Mental Models

Is The Customer Always Right?

July 14, 2022 By Nagesh Belludi Leave a Comment

No matter how finicky or rude a customer is, many businesses make employees treat bad customers with unquestioned respect or risk reprobation—even getting sacked.

Per the well-worn business adage, is “the customer is always right?” No, they’re not. Sometimes they’re wrong, and they need to be told so.

Your goal should be to do business with people that you enjoy doing business with. Some customers simply aren’t good customers. They don’t follow directions and complain irrationally. They have unreasonable expectations, and they treat your people rudely.

Idea for Impact: A prudent maxim is, “the customer is usually right.” Put the customer first, but don’t get mistreated by them. Putting the customer first doesn’t mean putting employees second. As a business, you must let customers be wrong with respect and dignity; but employees should be authorized to caution some customers, “After due consideration, we believe your actions are unacceptable. Persist, and we’d choose to lose your business.” Some bad customers are just bad for your business.

Almost always, though, unhappy customers are your greatest source of learning; they can especially offer an honest assessment of the expectations you’re setting. Customer satisfaction with a transaction depends on their expectations going into it.

The #1 Learning from Sun Tzu’s Art of War: Avoid Battle

July 11, 2022 By Nagesh Belludi Leave a Comment

The Art of War, Chinese strategist-philosopher Sun Tzu’s treatise on military strategy, is studied not so much for the advice it gives but for the state of mind it encourages. Developed in only six thousand Chinese characters and 25 pages of text, this way of thinking has held vast sway in such fields as military planning, strategic management, and negotiating. “Every battle is won or lost before it is fought.”

Something exceptional about the Art of War is the extent to which it’s devoted to methodically avoiding battle altogether. War isn’t something to be entered rashly or for petty reasons. “A sovereign should not start a war out of anger, nor should a general give battle out of rage. While anger can revert to happiness and rage to delight, a nation that has been destroyed cannot be restored, nor can the dead be brought back to life.”

Nor is war’s dominant purpose to cause physical destruction to an enemy. Instead, the pinnacle of military skill is to conquer one’s opponent strategically—by penetrating his alliances, rattling his plans, and coercing him diplomatically—without ever resorting to armed combat. “Why destroy,” Sun Tzu poses, “when you can win by stealth and cunning? To subdue the enemy’s forces without fighting is the summit of skill.”

Sun Tzu’s insistence that an enlightened strategist can attain victory without fighting echoes the foundational Taoist doctrine of “non-action (Wu-Wei.”) Armed conflict, therefore, is the last resort. War in itself represents a significant defeat. As a matter of course, Sun Tzu allocates a good chunk of the Art of War to the line of combat and attack. A savvy general must, however, take every accessible measure to gain victory swiftly, with minimal casualties and suffering for both sides. “The best approach is to attack the other side’s strategy; next best is to attack his alliances; next best is to attack his soldiers; the worst is to attack cities.”

Again and again, through implication, Sun-Tzu’s war document posits peace and restraint—the avoidance of battle—as the utmost victory. To fight at all, Sun-Tzu insists, is already a substantial loss, much worse than losing in war.

Idea for Impact: The Art of War is a worthy course on conflict management because avoiding confrontation requires more remarkable skill than winning on the battlefield.

What if Something Can’t Be Measured

July 4, 2022 By Nagesh Belludi Leave a Comment

During a September-2021 Airlines Confidential podcast (via Gary Leff’s View from the Wing,) former Spirit Airlines CEO Ben Baldanza told an exciting story about the airline industry’s systematic approach to reckon if potential new routes are economically feasible:

For the most part, airlines rely on data—required and reported by the Bureau of Transportation Statistics—on ticket purchases that show the number of people flying a given route and what price. For example, New Orleans, which is home to one of the largest Honduran populations in the U.S., has not had direct service to Honduras. Spirit Airlines will therefore analyze data from Sabre Market Intelligence for 2019 showing O&D (Origin and Destination) traffic between New Orleans and Honduras.

Sometimes, though, there’s no data on historical demand on a route, such as when Spirit Airlines was considering service to Armenia, Colombia. There hadn’t ever been a U.S. carrier flying into the airport, so there wasn’t available traffic data Spirit could access. Instead, Spirit looked at telephone data and migrant remittance statistics to get a sense of ties between the U.S. and the Latin American city. Spirit studied the frequency with which people were calling friends and relatives and how much money and how frequently money was being remitted as a reliable metric to determine if the new route was viable.

Spirit Airlines relies heavily on leisure bookings, especially visiting friends and relatives (VFR) traffic. In the absence of historical yield data for a route being considered, Spirit used fund transfers to Latin America as a stand-in variable.

A surrogate metric or proxy metric is exactly that—a substitute used in place of a variable of interest when that variable can’t be measured directly or is difficult to measure. For example, per-capita GDP is often a proxy for the standard of living, and the value of a house is a stand-in for the household’s wealth. Freight tonnage is often a proxy for economic activity.

Idea for Impact: Relying on intuition for sound decision-making isn’t sustainable, so folks need a systematic approach to making those decisions. Use meaningful proxy and surrogate metrics in your decisions to help overcome inherent biases with what can’t be measured.

