. How to Develop Customer Service Skills // Summary of Lee Cockerell’s ‘The Customer Rules’
  3. How Ritz-Carlton Goes the Extra Mile // Book Summary of ‘The New Gold Standard’
  4. How to Deal with Upset Customers
  5. How to Buy a Small Business // Book Summary of Richard Ruback’s HBR Guide

This Hack Will Help You Think Opportunity Costs: Goals and Anti-Goals

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Goals and Anti-Goals---Opportunity Cost Making decisions is all about opportunity costs. For instance, every time you spend money to get something, you should ask yourself what else, perhaps of better value, you could get with that money—now or later.

The problem is, when forced to choose between something immediate and concrete and something else that’s comparatively abstract and distant, the opportunity cost could lack clarity.

Duke University behavioral economist Dan Ariely proposes the notion of “anti-goals” to help examine the trade-offs you’re forced to make. Ariely encourages pairing goals such that if you satisfy one, you’ll impede the other. For example, when choosing to spend $100 on an evening out today, you can consider a tangible anti-goal—say, saving for the family’s summer vacation—that’ll be held back.

Idea for Impact: Thinking about what you want to avoid—the anti-goal—is a potent tool. It allows you to focus on things that really matter.

Wondering what to read next?

  1. Everything in Life Has an Opportunity Cost
  2. Effective Goals Can Challenge, Motivate, and Energize
  3. “Goals Gone Wild”: The Use and Abuse of Goals
  4. The Power of Sharing Your Goals
  5. Missing in SMART goals: the ‘Why’

Five Rules for Leadership Success // Summary of Dave Ulrich’s ‘The Leadership Code’

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The key to success in any discipline is to figure out the few things that must be done really well and to get those basics right. But so many leaders fail on the fundamentals—and don’t even realize it.

The real implication of leadership has been buried deep over the years: leadership isn’t about the position but about who you are and the responsibility you can undertake. Leadership consultants Dave Ulrich, Norm Smallwood, and Kate Sweetman’s The Leadership Code: Five Rules to Lead By (2009) argues that everything you ever need to know about leadership comes down to five straightforward rules.

If you understand these rules and put them into practice, you can’t fail to spur others and enrich teams, organizations, or communities.

'The Leadership Code' by Dave Ulrich (ISBN 1422119017) Rule 1: Be A Strategist. Deliberate leaders answer the question “Where are we going?” and mull over multiple time frames. They institute a great enough sense of urgency and remove impediments to the new vision. They anticipate the future and work with others to determine how to advance from the present to the desired future. Shape the future.

Rule 2: Be an Executor. The “executor” aspect of leadership focuses on the question, “How will we make sure we get to where we are going?” Effective leaders understand how to make change happen, assign accountability, assess plans, coordinate efforts, and share information that should be incorporated into strategies. Make things happen.

Rule 3: Be a Talent Manager. Leaders who engage talent now answer the question, “Who goes with us on our business journey?” They select the right people for the right job and ensure that people have the right tools and autonomy to succeed. Leaders foster an inviting organization, create a high level of performance and passion, and continuously monitor problems that need to be fixed. Engage today’s talent.

Rule 4: Be a Human Capital Developer. Leaders who are talent developers answer the question, “Who stays and sustains the organization for the next generation?” Leaders take the time to become aware of how future trends could affect their organizations. They position their teams to win by bearing in mind the longer-term competencies required for future strategic success. Build the next generation.

Rule 5: Be Proficient. Leadership demands are more daunting than ever, and the pressure to perform is relentless. Create regular timeouts to review where you invest your time and energy to ensure that you remain capable of self-managing your personal strengths and weaknesses and generating new behaviors to deal with new challenges. Invest in yourself.

As with most “rules-for-success” books, the authors tout their assessment of “hundreds of studies, frameworks, and tools.” But their work is no more than a distillation of notable leadership thinkers’ experiences. Nonetheless, the rules sound right. The five rules are simple, but they aren’t easy. They are sensible and practicable. They’re what you can focus your effort on for maximum return.

