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Quotes – It’s Lonely At The Top

Most captains have trouble with their ship’s people from time to time – on occasion it is a continual sullen covert war – and unless they make cronies of their first lieutenants, as some do, they have to chew it over alone. I do not wonder that so many of them grow strange or bloody-minded; or run melancholy mad, for that matter.

~Capt. Jack Aubrey, Patrick O’Brian

Review – Leader Effectiveness Training

Leader Effectiveness Training

by Dr. Thomas Gordon, published 1977, 2001


I find this book to be interesting as a potential “handbook of general management practices” and as such, I made extensive notes throughout the text as I read. There are many sections of the book that I copied in whole into my notes. My plan for this review, unlike other reviews focused on pithiness and synthesizing my impressions into a summary, is to keep more of these notes and direct transcriptions from the book in tact so that I have a good resource in the future.

What is leadership effectiveness?

How to influence people without using power is the key to leader effectiveness.

A revolution has started– a human relations revolution of great significance. People want to be treated with respect and with dignity; people are demanding to have a strong voice in their own working lives; people are less willing to be coerced and exploited; people want the right to achieve self-respect in their work and have work that is meaningful and rewarding; people are rebelling against inhuman working environments in very human ways — by jobhopping, absenteeism, apathetic attitudes, antagonism and malicious mischief.

While workplace regulation and government interference don’t help the capitalist or manager in this regard, the shift in workplace expectations is cultural and -psycho-intellectual-progressive (not political-progressive!) and gone are the days, real or imagined, of early industrialism in this country in which the business had all the power and could dictate, like a “captain” how would would be performed or else. Today, the dignity of the organization’s members is paramount to leadership effectiveness and great managers both a.) leave their associates feeling heard and understood and b.) offer them agreeable reasons to do the company’s work that serve their own self-interests.

Seems simple enough, so why does workplace and managerial conflict persist?

People come naturally to these built-in patterns of negative responses; they learned them when they were children. The leader inherits each group member’s “inner child of the past.”


Because group members at first perceive most leaders as probable controllers and dominators, that’s the way they will respond to her, even though the leader may have no intention of using power and authority.

It is vogue to ask of people to “leave your personal problems at home.” But this proves naive because it is the same person having problems at home who comes to work– there is no way to cleave one’s personality into two halves, work and personal. Further, people wish to believe that personality dynamics are mysterious or pertain only to events and developments occurring in the present, adult life. However, just as it is the same person at work and at home, it is also the same person who is an adult now but was a child in the past! A manager need not become people’s personal therapists, but they do need to understand that many of the negative, “childish” behaviors they witness in workplace conflict are in fact a result of unmet childhood needs and failed coping strategies developed in childhood adversity and trauma.

Being the leader doesn’t make you one, because leaders don’t automatically get the respect and acceptance of their group members; so in order to earn the leadership of their group and have a positive influence on the group members, leaders must learn some specific skills and methods.

How leaders acquire followers

There is a set of principles rooted in human evolutionary biology and the logic of economic scarcity that informs social organization development and leadership roles therein:

  1. Every individual is engaged in a struggle to survive by meeting needs and relieving tensions
  2. Means are necessary to survival
  3. Most means are acquired through relationships with other people; therefore people and the groups they form become the means of survival
  4. People seek out relationships in which others are seen as the means of survival
  5. People join groups with the goal of satisfying their needs and ensuring their own survival
  6. People follow a leader and permit them to direct their activities whom they believe will help them get what they need and want to survive

Organizational needs are primarily for increased productivity and efficiency, while the group members needs are sometimes those that motivate them to resist pressure for increased production and efficiency.

An effective leader cannot be only a “human relations specialist” nor only a “productivity specialist”, they must be both.

A job must provide opportunity for growth, responsibility, recognition and advancement if it is to be satisfying; it is not enough to simply remove dissatisfying items from a job.

Expecting people to show up for work just to earn a paycheck is not enough. People also want a sense of personal satisfaction and meaning from doing work they consider important and doing it well.

