Search Results for: people skills

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.

Inspirational Quotations #775

February 10, 2019 By Nagesh Belludi

Man can will nothing unless he has first understood that he must count on no one but himself; that he is alone, abandoned on earth in the midst of his infinite responsibilities, without help, with no other aim than the one he sets himself, with no other destiny than the one he forges for himself on this earth.
—Jean-Paul Sartre (French Philosopher)

Rely on the ordinary virtues that intelligent, balanced human beings have relied on for centuries: common sense, thrift, realistic expectations, patience, and perseverance.
—John C. Bogle (American Mutual Fund Pioneer)

Men are more apt to be mistaken in their generalizations than in their particular observations.
—Niccolo Machiavelli (Florentine Political Philosopher)

Most of us follow our conscience as we follow a wheelbarrow. We push it in front of us in the direction we want to go.
—Billy Graham (American Baptist Religious Leader)

Most people don’t know why they’re doing what they’re doing. They imitate others, go with the flow, and follow paths without making their own. They spend decades in pursuit of something that someone convinced them they should want, without realizing that it won’t make them happy. Don’t.
—Derek Sivers (American Entrepreneur)

I’m not into the money thing. You can only sleep in one bed at a time. You can only eat one meal at a time, or be in one car at a time. So I don’t have to have millions of dollars to be happy. All I need are clothes on my back, a decent meal, and a little loving when I feel like it. That’s the bottom line.
—Ray Charles (American Singer)

Man is the roof and crown of creation. He may be tossed about by uncertain storms of life, but the solution to it lies in his own efforts in finding an ideal, and then raising his personality, from the level of petty emotions, to the loftier heights of the chosen ideal.
—Swami Chinmayananda (Indian Hindu Teacher)

Managers have traditionally developed the skills in finance, planning, marketing and production techniques. Too often the relationships with their people have been assigned a secondary role. This is too important a subject not to receive first line attention.
—William Hewlett (American Engineer, Businessperson)

Our careers aren’t paths so much as landscapes that are navigated. We’re free agents, entrepreneurs, intrapreneurs—each with our own unique brand.
—Keith Ferrazzi (American Author)

Anything will give up its secrets if you love it enough. Not only have I found that when I talk to the little flower or to the little peanut they will give up their secrets, but I have found that when I silently commune with people they give up their secrets also—if you love them enough.
—George Washington Carver (American Scientist)

You gain strength, courage, and confidence by every experience in which you really stop to look fear in the face. You must do the thing which you think you cannot do.
—Eleanor Roosevelt (American First Lady)

The greatest honor history can bestow is that of peacemaker.
—Richard Nixon (American Head of State)

Don’t Use Personality Assessments to Sort the Talented from the Less Talented

October 25, 2018 By Nagesh Belludi Leave a Comment

Personality assessments have featured in personality development and career counseling for almost a century. Myers-Briggs Type Indicator (MBTI) and other tests form the basis for helping people deal with conflict, understand team interplay, outline career search, sharpen decision-making skills, and cope with stress.

Personality Assessments Cannot Predict Performance

Even as their use has grown significantly over the last two decades, personality assessments—including strengths inventories, and emotional intelligence assessments—have been criticized at length:

An individual’s personality cannot be summed up by a personality assessment. Individuality is described best by continuous (not discrete), normally-distributed attributes. For example, the MBTI Step I classification of individuals into 16 categories (or 4 dichotomies from Carl Jung‘s book Psychological Types (1921)) does not encapsulate the full range of personality variance.
An individual’s behavior cannot be limited to one side of a dichotomy. For instance, every person can be outgoing and assertive in the external world (extraversion,) while requiring time for some contemplation (introversion).
Many academic studies question the tests’ predictive validity and poor reliability. Moreover, personality assessments have poor test-retest consistency. Test takers have been shown to change at least one dichotomy when they take the MBTI Step I survey a second time.
Personality assessments can initiate confirmation bias (“Barnum Effect”)—the test scores are self-fulfilling because people tend to behave in ways that are predicted for them. In other words, a person who learns that he or she is “outgoing” according to MBTI may behave that way.
Personality tests are decidedly fakeable, especially when used to evaluate future career opportunities. All personality assessments are contingent on a degree of honesty, but MBTI test-takers are often motivated to match up to extraverted, sensing, thinking, and judging (ESTJ) proclivities in the modern organization.
Assessments are regularly offered as universally applicable. Not only do they tend to mirror the biases of the test developers, but also they are skewed in preference of the social groups the developer studied.