Recommendation: Quick read The Leadership Code. It makes a great early book choice for new leaders. It provides a grounded approach to the fundamentals.

Never underestimate the power of key leadership principles that can be well executed. Complement The Leadership Code with Peter Drucker’s The Practice of Management (1954; my summary) and Julie Zhuo’s The Making of a Manager (2019; my summary.)

Wondering what to read next?

  1. How to Manage Smart, Powerful Leaders // Book Summary of Jeswald Salacuse’s ‘Leading Leaders’
  2. Use The STAR Technique to Ace Your Behavioral Interview
  3. Lessons from Lockheed Martin’s Skunk Works: Autonomy Can Create Innovative Workplaces
  4. Book Summary of Peter Drucker’s ‘The Practice of Management’
  5. One of the Tests of Leadership is the Ability to Sniff out a Fire Quickly

What Elon Musk and Jeff Bezos Learn on the Floor

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The Frontline Advantage

What Leaders can Learn

Leaders can learn a great deal on the frontlines, not only about the inner workings of the products they produce and the services they offer but also about their employees:

  • Tesla CEO Elon Musk sees being on the production line and understanding it an integral part of his job. Musk famously declared, “I have a sleeping bag in a conference room adjacent to the production line, which I use quite frequently.” He has helped his California factory hit its production goals—even “real-time triaging cars at the end of the line trying to get to the root cause of what the issues were.”
  • Amazon requires its deskbound managers to attend two days of call-center training. CEO Jeff Bezos said in 2007, “Every new employee, no matter how senior or junior, has to go spend time in our fulfillment centers within the first year of employment. Every two years they do two days of customer service. Everyone has to be able to work in a call center. … I just got recertified about six months ago. The fact that I did a lot of customer service in the first two years has not exempted me.”
  • Subway Restaurants’ chief development officer Don Fertman appeared incognito as a “sandwich artist” for a week on the popular CBS Undercover Boss reality TV show in 2010. Fertman remarked that this ground-level perspective offered managerial empathy and led to better decisions. Subway’s senior-level executives are now required to spend a week every year in the field, becoming aware of how their choices influence franchisees and customers.

Idea for Impact: The frontlines offer leaders unfiltered information

Leaders, don’t risk the ego trap of losing touch with the frontline experience.

Venture out of the office and work directly with frontline employees. Even do the work of those they lead for a while. You’ll break down the hierarchy and glean a valuable new perspective.

Don’t forgo the frontline advantage—that’s where problems are discovered, and solutions are born.

Wondering what to read next?

  1. Creativity by Imitation: How to Steal Others’ Ideas and Innovate
  2. How Ritz-Carlton Goes the Extra Mile // Book Summary of ‘The New Gold Standard’
  3. Lessons from the Biography of Tesla’s Elon Musk
  4. How to Manage Smart, Powerful Leaders // Book Summary of Jeswald Salacuse’s ‘Leading Leaders’
  5. Success Conceals Wickedness

Fail Cheaply

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E-Fan X wind tunnel test model (Courtesy: Airbus)

One way to accelerate innovation is to undertake low-risk experiments.

Failures in the innovation process can be costly and time-consuming. It’s often wiser to try low-risk, low-cost, high-payoff experiments than ruminating endlessly.

Make your experiments cheaper. You don’t need to create a full-scale concept to test it. Find low-cost ways to test your assumptions. It may take time and iteration to find what works for you.

  • Engineers often use surrogate modeling techniques that use simple prototypes and mock-ups that are as representative as possible.
  • Counter to the phrase “it takes money to make money,” shrewd entrepreneurs know how to experiment multiple ways for minimal cost. Next, they scale up one or two experiments that have given them favorable results. The losses are small, and the potential gains much larger.

Idea for Impact: The worst way to fail is slow and big. Don’t eliminate failure. Only reduce the cost of failure.

Wondering what to read next?

