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Right Attitudes

Ideas for Impact

Doesn’t Facebook Make You Unhappy?

June 5, 2019 By Nagesh Belludi 1 Comment

If rampant trust and privacy issues, unrestricted tracking and misuse of your personal data, the superficiality of online relationships, and the perils of group polarization haven’t persuaded you yet to quit social media, consider the risks of “Facebook envy.” The pretenses of perfection on social media can make you compare your own life to an ideal that doesn’t really exist.

The Age of Envy: Seeing Your Friends Happy Can Make You Sad

Study after study confirms that Facebook and other social media contribute to unhappiness and feelings of inadequacy by providing a glimpse of just the highlights reel of other people’s lives.

When posting on Facebook, many people present their very best takes on their lives—their filtered descriptions tend to make their lives look more exciting. Everyone else’s vacations seem more fun, their relationships happier, and their jobs more exciting than your daily grind. Incidentally, they look younger, well dressed, and in-shape than you do too.

The Embellishment of Truths Makes Others Feel Discontented by Comparison

Catching up with others on social media can indeed make you feel jealous and envious. It’s in human nature that comparisons to lives that appear better than yours can bring you down. As the 18th century French philosopher Montesquieu wrote, “If one only wished to be happy, this could be horrible for the rest of civilization; but we wish to be happier than other people, and this is always difficult, for we believe others to be happier than they are.”

The obsession with self-image and the shallowness of friendships can stimulate your competitive inclinations to cherry-pick and portray an even sunnier facade of your lives.

The Never-ending One-upmanship on Facebook

Facebook is an outlet for the self-publicizing, narcissist human tendency—it is about creating positive impressions, often with the purpose of either enchanting or annoying others. And “where jealousy and selfish ambition exist, there is disorder and every evil thing” (New Testament, James 3:16.)

Social media have created this annoying compulsion to preserve a coherent and cheerful, public persona at all times. Your life must look picture-perfect, even if, under the wraps, you’re dealing with the burdens of everyday life. Moreover, given the urge to build this deceptive identity on social media, there’s little room for pessimism or honest portrayal of life’s realities.

Studies even detail how social media are contributing factors to cultivating feelings of inadequacy, depression, and other mental health issues in teenagers.

Idea for Impact: You Don’t Need Social Media to Participate in Society

Being on social media is a utility, a conduit—not an end in itself.

If you find yourself wasting time on social media or getting demotivated, consider using Facebook less or quitting it totally. Shun the narcissistic inclination to publicize the excruciating minutiae of your life.

Go engage flesh and blood people. Don’t just be interesting—be interested! You’ll be happier.

Wondering what to read next?

  1. The Curse of Teamwork: Groupthink
  2. Keep Politics and Religion Out of the Office
  3. How to Stimulate Group Creativity // Book Summary of Edward de Bono’s ‘Six Thinking Hats’
  4. Group Polarization: Like-Mindedness is Dangerous, Especially with Social Media
  5. The Pros and Cons of Leading by Consensus: Compromise and Accountability

Filed Under: Managing People Tagged With: Conversations, Networking, Social Dynamics, Teams

Inspirational Quotations #791

June 2, 2019 By Nagesh Belludi

The beautiful thing about learning is nobody can take it away from you.
—B. B. King (American Blues Musician)

A valiant mind no deadly danger fears.
—Edward de Vere, 17th Earl of Oxford (English Poet, Courtier)

If you can give your son or daughter only one gift, let it be enthusiasm.
—Bruce Fairchild Barton (American Advertising Executive)

You can’t pick cherries with your back to the tree.
—J. P. Morgan (American Financier, Philanthropist)

If you threw a stone into a gutter, it would only spurt filth in your face.
—R. K. Narayan (Indian Novelist, Short-story Writer)

The greatest enemy of a good plan is the dream of a perfect plan. Stick to the good plan.
—John C. Bogle (American Mutual Fund Pioneer)