Why Groups Cheat: Complicity and Collusion

July 2, 2022 By Nagesh Belludi Leave a Comment

News broke out that Ernst & Young revealed this week that its employees cheated on ethics exams. The accounting behemoth is being fined $100 million. That’s one of the biggest fines ever levied against an audit firm.

It’s absurd that specialists responsible for keeping things straight and steering moral enterprise cheated on ethics exams! Ernst & Young’s leadership evidently disregarded the internal reports about the cheating. Perhaps because when people identify so strongly with a group, they’re much more swayed to view the group’s actions positively and accept that group’s norms.

Research by Vanderbilt University’s Jessica Kennedy and colleagues suggests that high-flying people are sometimes more inclined than low-ranking people to adopt what their group recommends, even when it represents an ethics breach. Power sometimes provokes people to so strongly want to identify with their group that they’re willing to overlook when the group’s collective actions cross an ethical line. This affinity is, therefore, urged to sustain transgression instead of stopping its spread, especially when the odds of being caught and punished are slim.

The Best Advice Tony Blair Ever Got: Finding the Time to Think Strategically

June 28, 2022 By Nagesh Belludi Leave a Comment

Former British Prime Minister Tony Blair reminisced, at a 2012 event at the Stanford Graduate School of Business, how easy it is to get so absorbed by the pressures of doing that you rarely ever disentangle yourself from the chock-full of activities and the clutter that can choke strategic thinking.

As the leader of the Opposition, when I went to see him in 1996 at the White House, he explained that one of the hardest things when you get into the government is finding the time to think strategically. It’s being able to create the space so that you’re focused on what you really know counts because otherwise, he said, the system will take you over. You’ll be in meetings from 8:00 in the morning till 10:00 at night, and you think you’re immensely busy, but the tactics and the strategy have all got mixed.

What happens in leadership is that things come at you the whole time. If you’re not careful, you’ll spend your time dealing with one situation after another. You lose your strategic grip on what’ll determine if you’re a successful government. Many of these crises are real, and you must deal with them. But when you judge your government in history, no one will remember any of them. You’ve got to create the space to be thinking strategically all the time to change the world.

Idea for Impact: It’s your strategic thinking, more than any other single activity, that can influence what you’ll achieve as a leader. Find ways to create more “head time” amid the busyness.

Book Summary: Jack Welch, ‘The’ Man Who Broke Capitalism?

June 23, 2022 By Nagesh Belludi Leave a Comment

The Man Who Broke Capitalism (2022) by New York Times columnist David Gelles contends that the pernicious greed spawned by former General Electric CEO Jack Welch is exceptionally responsible for exposing the structural failings of capitalism in recent decades.

The danger inherent in any ideology grows stronger when it starts to thrive because it swiftly morphs into temptation—a voracious appetite for ever better “returns” in the present case. Welch was indeed the most visible catalyst and a much-imitated champion of brutal capitalism. But Gelles’s narrative draws his book’s lengthy subtitle (“How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America”) excessively, thrusting ad nauseam the well-founded thesis against Welch’s ploys and “the personification of American, alpha-male capitalism.” See my previous articles (here, here, and here) about how the faults of Welch’s strategy become evident many years after his retirement.

Gelles does an agreeable job of outlining the socioeconomic paradigm that has made modern western capitalism’s shortcomings ever more apparent. Starting with influential economist Milton Friedman’s decree in the ’70s that the one and only social responsibility of a business is to maximize profits, Gelles explains the revering of Welch’s “downsizing, deal-making, and financialization” strategy. Without balance, it provided short-term benefits for shareholders, but the long-term well-being of corporations and society lost out. A sense of restraint is most pertinent to the power of capitalism.

Capitalism isn’t irretrievably bound to fail, as Gelles rightly argues, but it needs to be rethought. It’s morally incumbent upon the social order to inhibit the embedded incentives that create powerful tendencies towards short-termism. Gelles offers no more realistic, objective insights than the familiar solutions prescribed by our career politicians.

Overall, Gelles’s pro-Fabian polemic falls short of a fair-minded assessment of the epoch’s economic forces. Indeed, many of Welch’s tactics were timely and necessary, but he pushed them farther and longer. Too, Gelles fails to study counterexamples of many corporate leaders who’ve thoughtfully copied Welch’s playbook and helped their businesses and communities prosper, not least because they were restrained enough to avoid Welchism’s blowbacks.

Recommendation: Speed Read The Man Who Broke Capitalism for a necessary reappraisal of the legacy of Jack Welch. There isn’t much eye-opening here, but author Gelles affords a relevant parable about the power of restraint and the time- and context-validity of ideas.

A Quick Way to Build Your Confidence Right Now

June 20, 2022 By Nagesh Belludi Leave a Comment

Guilt, anxiety, and fear usually manifest as a creeping mindset of what’s lacking. You feel you’re not enough, and you don’t have the resources you need to achieve your goals.

Lack of confidence will probably hold you back more than you may acknowledge. Be mindful of your thoughts and address these negative thinking patterns. Notice how you speak to yourself—harping only on what isn’t enough of or what isn’t working doesn’t instill your self-assuredness.