The principle function of a group leader is to facilitate problem-solving; in somewhat different times, it is to maximize productive work time and achieve mutual need satisfaction.

Effective leaders must behave in such a way that they come to be perceived almost as another group member; at the same time they must help all group members feel as free as the leader to make contributions and perform needed functions in the group.

Group members draw away from leaders who make them feel inadequate or lower their self-esteem.

When leaders achieve this “another member” status, they actually increase the contributions they can make to the group, because their ideas will get evaluated like those of other members.

An effective group leader, then, does not need to solve problems, but to see to it that they get solved.

A 6-step process for effective problem solving

  1. Identifying and defining the problem
  2. Generating alternative solutions
  3. Evaluating alternative solutions
  4. Decision-making
  5. Implementing the decision
  6. Following up to evaluate the solution

Observant leaders can use “signaling behavior” to become alert to the existence of a problem:

  • being unusually uncommunicative
  • sulking
  • avoiding you
  • excessive absenteeism
  • being unusually irritable
  • not smiling as much as usual
  • daydreaming
  • tardiness
  • looking downcast or depressed
  • being sarcastic
  • walking slower (or faster)
  • slouching in their chairs

Once alert to a problem, a leader can follow the problem-solving process to resolve it and thus allow the team member to return to their productive functioning within their organizational role.

As a rule, people don’t get down to the real problem until after they have first ventilated a feeling or sent some opening message.

It has not been an evolutionarily-successful social strategy for human beings to be directly confrontational. As a result, most people learn in childhood to show they are hurt or have a problem without specifying what it is upfront. This necessitates the leader engaging in an exploratory process to help the person with the problem feel comfortable revealing what their problem actually is.

The “helpee” usually will not move into the problem-solving process unless the listener sends an invitation– opens the door for the helpee:

  • “Would you like to talk about it?”
  • “Can I be of any help with this problem?”
  • “I’d be interested to hear how you feel.”
  • “Would it help to talk about it?”

Active Listening as a tool for building trust and leader engagement

Active Listening involves establishing equilibrium between the expression of the person needing help and the impression being received by the one trying to help them. Frequent and continuous feedback of the results of the receiver’s decoding is what “Active Listening” is all about. Listeners need only restate, in their own language, their impression of the expression of the sender. It’s a check: is my impression acceptable to the sender?

At least two ingredients are necessary in any relationship of one person fostering growth and psychological health in another– empathy and acceptance. Empathy is the capacity to put oneself in the shoes of the others and understand their “personal world of meaning.” Acceptance is feeling good about what a person is doing.

The 12 Roadblocks to Communication

There are 12 common roadblocks to effective, empathetic communication between leaders and followers and almost every leader makes the mistake of running into one of these roadblocks at some time or other in the course of carrying out their leadership duties.

  1. Ordering, Directing, Commanding
  2. Warning, Admonishing, Threatening
  3. Moralizing, Preaching, Imploring
  4. Advising, Giving Suggestions or Solutions
  5. Persuading with Logic, Lecturing, Arguing
  6. Judging, Criticizing, Disagreeing, Blaming
  7. Praising, Agreeing, Evaluating Positively, Buttering Up
  8. Name-calling, Ridiculing, Shaming
  9. Interpreting, Analyzing, Diagnosing
  10. Reassuring, Sympathizing, Consoling, Supporting
  11. Probing, Questioning, Interrogating
  12. Distracting, Diverting, Kidding

What makes these roadblocks ineffective tools of communication?

Implicit in these 12 categories of listener responses is the desire or intent to change rather than accept the sender, acting as vehicles for communicating unacceptance. A climate of unacceptance is very unconducive to personal growth, development and psychological health.

Listening helps keep the responsibility for problem-solving with the member. The 12 Roadblocks tend to grab responsibility away from the owner of the problem and deposit it in the hands of the leader.

Part of demonstrating acceptance is being willing to hear the WHOLE person, not just the part of the person we enjoy being around or working with. Feelings, even negative feelings, are part of everyone’s total reality and existence and will be a necessary part of an effective leader’s daily experience.