Even if death were to fall upon you today like lightning, you must be ready to die without sadness and regret, without any residue of clinging for what is left behind. Remaining in the recognition of the absolute view, you should leave this life like an eagle soaring up into the blue sky.
—Dilgo Khyentse Rinpoche (Tibetan Buddhist Religious Leader)

Today’s accomplishments were yesterday’s impossibilities.
—Robert H. Schuller (American Televangelist, Author)

Good wood is better than good paint.
—Vietnamese Proverb

It is easy to hate and it is difficult to love. This is how the whole scheme of things works. All good things are difficult to achieve; and bad things are very easy to get.
—Morarji Desai (Indian Political Leader )

Beginnings are usually scary and endings are usually sad, but it’s the middle that counts. You have to remember this when you find yourself at the beginning.
—Sandra Bullock (American Film Actress)

The person who seeks all their applause from outside has their happiness in another’s keeping .
—Dale Carnegie (American Self-Help Author)

It doesn’t matter how many say it cannot be done or how many people have tried it before; it’s important to realize that whatever you’re doing, it’s your first attempt at it.
—Wally Amos (American Entrepreneur)

We become more religious in proportion to our readiness to doubt and not our willingness to believe.
—Sarvepalli Radhakrishnan (Indian Philosopher, Political Leader)

It is the things we are unaware of in ourselves which make us so very angry when we see them in other people.
—Irene Claremont de Castillejo (British Psychoanalyst)

At a time when opportunism is everything, when hope seems lost, when everything boils down to a cynical business deal, we must find the courage to dream. To reclaim romance. The romance of believing in justice, in freedom, and in dignity. For everybody.
—Arundhati Roy (Indian Novelist, Activist)

It costs a man only a little exertion to bring misfortune on himself.
—Menander (Greek Comic Dramatist)

An archaeologist is the best husband a woman can have. The older she gets the more interested he is in her.
—Agatha Christie (British Novelist)

Filed Under: Inspirational Quotations

Stop Searching for the Best Productivity System

May 29, 2019 By Nagesh Belludi 1 Comment

One of the reasons many people are not as productive as they want to be is not because they haven’t found the right ideas that can help them take charge of their lives.

They can’t be productive because they keep looking for “better” ideas instead of settling on a “good enough” idea and then putting it into rigorous practice.

Looking for the Best Can Be Counterproductive

This is comparable to weight-loss programs. People buy more and more books on dieting, but don’t lose weight by merely buying diet books. It’s easier to buy books than it is to go on a diet. Recognizing that most diet plans boil down to basic strategies—eat more fruits and veggies, keep portions under control, and stay physically active—and implementing these simple ideas purposely could be as effective a diet program as any out there.

Look, no productivity tool can fit all your requirements. The inadequacies of any productivity system you try out will drive you towards looking for a different tool. But this quest to define the best never ends.

Idea for Impact: Never underestimate the power of a simple idea that is well executed.

If you can identify a simple system and implement its key principles with discipline, you may not need the “best” system.

As Charlie Munger has stated in describing the simplicity of Warren Buffett’s philosophy at Berkshire Hathaway, “Our ideas are so simple that people keep asking us for mysteries when all we have are the most elementary ideas.”

Wondering what to read next?

  1. The Simple Life, The Good Life // Book Summary of Greg McKeown’s ‘Essentialism’
  2. Did School Turn You Into a Procrastinator?
  3. Don’t Ruminate Endlessly
  4. Do Things Fast
  5. Everything in Life Has an Opportunity Cost

Filed Under: Mental Models, Sharpening Your Skills Tagged With: Decision-Making, Discipline, Perfectionism, Productivity, Time Management

Inspirational Quotations #790

May 26, 2019 By Nagesh Belludi

A bishop wrote gravely to the Times inviting all nations to destroy ‘the formula’ of the atomic bomb. There is no simple remedy for ignorance so abysmal.
—Peter Medawar (British Immunologist, Writer)