When you spiral about what is lacking, try the Abundance Mentality—it empowers you to believe in your extant ability. You can make do with what you have and overcome any difficulties. This isn’t some naïve “can do” temperament, but it’s an earnest endeavor to muster hope and agency instead of doubt and helplessness.

Idea for Impact: The less you do, the less confident you’ll feel.

Don’t wait until you feel more confident—often, more ruminating leads to analysis paralysis. Self-confidence comes from successful experiences, and to create these successful experiences, take action.

Take a low-risk action to increase your confidence. Assume you’re the most confident self you’ve ever been and do what that self would do. Prioritize your choices and direct your resources to pressing needs, ignoring other goals.

Beware of Too Much Information

May 25, 2022 By Nagesh Belludi Leave a Comment

Nearly all decision-making models emphasize the need for much information about the situation and options before making a decision.

Information is worthwhile, no doubt, but information can sometimes be less factual or less precise than it may seem. Besides, too much information may distract you from important issues. Scouting for additional data may cloud the picture rather than arm you with crucial information.

Idea for Impact: Be wary of the usefulness and truth-value of the information you have amassed. The solution to being overwhelmed by too much irrelevant information is selecting relevant information—not merely less information.

Bear in mind that there’s always room for new ideas and new perspectives. Review and challenge your current comprehension of the problem you’re confronting. Don’t be afraid to refine your understanding and explore other possibilities.

Look Back at This Time Last Year

May 20, 2022 By Nagesh Belludi Leave a Comment

Each week, review the prior year’s calendar, logbook, or journal for the same week to see what you were doing. What projects were you working on, and with whom were you interacting?

This habit not only gives you a perspective on how things turned out for you but also reminds you to reconnect with people.

What was most important in your life then? What “would I, could I, should I” decisions were you facing then? Have some of your anticipated troubles never come to pass? What were your most memorable moments? Has much of your worrying been eventually fruitless? What elements of life have you overlooked, and what could you restart or reprioritize now?

Idea for Impact: As you look back, reflect on how every experience, even a negative one, is merely a little step on the path. In the end, life turns out to be okay.

Deliver The Punchline First

May 12, 2022 By Nagesh Belludi Leave a Comment

When Sergey Brin and Larry Page set about to secure early funding for Google, they initiated a presentation at Sequoia Capital, one of the world’s premier venture capital firms, with the logline “Google organizes the world’s information and makes it universally accessible.”

Most busy executives don’t want to sit through a 50-slide presentation. They don’t have the patience to wait for the punchline.

Begin with the conclusion and then go through the rest of your slide deck: your proposals, theses, assumptions, your line of thinking, and the arguments, pro and con.

Meaning, Then Details

Cognitive psychologists have argued that the brain pays more attention to the core of an idea than to its details.

According to the University of Washington molecular biologist John Medina, the human brain craves meaning before details. In Brain Rules (2014,) Medina notes, “Normally, if we don’t know the gist–the meaning–of information, we are unlikely to pay attention to its details. The brain selects meaning-laden information for further processing and leaves the rest alone.”

When listeners comprehend the overarching idea of a pitch, they’ll find it easier to synthesize and digest the information.

Begin Your Next Executive Presentation with the Final Summary Slide First

Most executives have limited willpower and suffer “decision fatigue.” Don’t overload them with less-important details before asking them to decide in your favor. Your “executive summary” slide may be the only one that will get full attention. So make it perfect!

Practice, practice, practice. Few people, if any, have the rhetorical ability to make a persuasive 15-second speech about their significant ideas. The best speakers are the best because they rehearse and get feedback.
Less is more. After getting prized facetime with executives, many talented young professionals produce large slide decks to dazzle the executives with their intelligence and ingenuity. Don’t.
Simplify your “executive summary” message. Perceptive executives tend to be somewhat skeptical of things that ought to be simple but have become too complicated.
Meaning, then detail. The brain processes meaning before detail, and the brain likes hierarchy. Start with the general idea and then present information in a structured, hierarchical approach. Make sure that each detail you communicate traces back to the core concept of your presentation.

Idea for Impact: Get to the Point

Tell busy people what they need to know upfront. Communicate like a newsperson: What’s the number one thing your audience needs to know? Say that first. Then build out from there, keeping the most essential particulars up top.

There’s another smart—if devious—benefit of putting the cart before the horse: delivering your “punchline” first can hook your audience with a compelling proposal first, and then cash in on the confirmation bias to sway them to your case.

Spy thriller novelist Graeme Shimmin offers this excellent guide to writing a killer punchline, logline, or elevator speech.

« Previous Page

Mental Models

Wondering what to read next?

Wondering what to read next?

Wondering what to read next?

Wondering what to read next?

Wondering what to read next?

Wondering what to read next?

Idea for Impact: The less you do, the less confident you’ll feel.

Wondering what to read next?

Wondering what to read next?

Wondering what to read next?

Meaning, Then Details

Begin Your Next Executive Presentation with the Final Summary Slide First

Idea for Impact: Get to the Point

Wondering what to read next?