Personality Assessments are Starting Points for Change, Not a Predictor of the Outcome

Academics have long acknowledged the previously mentioned criticisms of personality assessments. They’ve argued fruitfully that many of the criticisms should be directed to how HR practitioners understand personality tests and use them in the development arena.

MBTI and many other personality assessments were never intended to sort the talented from the less talented. They are designed for the individual who takes the assessment, and not for the HR practitioner. In other words, personality assessments were designed to help individuals discover their underlying preferences regarding learning styles, problem-solving styles, self-awareness, ethical inclinations, emotional intelligence, and stress management.

Intended for Increasing Self-awareness, Not Appraisal

On the contrary, HR practitioners tend to interpret test scores speciously to gauge behavior, rather than as pointers of categorical preferences. Besides, HR practitioners often fail to factor in the test-takers’ past and current environmental influences.

And then there’s the risk of people being pigeonholed or pushed into a particular course regardless of his or her preferences. HR practitioners and career counsellors who put too much emphasis on personality assessments may compartmentalize people into rigid categories. This flies in the face of a central tenet of the MBTI premise—that individuals could choose to act against their preferred type if the occasion demands it. People’s attitudes and behaviors often change over time because of emotional experiences or socialization into specific work and social cultures.

Idea for Impact: Use Personality Assessments to Facilitate Self-Awareness, Not for Categorization or as Predictors of Achievement

If you’re a manager or a HR practitioner, don’t use personality assessments to categorize people or as predictors of achievement. Encourage people to take personality tests, but help them interpret these pieces of data about themselves—only they could make sense of test results in the context of their life history, social environment, and ambitions for career and life.

How to Buy a Small Business // Book Summary of Richard Ruback’s HBR Guide

June 26, 2018 By Nagesh Belludi Leave a Comment

Beyond the capital markets and startups, I’ve been exploring buying a suitable small business to invest in and operate. To inform myself with the process of searching and valuing privately-held establishments, I recently perused Richard Ruback and Royce Yudkoff’s resourceful HBR Guide to Buying a Small Business: Think Big, Buy Small, Own Your Own Company (2017.)

The authors of this HBR Guide teach a popular Harvard Business School class on “acquisition entrepreneurship.” Their curriculum trains self-employment-inclined MBA students to search, negotiate, and buy an established business and become an entrepreneur-CEO within a year or two.

According to the authors, MBA students are drawn to their class by the prospect of a meaningful leadership responsibility earlier in their careers, as opposed to slowly climbing the corporate ladder or taking on the great risk of starting a company from scratch and establishing a viable business model.

The first section of the HBR Guide to Buying a Small Business can help you decide if entrepreneurship is a good match to your temperament, lifestyle, work-experience, and career ambitions. The largest part of the book provides a comprehensive roadmap for all aspects of acquiring a business—bankrolling the search process, deal-sourcing, managing risk, organizing equity- and debt-financing, running due diligence processes, structuring the purchase, and closing the deal. The final section of the book discusses changing the leadership over and transitioning into operating management.

Reflection: Is Acquisition Entrepreneurship Right for You?

Self-employment is not for everyone. Entrepreneurs need to be smart, driven, business-savvy, self-motivated, strategic, resilient, persuasive, and be able to deal with uncertainty.
On top of the challenges of self-employment, acquiring and operating a small-business will require reaching out, projecting self-confidence, and persuading people you don’t know—business brokers, financiers, investors, regulators, sellers, employees, and customers.
During your exploration of what business to buy, you’ll have to quickly learn about unfamiliar industries, markets, and companies. As a leader, you must be able to develop cross-functional expertise quickly.