When you get to my age, and I’m 66 now, you realize that the world is a madhouse and that most people are operating in fantasy anyway. So once you realize that, it doesn’t bother you much.
—John Cleese (British Comic Actor, Writer)

Values are principles and ideas that bring meaning to the seemingly mundane experience of life. A meaningful life that ultimately brings happiness and pride requires you to respond to temptations as well as challenges with honor, dignity, and courage.
—Laura Schlessinger (American Broadcaster)

Habit is necessary; it is the habit of having habits, of turning a trail into a rut, that must be incessantly fought against if one is to remain alive.
—Edith Wharton (American Novelist, Short-story Writer)

Our dreams have to be bigger.
Our ambitions higher.
Our commitment deeper.
And our efforts greater.
This is my dream.
—Dhirubhai Ambani (Indian Businessperson)

In recognizing the humanity of our fellow beings, we pay ourselves the highest tribute.
—Thurgood Marshall (American Jurist)

With every word we utter, with every action we take, we know our kids are watching us. We as parents are their most important role models.
—Michelle Obama (American First Lady)

Rage and grief are savage companions, but despair is the final undoing.
—Mia Farrow (American Actress, Activist)

I cannot and do not live in the world of discretion, not as a writer, anyway. I would prefer to, I assure you—it would make life easier. But discretion is, unfortunately, not for novelists.
—Philip Roth (American Novelist, Short-story Writer)

Prayer is translation. A man translates himself into a child asking for all there is in a language he has barely mastered.
—Leonard Cohen (Canadian Musician, Author)

The consumer is not a moron. She is your wife. Try not to insult her intelligence.
—David Ogilvy (British Advertising Executive)

Some men are more beholden to their bitterest enemies than to friends who appear to be sweetness itself. The former frequently tell the truth, but the latter never.
—Cato the Elder (Marcus Porcius Cato) (Roman Statesman)

When a man points a finger at someone else, he should remember that four of his fingers are pointing to himself.
—Louis Nizer (American Lawyer, Author)

To sin because mercy abounds is the devil’s logic; he that sins because of God’s mercy, shall have judgment without mercy.—Mercy is not for them that sin and fear not, but for them that fear and sin not.
—Thomas J. Watson, Sr. (American Business Executive)

The wisdom of the wise and the experience of ages may be preserved by quotation.
—Isaac D’Israeli (English Writer, Scholar)

Filed Under: Inspirational Quotations

Charlie Munger’s Iron Prescription

May 22, 2019 By Nagesh Belludi Leave a Comment

Intellectual inquiry is effortful, and you need a durable internal push to engage in it.

An inflexible approach impedes critical-thinking. I’ve discussed previously (here, here, here, and here) that a sophisticated critical-thinker considers alternative world-views that may cause him/her to philosophize differently.

For example, if you cling rigidly to a “raise taxes on the wealthiest people” position, you are possibly unwilling to contemplate that, among other problems, higher taxes disincentivize productivity, promote economic behaviors to dodge taxes, and contribute to class warfare. Examining all sensible inferences and considering a variety of possible viewpoints or perspectives may help you to arrive at more moderate, practical positions that are conceivably within acceptable limits.

Charlie Munger’s Iron Prescription: Avoid Intense Ideology

One of the central wisdoms of Charlie Munger, Berkshire Hathaway’s Vice-Chairman and the distinguished beacon of multi-disciplinary thinking, is to keep an eye open for dangers that accompany in submitting to a particular ideology.

At his celebrated commencement address to the graduates of the University of Southern California Law School on May 13, 2007, Munger affirmed,

In my mind, I got a little example I use whenever I think about ideology and it’s these Scandinavian canoeists who succeeded in taming all the rapids of Scandinavia and they thought they would tackle the whirlpools in the Aaron Rapids here in the United States. The death rate was 100 percent. A big whirlpool is not something you want to go into and I think the same is true about a really deep ideology.