  1. Everything in Life Has an Opportunity Cost
  2. Lessons from Lockheed Martin’s Skunk Works: Autonomy Can Create Innovative Workplaces
  3. Creativity by Imitation: How to Steal Others’ Ideas and Innovate
  4. How to Handle Conflict: Disagree and Commit [Lessons from Amazon & ‘The Bezos Way’]
  5. Five Where Only One is Needed: How Airbus Avoids Single Points of Failure

Avoid Being the Low-Priced Competitor

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In determining how much you’ll charge for your products and services, explore the “price umbrella”—how others are charging for competitive or comparable products.

The key to pricing is knowing how much your service is worth for your client. Charge too little, and you’re short-changing yourself and making your client speculate, “If she’s decent, why does she charge so little?”

Avoid being a low-price competitor. It’s a terrible habit. Don’t announce, “I’m new. I’m trying to get established. Therefore, I’m offering my service for less than the existing players. Please buy from me.”

Avoid Being the Low-priced Competitor Jim Price, an entrepreneurship lecturer at the University of Michigan-Ann Arbor and author of The Launch Lens: 20 Questions Every Entrepreneur Should Ask (2018,) calls this “apologetic pricing.”

Instead, consider the “proud pricing” approach: “We’re launching this business because we firmly believe in our unique value proposition; we look forward to explaining that to customers and charging a premium price for a superior product.”

Positioning yourself as the low-price market offering is a competitive strategy that tends to only work for large, undifferentiated retailers and similar businesses, and it is a poor prescription for entrepreneurial startup success.

Being the low-priced competitor tends to require massive operational and financial scale and often results in an undifferentiated product or service offering and a business with very narrow profit margins.

Idea for Impact: Don’t get stuck in the race to the bottom to be cheaper. Marketing expert Seth Godin has reminded, “Cheaper is the last refuge of the marketer unable to invent a better product and tell a better story.”

Wondering what to read next?

  1. How to Buy a Small Business // Book Summary of Richard Ruback’s HBR Guide
  2. Three Leadership Lessons from Ron Johnson’s Debacle at J.C. Penney
  3. Clever Marketing Exploits the Anchoring Bias
  4. On Recruiting from a Competitor
  5. Easy Money, Bad Deals, Poor Timing: The General Electric Debacle // Summary of ‘Lights Out’

Lessons from Toyota: Genchi Genbutsu

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Lessons from Toyota: Genchi Genbutsu - Go to the Source and See for Yourself

Firsthand, on-the-frontlines observation can offer critical insights that facilitate informed—and inspired—decision-making.

The Japanese approach to problem-solving calls this Genchi Genbutsu (literally “go and see for yourself.”) Sometimes called “get your boots on,” it’s not unlike the notion of management by walking about (MBWA.)

Genchi Genbutsu Refers to a Disposition Than a Specific Action

Genchi Genbutsu is rooted in the idea that any report, say, about a problem on the shop floor, is an abstraction. It’s separated from its context, and therefore generalized and relativized.

Secondhand information tends to misrepresent reality enough to give you a false sense of conviction. The only real way to understand a problem is to see it on the shop floor and get the full breadth and depth of information to make the right decision.

For that reason, any solution concocted at headquarters, where the report is received and the problem diagnosed from a distance, is doubly abstracted from the source.

Genchi Genbutsu isn’t a license for management interference, but to understand the problem, unearth the root cause, and help those doing it to resolve the issue.

Genchi Genbutsu Case Study: Toyota Sienna and the 53,000-Mile Roadtrip

When Yuji Yokoya was appointed the chief engineer for the 2004 Toyota Sienna minivan, he had never designed a vehicle purposely for the North American market. He traveled 53,000 miles across North America to monitor and discover what was wrong with the previous Sienna models. He drove the Sienna and competitor’s minivans through every state in America, every province in Canada, and every state in Mexico. in February 2003, Forbes noted,

In Memphis, Yokoya’s minivan was blown into the next lane crossing the Mississippi from Tennessee to Arkansas. Fix: Yokoya reduced the van’s wind resistance by narrowing the gaps between panels and adding plastic shields under the wheel wells to redirect air.

In Yukon Territory, road noise on the Alaska Highway prevented conversation between the driver and rear passengers. Fix: Yokoya stiffened undercarriage to reduce twisting and added sound-dampening material to the frame.