Searching: A Full-time Job in Itself

Plan to commit full-time for six months to two years to raise funds from financiers, identify and vet potential acquisition targets, and negotiate with sellers on a realistic purchase price. Afterward, plan for no less than three more months to perform due diligence and complete the transaction.
“When you are seeking out a business to buy, you might face months when you work 12 hours a day and simply not find a desirable prospect. It’s a frustrating experience with lots of effort and no reward.”
Arrange for debt and equity financing from potential backers and risk-sharing partners. Contact affluent folks in your network and investors who specialize in small-businesses. The networks of people you bring together to help your mission can also lend a hand during the deal making and the due diligence processes.
To find potential businesses to buy, try reaching out directly to businesses whose owners may be inclined to sell. Engage small business brokers (there’re some 3,000 small business brokers and intermediaries in North America,) or comb through databases of small businesses for sale.
For potential sellers, look for business owners who, after building their firms over the decades, are approaching retirement and don’t have an inheritor interested in running the business. Many aging business owners are determined to ensure that their businesses live on.

Seek Enduringly Profitable Businesses: Recurring Customers and Predictable Revenue

Look for “enduringly profitable businesses”—stable, slow-growth companies in dull-and-boring industries (such as sandblasting, equipment maintenance, industrial repair and overhaul, window-cleaning, service-providers) in small, defensible niche markets.
Seek businesses whose business-to-business customers are unlikely to switch vendors because the product or service their customers buy isn’t a big part of the costs of their business. Consequently, they’re not motivated to shop around for lower-cost vendors and squeeze margins.
Focus on businesses with yearly revenues of $5 million to $15 million and cash flows of $750,000 to $3 million.
Avoid promising start-ups and risky turnaround opportunities; “it is tempting to imagine buying a troubled business or one with uneven performance, because the purchase price would be very low. But we strongly advise against it, because you’ll have to reinvent the business model and doing so is a very difficult and risky endeavor. Instead, buy a profitable business with an established model for success—one that is profitable year after year.”
Avoid high-growth businesses because “high growth means that your new customers will quickly outnumber your existing ones. Because new customers bring new demands, there are many ways to get in trouble. New customers are, well, new; they have no loyalty to the company and no history. High growth requires great management effort. It also absorbs money rapidly, and raising that money puts a strain on the business and its owner. A rapidly growing firm also attracts competitors, which see the expanding market and the opportunity to attract new customers. So, in a high-growth business, you could work hard and still fail if you cannot keep pace with your competitors. And even if your business survives, you might find that competition has forced you to sell at low prices, so you enjoy little financial reward after all. Making this all the harder, the seller will demand a much higher price for a business that has the potential to grow quickly.”
Avoid technology-driven companies (they face shifting customer needs and therefore demand constant reinvention,) cyclical business, and businesses with well-established competitors.
Small business-owners usually don’t hire large consulting firms or investment banks to sell their businesses. Their businesses are too small to appeal to private equity firms. “We think it makes sense to buy a business with between $750,000 and $2.0 million in annual pretax profits. … At the upper end of our size range—$2 million or more in profitability—we find that institutional investors, like smaller private-equity firms, start to become interested and that competition raises the purchase price, reducing the financial benefits of owning the business.”
“EBITDA margin (EBITDA/revenue) ≥ 20% for services and manufacturing or 15% for distribution and wholesale”

A Checklist for Enduringly Profitable Businesses

Initial Filters:

Is the prospect consistently profitable?

Is it an established business instead of a startup or turnaround?

Is it in the right size range?

Is it located in a place you are willing to live?

Do you have the skills to manage it?

Does it fit your lifestyle?

Deeper Filters:

Is the prospect enduringly profitable?

Is the owner serious about selling the business?