I have what I call an “iron prescription” that helps me keep sane when I naturally drift toward preferring one ideology over another. And that is I say, “I’m not entitled to have an opinion on this subject unless I can state the arguments against my position better than the people do who are supporting it.” I think only when I reach that stage am I qualified to speak.

…

This business of not drifting into extreme ideology is a very very important thing in life if you want to have more correct knowledge and be wiser than other people. A heavy ideology is very likely to do you in.

In the era of social media and group polarization, it’s easy to slip into confirmation bias by committing yourself to a self-imposed ideology.

As I’ve mentioned previously, studies have shown that associating with likeminded folks can make you even more disdainful of contradictory viewpoints. Nothing will ruin you faster than an ideology burrowing deeper in a closed mind.

Idea for Impact: Nothing deceives you as much as extreme passion

Stay away from intense ideologies until you’ve examined the opposing viewpoint. Don’t ignore the counterevidence. Consider the other side of any thought as carefully as your own.

Postscript: Munger’s other iron prescription concerns avoiding the victim mentality: “Whenever you think that some situation or some person is ruining your life, it is actually you who are ruining your life… Feeling like a victim is perfectly disastrous way to go through life. If you just take the attitude that however bad it is in any way, it’s always your fault and you just fix it as best you can—the so called iron prescription—I think that really works.” See my previous article on Charlie Munger and lessons on adversity.

Wondering what to read next?

  1. To Know Is to Contradict: The Power of Nuanced Thinking
  2. The Abilene Paradox: Just ‘Cause Everyone Agrees Doesn’t Mean They Do
  3. One of the Tests of Leadership is the Ability to Sniff out a Fire Quickly
  4. How to Gain Empathic Insight during a Conflict
  5. Presenting Facts Can Sometimes Backfire

Filed Under: Mental Models, Sharpening Your Skills Tagged With: Attitudes, Conflict, Conversations, Critical Thinking, Mental Models, Persuasion, Social Dynamics, Thinking Tools, Thought Process

Inspirational Quotations #789

May 19, 2019 By Nagesh Belludi

Love is not just looking at each other, it’s looking in the same direction.
—Antoine de Saint-Exupery (French Novelist, Aviator)

Memory is the greatest of artists, and effaces from your mind what is unnecessary.
—Maurice Baring (British Author)

I hold this as a rule of life: Too much of anything is bad.
—Terence (Roman Comic Dramatist)

All sorrows can be borne if you put them into a story or tell a story about them.
—Karen Blixen (Isak Dinesen) (Danish Novelist, Short-story Writer)

Remember that what pulls the strings is the force hidden within; there lies the power to persuade, there the life—there, if one must speak out, the real man.
—Marcus Aurelius (Emperor of Rome, Stoic Philosopher)

Be moderate in prosperity, prudent in adversity.
—Periander (Tyrant of Corinth)

Independence I have long considered as the grand blessing of life, the basis of every virtue; and independence I will ever secure by contracting my wants, though I were to live on a barren heath.
—Mary Wollstonecraft (English Writer, Feminist)

Whenever there is a simple error that most laymen fall for, there is always a slightly more sophisticated version of the same problem that experts fall for.
—Amos Tversky (Israeli Cognitive Psychologist)

Success is falling nine times and getting up ten.
—Jon Bon Jovi (American Musician)

Choose the course which you adopt with deliberation; but when you have adopted it, then persevere in it with firmness.
—Bias of Priene (Greek Orator)

Horror is always aware of its cause; terror never is. That is precisely what makes terror terrifying.
—Christopher Isherwood (Anglo-American Novelist, Playwright)

The birds have vanished into the sky, and now the last cloud drains away. We sit together, the mountain and me, until only the mountain remains.
—Li Bai (Chinese Taoist Poet)

Watch people, because you can fake for a long time, but one day you’re gonna show yourself to be a phony.
—Tupac Shakur (American Rapper, Actor)

If you don’t like the road you’re walking, start paving another one.
—Dolly Parton (American Musician, Actress)

Well-being is attained by little and little, and nevertheless is no little thing itself.
—Zeno of Citium (Greek Philosopher)