A culture of on-the-spot problem solving is so ingrained in the Toyota culture. According to company lore,

In the mid-’70s, Toyota had just introduced a four-speed automatic transmission. It was very unusual to have an automatic transmission fail, if ever. It seemed indestructible. When Dr. Shoichiro Toyoda [scion of the founding family and chairman of Toyota 1992–99] visited a dealership, the dealer complained that a car just came in with a transmission that had failed. Dr. Toyoda, in his pressed suit, walked over to the technician, got in a dialogue with him, walked over to the oil pan where he’d drained the oil from the transmission, rolled his sleeve up, and put his hand in this oil, and pulled out some filings. He put the filings on a rag, dried them off, and put them in his pocket to take back to Japan for testing. He wanted to determine if the filings were the result of a failed part or if it was residue from the machining process.

Genchi Genbutsu Case Study: Medtronic and the Bloody Catheter

In the late ’80s, when Bill George became CEO of medical equipment manufacturer Medtronic, he discovered that its catheter sales weren’t good enough. His engineers had said the product was first-rate and improving.

When George visited an operating room to observe a surgical procedure, Medtronic’s catheter fell apart in the surgeon’s hands as soon as he inserted the balloon catheter into the patient’s femoral artery. The surgeon extracted the catheter from the patient. In a fit of rage, he hurled the blood-spattered device across at George, who ducked to avoid injury.

This “Bloody Catheter” incident helped Medtronic fix faulty products and spurred a thorough overhaul of Medtronic’s engineering, sales, and problem-solving processes. George later recalled,

Field reports are a dime a dozen. There’s no emotional association with them. But when you’re in a medical environment like an operating room, all your senses-sight, sound, smell, taste-are working. It’s a totally different experience than reading a field report.

Idea for Impact: If you haven’t experienced something firsthand, your knowledge about it is probably suspect

Even in the information age, not all knowledge you need can be at your fingertips. Go to the source. Be where the action happens. Don’t forego the power of emotional input.

Wondering what to read next?

  1. Learning from the World’s Best Learning Organization // Book Summary of ‘The Toyota Way’
  2. How Smart Companies Get Smarter: Seek and Solve Systemic Deficiencies
  3. What Elon Musk and Jeff Bezos Learn on the Floor
  4. Books I Read in 2017 & Recommend
  5. Easy Money, Bad Deals, Poor Timing: The General Electric Debacle // Summary of ‘Lights Out’

How Can a Manager Get Important Things Done?

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Distinguish the Variances That Require a Manager’s Attention

When critical care facilities in hospitals monitor patients’ vital signs, staff nurses are notified only when vital signs go beyond each patient’s pre-programmed range. Unless the monitoring devices sound an alarm, nurses take for granted that the patient’s condition is stable enough and will receive only routine medical attention.

Management by Exception: How Can a Manager Get Important Things Done The “Management by Exception (MBE)” method is the notion that a manager’s attention must be focused only on those areas in absolute need of his/her engagement.

As a rule, lower-level managers should handle recurring decisions. Only problems concerning extraordinary matters should be referred to higher-level managers.

This “exception principle” emphasizes that executives at the upper levels of an organization have serious restrictions on their time, capacity, and willpower. They should refrain from being caught up in minutiae that can be handled just as effectively by their junior managers.

A case in point: many companies establish protocols that designate the level of authorization required for purchases. Companies delegate authority carefully, prescribing spending limits for each level. For instance, a team leader’s approval is necessary for purchases of over $1,000. A department manager must approve purchases of over $5,000, the divisional leader for purchases of over $10,000, and the CEO for purchases over $50,000.

Managers Just Can’t Do Everything

The exception principle helps managers focus their attention on more worthy matters that justify their attention. Most managers hesitate to manage by exception because of the very human predisposition to focus on the immediate, tangible, and well-defined problems as against the distant, high-priority, challenging, and abstract problems.

In other words, mangers must distinguish programmed decisions from non-programmed decisions. Programmed decisions are routine activities that are well-defined and can be dealt with by using an established protocol. Non-programmed decisions are exceptional or significant endeavors that involve unfamiliar, one-time, and unstructured problems needing higher-level decision-making.