Valuing the Company and Negotiating a Deal

Use the company’s past financial information to project future earnings and your return on investment. Then decide on how much you should pay for a small business: “You’ll need to base the offer price on the general range of 3x–5x EBITDA.” Adjust the multiple for profit margins and growth prospects.
Run a primary due diligence—“a focused period of rapid learning in preparation for making an offer. This is when you’ll test the seller’s initial claims and verify the information that has made the business appealing to you. … You’re looking for any reason that you might not want to acquire this business.”
Finance using equity and debt. “Visit banks and approach your investor network to raise money for the acquisition. You should be prepared to provide information about the business and its industry, details on the due diligence that you’ve done, your financial projections, and the deal terms that you are proposing.”
Once your offer has been accepted after negotiations, run a confirmatory due diligence “in which the company’s records will be fully open to you. You will typically have around 90 days to work with your accountant and attorney to check for any inconsistencies and red flags. … This can be an extremely nerve-racking time for both the buyer and the seller, so it’s important to be patient and calm.”

Transitioning into Leadership and Emphasizing Business-as-Usual

As part of the negotiated deal, try to get the seller to stick around for 3 to 6 months to help you in the transition.
“After closing the sale, you should focus on four tasks: introducing yourself to all your managers and employees, meeting with external stakeholders, communicating the transition plan to everyone, and taking control of your cash flow.”
“The most common trouble for small firms under new owners is running out of cash. … So set up a process whereby you approve all payments before they go out, and review your accounts-receivable balances at least weekly. You should also implement a 90-day rolling cash-flow forecast.”
Meet with all the constituencies and reassure them that they won’t see any immediate changes. Lay emphasis on “your overarching goals for the company—for example, excellent customer service, commitment to quality, a satisfying work environment—and encourage people to stay focused on their work.”
Visit every major customer as soon as you can. Keep your ears open for ideas to improve your product- and service-offerings.
Don’t make any big changes early on, get to know the business, and be very respectful of all the constituents—they know more about the business than you do.

Recommendation: Read ‘HBR Guide to Buying a Small Business’ for a Very Good Introduction on How to Buy and Organize Finance for a Business

Richard Ruback and Royce Yudkoff’s HBR Guide to Buying a Small Business is excellent manual for prospective entrepreneurs, employees of small businesses, financiers, and value-seeking investors. You will also become acquainted about interactions with bankers, brokers, sellers, accountants, and attorneys you meet while searching for a business to buy.

We’re All Trying to Control Others

June 19, 2018 By Nagesh Belludi Leave a Comment

We're All Trying to Control Others

One of the realities of the human condition is that we’re all operating our lives by trying to make the settings around us—the environments in which we live, work, and play—to be just the way we want them to be.

However, we share these settings with other people, who themselves are trying to make their settings just the way they want them to be.

And herein is the source of a great many conflicts: as we control our worlds and our lives with the purpose of making them transpire as we’d like them to, we intercede with the controlling of others.

Conflict is not necessarily bad. It is a normal, fundamental, and pervasive facet of life. It is a natural outcome of what happens when our expectations, interests, viewpoints, inclinations, and opinions are at variance with those of others.

Every relationship is a minefield of conflict, and each instance of contradictory viewpoints brings new challenges.

The key to getting along amicably and resolving the problems of the world is working out how we can wisely facilitate our control of what is important to us without interfering with other people’s efforts at doing the same thing.

Idea for Impact: Life is negotiation. Getting what you want out of life is all about getting what you want from—and with—other people. Learning how to engage in conflict to get what you want without inflicting damage on the opportunities and the relationships is one of life’s essential and practical skills.

Writing Clearly and Concisely

February 13, 2018 By Nagesh Belludi Leave a Comment

In my judgment, most books should be booklets, most booklets essays, most essays articles, most articles paragraphs, and most paragraphs should be statements.

It is far more important to write well than most folks realize. Writing not only communicates ideas, it also generates them—in the minds of both the author and the reader.