The liberals have not softened their view of actuality to make themselves live closer to the dream, but instead sharpen their perceptions and fight to make the dream actuality or give up the battle in despair.
—Margaret Mead (American Cultural Anthropologist)

Few of us are granted the grace to know ourselves, and until we do, maybe the best we can do is be consistent.
—Andre Agassi (American Tennis Player)

There is in gardens a plant which one ought to leave dry, although most people water it. It is the weed called envy.
—Cosimo de’ Medici (Florentine Statesman, Banker)

As she has planted, so does she harvest; such is the field of karma.
—The Guru Granth Sahib (Sacred Text of Sikhism)

Filed Under: Inspirational Quotations

Inspirational Quotations #788

May 12, 2019 By Nagesh Belludi

Do not let one’s tongue outrun one’s sense.
—Chilon of Sparta (Spartan Magistrate)

The chief value of money lies in the fact that one lives in a world in which it is overestimated.
—H. L. Mencken (American Journalist, Literary Critic)

Frank and explicit; that is the right line to take when you wish to conceal your own mind and to confuse the minds of others.
—Benjamin Disraeli (British Head of State)

In argument similes are like songs in love; they describe much, but prove nothing.
—Matthew Prior (English Poet, Diplomat)

Education is not merely a means for earning a living or an instrument for the acquisition of wealth. It is an initiation into life of spirit, a training of the human soul in the pursuit of truth and the practice of virtue.
—Vijaya Lakshmi Pandit (Indian Politician, Diplomat)

The devil tempts all men, but idle men tempt the devil.
—Arabic Proverb

Sometimes you are in sync with the times, sometimes you are in advance, sometimes you are late.
—Bernardo Bertolucci (Italian Film Director)

When you take a flower in your hand and really look at it, it’s your world for the moment. I want to give that world to someone else. Most people in the city rush around so, they have no time to look at a flower. I want them to see it whether they want to or not.
—Georgia O’Keeffe (American Painter)

We are obliged to serve God both outwardly and inwardly. Outward service is expressed in the duties of the members, such as prayer, fasting, almsgiving, learning and teaching the Torah…all of which can be wholly performed by man’s physical body. Inward service, however, is expressed in the duties of the heart, in the heart’s assertion of the unity of God, in belief in him and in his Book, in constant obedience to him and fear of him, in humility before him, love for him and complete reliance upon him, submission to him and abstinence from the things hateful to him.
—Bahya ibn Paquda (Jewish Philosopher)

When you say “no” to most things, you leave room in your life to throw yourself completely into that rare thing that makes you say “HELL YEAH!”
—Derek Sivers (American Entrepreneur)

Real art is one of the most powerful forces in the rise of mankind, and he who renders it accessible to as many people as possible is a benefactor of humanity.
—Zoltan Kodaly (Hungarian Composer)

When there is an original sound in the world, it makes a hundred echoes.
—John Augustus Shedd (American Author)

Success is not measured by the heights one attains, but by the obstacles one overcomes in its attainment.
—Booker T. Washington (African-American Educationist)

As you pray to God for devotion, so also pray that you may not find fault with anyone.
—Ramakrishna Paramahamsa (Indian Hindu Philosopher)

Filed Under: Inspirational Quotations

Inspirational Quotations #787

May 5, 2019 By Nagesh Belludi

For the creation of a masterwork of literature two powers must concur, the power of the man and the power of the moment, and the man is not enough without the moment.
—Matthew Arnold (English Poet, Critic)

Guru the washer man, disciple is the cloth
The name of God liken to the soap
Wash the mind on foundation firm
To realize the glow of Truth.
—Kabir (Indian Mystic)

When I am finishing a picture I hold some God-made object up to it—a rock, a flower, the branch of a tree or my hand—as a kind of final test. If the painting stands up beside a thing man cannot make, the painting is authentic. If there’s a clash between the two, it is bad art.
—Marc Chagall (French Painter, Graphic Artist)