Idea for Impact: Don’t Get Lost in the Thicket of Trivia

As a manager, there are only a few things that you must do. Focus on those and delegate the rest. But keep an eye on how things are going; you are still accountable for any work you delegate.

Decentralize as much decision-making as possible. Establish protocols and standard operating procedures (SOPs) that empower your staff and enable your organization virtually to run itself.

Identify what deviations constitute as an exception and intervene only to solve significant problems.

Wondering what to read next?

  1. Manager Tools’ Feedback Model
  2. A Fast-Food Approach to Management // Book Summary of Blanchard & Johnson’s ‘The One Minute Manager’
  3. A Guide to Your First Management Role // Book Summary of Julie Zhuo’s ‘The Making of a Manager’
  4. Book Summary of Leigh Branham’s ‘The 7 Hidden Reasons Employees Leave’
  5. Ten Rules of Management Success from Sam Walton

A Guide to Your First Management Role // Book Summary of Julie Zhuo’s ‘The Making of a Manager’

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First-time managers are often unprepared for—even unaware of—the responsibilities and challenges of being a manager. This is particularly true at fledging startups that don’t have bonafide HR departments to guide their novice managers nor can afford management coaches. Besides, it takes a new boss a year or two to learn the basics and become comfortable in his/her new role.

Julie Zhuo, Vice President of Product Design at Facebook When Facebook was small enough and “the entire company could fit into a backyard party,” 25-year old product designer Julie Zhuo was asked to become a manager. Zhuo had started at Facebook as its first intern and then gone full-time. Having no prior managerial experience, she acted how she thought managers were supposed to act and made many mistakes. In due course, she found joy in the role, expanded her skill set, and evolved to become Facebook’s VP of product design.

In The Making of a Manager: What to Do When Everyone Looks to You (2019,) Zhuo has chronicled her experiences from ramping-up into management and getting to know herself better. It’s the book she wishes had been there for the novice manager that she was.

Zhuo offers many hard-earned insights that only time in the trenches can reveal:

  • Operate from first principles. “Your job, as a manager, is to get better outcomes from a group of people working together.”
  • Not everyone is cut out for a managerial responsibility. “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.”
  • Let go of your old “individual contributor” role and make the shift to being the boss. Don’t spend time trying to do the work. Invest your time in coaching, supporting, and developing employees. Don’t run interference between them.
  • Discover your decision-making proclivities. Map out your strengths and weaknesses. “Great management typically comes from playing to your strengths rather than from fixing your weaknesses.”
  • Realize that the source of your power as a manager is everything but formal authority. Respect trumps popularity.
  • Don’t manage everyone in the same way. Learn to appreciate how distinctive each individual is in what he/she wants from work and what animates him/her to work well.
  • Trust is a critical ingredient in relationships. “Invest time and effort into creating and maintaining trusting relationships where people feel they can share their mistakes, challenges, and fears with you.”

'The Making of a Manager' by Julie Zhuo (ISBN 0735219567) Zhuo offers practical—if basic, but sufficient—advice for setting a vision, assessing the culture, delegating problems, giving feedback, aligning expectations, setting priorities, establishing a network of allies and confidants, hiring cleverly, and other responsibilities of leading a team. She delves into many difficult circumstances she’s encountered, e.g., handling previously-peers-now-employees whom she passed over for a promotion.

Recommendation: The Making of a Manager is an excellent primer for novice managers. It offers an insightful, practical, and relevant playbook for making the transition from being an outstanding individual contributor to becoming a good manager of others.

Complement with Andy Grove’s High Output Management (1983,) Loren Belker et al.’s The First-Time Manager (2012,) and Michael Watkins’s The First 90 Days (2013.)

Wondering what to read next?

  1. Manager Tools’ Feedback Model
  2. A Fast-Food Approach to Management // Book Summary of Blanchard & Johnson’s ‘The One Minute Manager’
  3. Books I Read in 2019 & Recommend
  4. Book Summary of Peter Drucker’s ‘The Practice of Management’
  5. Compilation of Job Interview Questions