Effective Writing is a Lifelong Pursuit

One of my 2018 goals is to peruse two classic texts on writing clearly and concisely: William Strunk and E.B. White’s The Elements of Style (1918) and William Zinsser’s On Writing Well: The Classic Guide to Writing Nonfiction (1980.)

Strunk and White affirm that brevity is the essence of good writing in these three sentences:

Vigorous writing is concise. A sentence should contain no unnecessary words, a paragraph no unnecessary sentences, for the same reason that a drawing should have no unnecessary lines and a machine no unnecessary parts. This requires not that the writer make all his sentences short, or that he avoid all detail and treat his subjects only in outline, but that every word tell.

Succinctness, simplicity, and humanity are also dominant objectives in William Zinsser’s On Writing Well.

Look for the clutter in your writing and prune it ruthlessly. Be grateful for everything you can throw away. Re-examine each sentence you put on paper. Is every word doing new work? Can any thought be expressed with more economy? Is anything pompous or pretentious or faddish? Are you hanging on to something useless just because you think it’s beautiful? Simplify, simplify.

On Writing Well is a celebrated guide to concise, unmistakable, and well-crafted writing. The book has sold several million copies worldwide, and is a required reading at many a university course.

Good writing doesn’t come naturally, though most people seem to think it does … Writing is hard work. A clear sentence is no accident. Very few sentences come out right the first time, or even the third time. Remember this in moments of despair. If you find that writing is hard, it’s because it is hard.

Zinsser’s central premise is that good writing is the result of hard work, not inborn talent. The book’s particular strength is in Zinsser’s selection of paragraphs by great writers, and his instruction on how to learn from those writers: “Writing is learned by imitation. If anyone asked me how I learned to write, I’d say I learned by reading the men and women who were doing the kind of writing I wanted to do and trying to figure out how they did it.”

On Writing Well is a must-read for anyone who writes and desires to his or her prose. Read Derek Sivers’ helpful synopsis of the book.

Ideas to Use When Delegating

January 24, 2018 By Nagesh Belludi Leave a Comment

The American industrialist Alfred P. Sloan once declared, “The most important thing I ever learned about management is that the work must be done by other men.”

A manager’s principal task is to get things done through other people. Therefore, delegation is one of the most important skills a manager can master.

In addition, being effective at delegation has benefits in many areas of life—enlisting a friend to repair a computer, or getting your kids to rearrange a bookshelf, for example.

Here are a few ideas for effective delegation.

Delegate every task that can be performed just as well by someone who is paid less than you are.
Pick people who can accept responsibility.
Match the person to the task.
Remember that the person performing the task may not do it as well as you do it.
Build employees’ confidence by assigning low-risk projects at first. By giving employees tasks that are right at the limit of their existing capability, or even just beyond, you can motivate them to develop their skills and knowledge.
Let employees put their own spin on the assignment. Learn to have faith in the ingenuity of your employees, and give much latitude in how they do things.
Delegate outcomes, not just tasks. Identify the precise problem and define exactly what you want your employee to do.
Confirm understanding. Don’t assume that your employee understands what we mean. Have the employee restate the outcome you’ve delegated in his own words.
Give a due date for the assignment.
Monitor what you delegate. Don’t meddle—an overly-engaged boss can create self-induced commotion. Effective managers delegate results when they can and interfere only when they must.
Learn to be patient. Expect employees to make wrong decisions. Spend time with them to learn why a decision was wrong and how to avoid it the next time, rather than reproach or assign blame.
Set the standards, but tell your employees what you’re willing to accept as tradeoffs of delegation. Offer to lend a hand wherever necessary. As Peter Drucker wrote in The Leader of the Future, “Effective leaders delegate, but they do not delegate the one thing that will set the standards. They do it.“

By learning to delegate effectively, you can create a work environment that is more time- and skills-efficient, foster creativity and opportunities for professional growth, and focus on the importance of managerial communication.

Seven Easy Ways to Motivate Employees and Increase Productivity

January 10, 2018 By Nagesh Belludi Leave a Comment

If you’re a manager, you can become a motivator by inspiring your employees to high performance—and produce beyond the ordinary.