Nothing ages like laziness.
—Edward Bulwer-Lytton, 1st Baron Lytton (British Author, Politician)

When there is oppression, the only self-respecting thing is to rise and say this shall cease today, because my right is justice. If you are stronger, you have to help the weaker boy or girl both in play and in the work.
—Sarojini Naidu (Indian Feminist, Poet)

A belief is not true because it is useful.
—Henri Frederic Amiel (Swiss Philosopher, Writer)

But all art is sensual and poetry particularly so. It is directly, that is, of the senses, and since the senses do not exist without an object for their employment all art is necessarily objective. It doesn’t declaim or explain, it presents.
—William Carlos Williams (American Poet, Novelist, Cultural Historian)

Travel changes you. As you move through this life and this world you change things slightly, you leave marks behind, however small. And in return, life—and travel—leaves marks on you. Most of the time, those marks—on your body or on your heart—are beautiful. Often, though, they hurt.
—Anthony Bourdain (American Chef, TV Personality)

The great question which, in all ages, has disturbed mankind, and brought on them the greatest part of those mischiefs, which have ruined cities, depopulated countries, and disordered the peace of the world, has been, not whether there be power in the world, not whence it came, but who should have it.
—John Locke (English Philosopher)

I have always tried to hide my efforts and wished my works to have a light joyousness of springtime which never lets anyone suspect the labors it has cost me.
—Henri Matisse (French Painter, Sculptor)

It is important to view knowledge as sort of a semantic tree—make sure you understand the fundamental principles, i.e. the trunk and big branches, before you get into the leaves/details or there is nothing for them to hang on to.
—Elon Musk (American Entrepreneur )

‘Tis the privilege of friendship to talk nonsense, and have her nonsense respected.
—Charles Lamb (British Essayist, Poet)

Filed Under: Inspirational Quotations

Inspirational Quotations #786

April 28, 2019 By Nagesh Belludi

Silence is argument carried on by other means.
—Che Guevara (Argentine-Cuban Revolutionary)

I do not think that there is any other quality so essential to success of any kind as the quality of perseverance. It overcomes almost everything, even nature.
—John D. Rockefeller (American Industrialist, Philanthropist)

Old age is like a plane flying through a storm. Once you’re aboard, there’s nothing you can do. You can’t stop the plane, you can’t stop the storm, you can’t stop time. So one might as well accept it calmly, wisely.
—Golda Meir (Israeli Head of State)

Music creates order out of chaos: for rhythm imposes unanimity upon the divergent, melody imposes continuity upon the disjointed, and harmony imposes compatibility upon the incongruous.
—Yehudi Menuhin (British Violinist)

The quality of one’s emotional life changes over the years, doesn’t it? But the basic instincts and desires, greed and hope, seem to remain constant. In the larger scope of things, there’s a sense of fulfillment to living a creative life. So I guess that’s what keeps me going.
—Tommy Lee Jones (American Actor)

Revolution is not something fixed in ideology, nor is it something fashioned to a particular decade. It is a perpetual process embedded in the human spirit.
—Abbie Hoffman (American Political Activist)

We’re flooding people with information. We need to feed it through a processor. A human must turn information into intelligence or knowledge. We’ve tended to forget that no computer will ever ask a new question.
—Grace Hopper (American Mathematician)

I leave this rule for others when I’m dead: Be always sure you’re right—THEN GO AHEAD!
—Davy Crockett (American Frontiersman, Politician)

I’ve dreamt in my life dreams that have stayed with me ever after, and changed my ideas; they’ve gone through and through me, like wine through water, and altered the color of my mind.
—Emily Bronte (English Novelist, Poet)

Man is fond of counting his troubles, but he does not count his joys. If he counted them up as he ought to, he would see that every lot has enough happiness provided for it.
—Fyodor Dostoyevsky (Russian Novelist)

The most regretful people on earth are those who felt the call to creative work, who felt their own creative power restive and uprising, and gave to it neither power nor time.
—Mary Oliver (American Poet)