Contrary to the “feelings don’t belong here” belief, there is evidence that expressing feelings actually increases a group’s effectiveness and productivity. Openness in expressing feelings serves very much the same function for a group as pain does for one’s organism.

Leaders should treat feelings as “friendly”, not dangerous. Feelings should be welcomed because they are cues and clues that some problem exists.

Negative feelings can be quite transitory. People purposely select strong negative feelings as codes to communicate “I want to make sure I get your full attention” or “I want you to know how bad you’ve made me feel.”

However, don’t confuse the simple expression of a negative emotion as the start and end point of the problem to be explored. Sometimes people don’t know what the real reason is for their discomfort and need help finding it, and other times they just aren’t comfortable saying what it is.

People’s problems are like onions– they come in layers.

This is not unlike a child’s temper tantrum, and, as parents know full well, the best strategy is to wait for the feelings to dissipate.

Leaders do a lot of teaching– giving instructions, explaining new policies or procedures, doing on-the-job training. Yet very few leaders have received special training to carry out this important function.

Little or no learning is going to occur until you acknowledge the team member’s feelings and help him work through them somehow. Your teaching has to stop until you get evidence that he is again ready to learn. This is the most important principle of effective teaching. Just as you can’t be a leader without followers, you can’t be a teacher without learners.

Getting learners more actively involved and participating in the learning process is the mark of an effective teacher.

It’s also naive to believe that problems can simply be ignored or avoided.

The price unassertive leaders pay is that the problems rarely go away; they suffer in silent martyrdom or build up feelings of resentment toward the person causing the problem.

The difference between “I-Messages” and “You-Messages”

You-Messages carry a high risk of damaging relationships because:

  • they make people feel guilty
  • they may be felt as blame, put-downs, criticism or rejection
  • they may communicate a lack of respect for the other person
  • they often cause reactive or retaliatory behavior
  • they may be damaging to the recipient’s self-esteem
  • they can produce resistance, rather than openness, to change
  • they may make a person feel hurt and later, resentful
  • they are often felt as punitive

People are seldom aware their behavior is unacceptable to another. Their behavior is usually motivated only by a desire to meet their own needs, not by a deliberate intent to interfere with the needs of others. When you send a You-Message, you communicate “You are bad for doing something to meet your needs.”

I-Messages are less confrontational because they represent a plea for help from one person to the other. Most people are willing to be of service to others when asked for their help.

The Three Components of a Complete I-Message:

  1. a brief, non-blameful description of the behavior you find unacceptable
  2. your honest feelings
  3. the tangible and concrete effect of the behavior on you (the consequences)


When people resist changing, it is generally useless to keep hammering at them with subsequent I-Messages; what is called for at such times is a quick shift to Active Listening.

The “diagnostic model” is the fashionable management belief that a leader’s job is to figure out what kind of person each of their team members is and then to speak “their language.”

The assumption implicit in the diagnostic model is that it is the leader who assumes responsibility for producing changes in the group members, and the more leaders know about their team, the cleverer they will be in selecting methods for changing them. This is ultimately a method of manipulation.

This is the “language of control” versus the “language of influence” in the confrontive model, where the leader cares more about knowing how people feel than why they feel that way.

With the confrontive model, leaders need only understand their own feelings and how to communicate them in a nonblameful way; then they need to put listening skills to work so they and their group members can work out mutually acceptable solutions. This is simpler than trying to “figure people out” to manipulate them into doing what you want done.

The role of meetings for effective leaders

There are two kinds of meetings, each with a distinct purpose: informational and problem-solving.

Informational meetings are for such purposes as personal growth, continuing education, keeping informed about what other group members are doing (including the leader). Should problems arise, they should be put on the agenda for the next Problem-Solving Meeting. Problem-Solving meetings have 6 types, following the six step process for problem-solving outlined above.

An organization without many problems is one that is not growing, changing, adapting. Expect problems, and embrace them as vehicles to making organizational progress!

Leadership effectiveness requires regularly scheduled meetings for problem-solving and decision-making with your management team. “Show me an ineffective organization or group and I’ll give you a leader who either does not have management meetings at all or who conducts them poorly.”