Purpose. Even the mundane can become meaningful in a larger context. Howard Schultz, the founder and CEO of Starbucks once said about providing propose, “People want to be part of something larger than themselves. They want to be part of something they’re really proud of, that they’ll fight for, sacrifice for, that they trust.” Sometimes that’s all people need to get their skates on—because nothing is worse than feeling that they’re are stuck doing a meaningless task.
Autonomy. Empower people to innovate and make decisions. Be clear about performance expectations. Reduce your direct supervision of their work. Don’t micromanage.
Appreciation. Reward your employees’ small as well as big successes. Recognition is easy and need not be expensive and time-consuming.
Involvement. Interact directly with frontline employees, observe their work, solicit their opinions, seek ideas for improvement, and work directly with the frontline to identify and resolve problems. Encourage employees to talk about the “undiscussable,” even if others don’t want to hear it.
Challenge. Put people in situations where they can grow, learn new skills, and gain new knowledge.
Urgency. Disregard command-and-control and, instead, become an expediter and facilitate your employees getting their job done. The pioneering management guru Peter Drucker encouraged managers to frequently ask of employees the one question that can initiate more improvement than any other: “What do I do that wastes your time without contributing to your effectiveness?”
Empathy. Care about your employees’ success and give them hope about their performance. Be sincere. Demonstrate you value differing opinions.

Idea for Impact: The bottom line on motivation is this: People know what motivates them. Ask them. You may not have any idea what they want.

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.

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 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.”

How to Prevent a Communications Breakdown During Crisis

November 13, 2017 By Nagesh Belludi Leave a Comment

The ultimate test of a leader’s and an organization’s communication skills is how they deal with a crisis—natural disasters, crisis of confidence, acts of malevolence, strategic errors, acts of deception, management misconduct, and so forth.

It’s not difficult to see why communication is an important element of crisis management: leaders today have to tackle media that is unsympathetic to what it regards as management incompetence, shareholders and customers who are ever more demanding, legislation and regulation that is getting stricter, and competitors eager to pinch customers during times of distress.

Effective crisis communications must be able to have a consistent and clear message and present this message swiftly and regularly following a crisis.

Here are seven elements of effective crisis communication.

Strategic Thinking: Think purposefully about what you want your constituencies (employees, stockholders, customers, suppliers, communities, the media) to know under the given circumstances. Many a routine problem has transformed into a crisis because too many people were told too much and the situation became exaggerated and out of control.

What happened
Who is responsible
Why did it happen
Who is affected
What should be done
Whom can we trust
What should we say
Who should say it
How should we say it

Openness: When a crisis befalls, be prepared to talk about it internally and externally as assertively as you respond to the crisis operationally. Understand the expectations of your constituencies and go beyond what is expected or required. If you are not communicative enough, people may make erroneous assumptions about the crisis. Bad news can travel fast and sell best.
Candor: If your constituencies should know about a crisis that your organization is experiencing, talk about it as quickly and as completely as you can, especially to those most directly affected.
Concern: Keep the people most directly affected by the crisis updated until the crisis is completely resolved. Do not brand a whistle blower a troublemaker.
Sensitivity: At the earliest possible moment, step back and analyze the impact of the crisis. Inform and alert all the constituencies that are affected. Demonstrate concern, compassion, sympathy, remorse, or contrition, whatever the case may require.
Integrity: If you are responsible for the crisis or perceived as such, acknowledge the situation promptly. Be true to your corporate and personal conscience. Share the crisis action plan and seek inputs.
Honesty: Learn from your mistakes and talk openly about what you’ve learned. Demonstrate your commitment to keeping errors and problems from resurfacing.

Idea for Impact: Reputation and goodwill represent a great part of business value. Protect yourself when faced with attacks on your reputation and competence. If you do not communicate effectively and frequently with your constituents, somebody else will. In the absence of information, your constituents can develop their own perceptions of the problem and its implications.

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