Poets are like proverbs: you can always find one to contradict another.
—Jules Verne (French Novelist)

For mankind, speech with a capital S is especially meaningful and committing, more than the content communicated. The outcry of the newborn and the sound of the bells are fraught with mystery more than the baby’s woeful face or the venerable tower.
—Paul Goodman (American Novelist, Essayist)

Filed Under: Inspirational Quotations

3G Capital and the Fringes of Cost Management // Summary of Bob Fifer’s ‘How to Double Your Profits in 6 Months or Less’

April 24, 2019 By Nagesh Belludi Leave a Comment

3G Capital’s Playbook: Look at EVERYTHING—There are No Sacred Cows in Cost-Cutting

Brazilian private equity firm 3G Capital's Playbook for Cost-Cutting: Zero-based Budgeting During the past decade, the achievements of the Brazil-based private equity group 3G Capital have drawn attention to the aggressive cost cutting methods outlined in management consultant Bob Fifer’s How to Double Your Profits in 6 Months or Less (1995.)

3G has raised the profitability of its acquired businesses by sacking thousands of workers, shutting down factories, simplifying operations—even using cheaper ingredients. In Israel, the 3G-controlled Heinz was forced to rebrand its iconic ketchup as “tomato seasoning” after a cost cutting-inspired shift to GMO-derived constituents. 3G’s playbook, however, encourages increasing budgets for strategically important business functions—for instance, Kraft Heinz has increasingly expanded spending on advertising and product improvement.

At every 3G-run company—Anheuser-Busch InBev, SABMiller, Heinz, Kraft Foods, Burger King, Tim Hortons, Popeyes,—the “zero-based budgeting” accounting tool forces managers to justify all claims on their organizations’ financial resources. As I noted in a previous article, this method forces managers to justify every line item on a team’s budget as if it were new a claim for an entirely new project, instead of merely being carried over from the prior year:

Zero-base budgeting advocates say that it detects inflated budgets and unearths cost savings by focusing on priorities rather than simply relying on the precedent. Managers secure a tighter focus on operations by justifying each line-item in their budgets, thereby reducing the money they allocate to the lowest level possible. Managers can also contrast competing claims on their ever-scarce financial resources and therefore shift funds to more impactful projects.

How to Double Your Profits has become a must-read for all managers affected by any 3G deal. This obscure book, purportedly written in just 15 hours, was also a favorite of such business luminaries as Sanford Weill (of Citigroup,) Bob Lipp (Travelers Insurance,) and Jack Welch (General Electric.)

3G’s methods have upended an entire industry known for characteristically lower profit margins. The specter of being acquired by 3G has forced Unilever, General Mills, J.M. Smucker, Nestle, Pilgrim’s Pride, Phillip Morris, and other consumer staples companies to implement sweeping cost cutting programs.

Every Expense is Evaluated to Be Cutback Unless It Contributes Directly to the Bottom Line

'Double your profits' by Robert M Fifer (ISBN 0963688804) How to Double Your Profits 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’s a strategic function. When it comes to marketing, for example, the author recommends outspending the competition in both good and bad times.

Seventy-eight brief chapters (“steps”) deal with every possible drain on time, money, and people in the modern corporation: reducing layers of management, cutting the amount of time managers spend in meetings, shrinking corporate expense accounts, eliminating first-class air tickets, getting rid of pointless reports, and so on.

  • Focus on profits. “We’re here to make a profit. In fact, we’re here to make as much profit as we possibly can. Profit is the most accurate, most all-encompassing measure of whether we truly are the best. … Profits benefit all of us … when the profits slow down, we all suffer.”
  • Run a true meritocracy. Set expectations about how performance will be measured and what rewards will accrue to what levels of performance. “Within any level or group of employees, there must be wide disparities in salary, tied to demonstrable differences in performance and contribution to the bottom line.”
  • Avoid paralysis by analysis, make decisions faster. “Superb managers are instinctual, making the right decision most of the time based on limited data. The quantification that less-skilled managers insist upon is in fact illusory: They wind up making decisions based upon that which can be quantified rather than that which is important. Most of the critical variables in any business decision can only be judged and evaluated based on experience and instinct, not quantified.”

Much of the advice is effective, if predictable, but some suggestions are clearly crooked:

  • Step 24 / Declare Freezes and Cuts: “Send a letter declaring an across-the board 3% reduction to suppliers. Make sure the letter is from someone high up and intimidating….(after getting the bill) deduct 3% from the bill and say, ‘Didn’t you read my CEO’s letter? Are you trying to get me fired? “
  • Step 37 / Accounts Payable: “Never pay a bill until the supplier asks for it at least twice. You’ll be surprised: A few suppliers will take as much as two years before they finally get around to asking for their money.”

But Then Again, There is only so Much Fat to Cut out: The Crisis at Kraft Heinz

When discharged without due forethought, elements of Fifer’s cost-cutting mindset could lead to corporate myopia and an utter disregard for such intangible assets as human capital, brand value, and corporate philanthropy.

Certainly, in businesses with substantial cost inefficiencies and bloat, cost-cutting can produce considerable gains in profits, but even with these firms, gains will be time-limited, because there is only so much fat to cut out.

Cost Cutting and The Crisis at Kraft Heinz Aggressive cost-cutting has been blamed for the recent travails at Kraft Heinz. Over the last three years, Kraft Heinz’s fading return on invested capital and decreasing sales point toward a leadership team that has been giving precedence to near-term cash flows to the detriment of its long-term competitive position (“moat.”)

With the expansion of cut-price private-label brands, consumers are no longer remaining devoted to brands like they once did. Kraft Heinz’s roster of products is less appealing to customers than it used to be, and cost cutting hasn’t helped—Kraft Heinz has invested just 2%–3% of its sales on brand spending, as against 7%–9% at comparable consumer goods companies.

Recommendation: Fast Read ‘How to Double Your Profits’

Bob Fifer’s How to Double Your Profits in 6 Months or Less, even if out-of-date and brash in style, could help drive systematic cost-consciousness in large firms that have bloated cost structures in the hypercompetitive business environments.

Entrepreneurs, managers, and employees will find in How to Double Your Profits many ideas for establishing a culture where every employee feels liable for adding value to the organization’s bottom line. The key takeaway lessons are:

  • Determine which costs are strategic (costs that bring in business and improve the bottom line) and over-invest in those processes as long as they are effective, i.e. producing better results. “Place the burden of proof on justifying costs, not on eliminating them.”
  • Avoid over-quantifying and over-analyzing processes and results, particularly when the extra precision will not have any bearing on business decision-making.
  • Consider business processes as a means to an end—a focus on business results should trump a focus on business processes. In other words, focus single-mindedly on business results.

Complement with Francisco Souza Homem de Mello’s The 3G Way (2014) and Cristiane Correa’s Dream Big (2014)—informative books on 3G written by Brazilian business journalists who’ve covered 3G and its founders over the years. Warren Buffett, who regularly teams up with 3G Capital, recommends these books.

Wondering what to read next?

  1. The Inopportune Case of the Airbus A340 Aircraft: When Tomorrow Left Yesterday Behind
  2. Learning from Amazon: Getting Your House in Order
  3. Founders Struggle to Lead Growing Companies
  4. Beware of Key-Person Dependency Risk
  5. Your Product May Be Excellent, But Is There A Market For It?

Filed Under: Leading Teams, Managing Business Functions, Managing People, MBA in a Nutshell, Mental Models Tagged With: Budgeting, Discipline, Efficiency, Entrepreneurs, Leadership Lessons

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About: Nagesh Belludi [hire] is a St. Petersburg, Florida-based freethinker, investor, and leadership coach. He specializes in helping executives and companies ensure that the overall quality of their decision-making benefits isn’t compromised by a lack of a big-picture understanding.

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