Guidelines for effective management team meetings:

  1. Frequency of meetings; it is important to meet at the same time, day and place on a regularly scheduled basis, with or without the leader
  2. Duration of meetings; meetings should start and end at rigidly enforced times, and include a break if meeting for longer than two hours; it is better to have multiple meetings than one that is too long
  3. Priority of meetings; ideally the meeting should have priority over other organizational responsibilities and people should be prepared to be fully present during the meeting
  4. Alternates for members; if a member can not attend, he can designate an alternate with authority to act on his behalf
  5. Place of meeting; conference rooms with sufficient privacy, quiet, seating and comfort are preferable to offsite lunches or dinners
  6. Physical arrangements; white boards, chart pads and other note-taking instruments should be present, members should be seated and have tables for writing on and refreshments for relaxing; the meeting leader should not necessarily sit at the head of the table
  7. The recording function; the leader should not be the recorder as they must be free to perform other functions; the recorder can be a designated person or a rotating responsibility; the recorder should capture decisions, plans for dealing with unresolved problems, problems emerging from the discussion to be placed on future agendas, task assignments and follow-up actions; a brief formula is a statement of the problem and who is to do what by when; meeting notes should be distributed to attendees after the meeting
  8. Developing the Agenda; the group should own its own agenda, not the leader; the agenda can be collected and formed before the meeting or at the beginning; discussion should wait until the agenda is complete
  9. Establishing priorities for the agenda; the most critical items should be discussed first
  10. Rules for speaking; effective groups usually function informally; the leader can be most helpful not in setting rules, but in ensuring each attendee has a chance to provide input
  11. Kinds of problems appropriate for the group; typically appropriate problems are those which require data from the group to solve, and whose solutions require the group members to implement or which effect the members of the group
  12. Kinds of problems inappropriate for meetings; never use group time to solve problems affecting only some of the members, that are too unimportant for that level of the group, that require study and preliminary data gathering (without conducting this first), or that are outside the authority of the group
  13. Rules for decision-making; ideally, all members of the group should agree on the solution and the problem should be discussed until all members are able to voluntarily buy in; voting should only be used to help the group understand which direction members are leaning, not to settle upon the solution and make a decision; when time does not permit further discussion, decision-making can be delegated to one, two or three members acting as a subgroup
  14. Confidentiality of Group Meetings; the procedures of the group should be kept in confidence to encourage open sharing, and only the decisions of the group should be shared publicly, not how they were arrived at
  15. Disposition of Agenda Items; every agenda item should be disposed of by reaching a solution, delegating the problem for further study outside the group, delegating the problem to an individual or subgroup for a recommendation, being placed on the agenda of a future meeting, taking the problem off the agenda by the person submitting it, or having the problem redefined in new terms; no problem should be left hanging
  16. Record of the Meeting; notes should be distributed promptly and cover all decisions made by the group, the disposition of all agenda items and all task assignments with due dates including WHO does WHAT by WHEN
  17. Procedures for Continual Evaluation of Group Effectiveness; the group can improve the functioning of its meetings by periodically reflecting upon itself and evaluating its own performance by written or oral evaluation and feedback

Some leaders pride themselves on having a problem-free workplace. They ask and expect people to “forgive and forget” or, worse, to not bring up problems in the first place. They pay a heavy price for this attitude of enforced ignorance.

The absence of conflict may be symptomatic of an organization or group that is not functioning effectively– not growing, changing, adapting, improving or creatively meeting new challenges. The number of conflicts in groups (including families) is not at all indicative of how “healthy” they are. The true index is whether the conflicts get resolved and by what method they get resolved.

I have heard executives proudly describe their groups or organizations: “We’re just a big happy family around here– we get along, no problems.” I am always suspicious of such leaders, as I am suspicious of husbands and wives who say, “We’ve been married for twenty years and we’ve never had a fight.” Usually that means that their conflicts are not allowed to surface and be faced.

Beware also of team members who avoid bringing up conflicts in order to earn rewards and avoid punishment.

In relationships with leaders who rely heavily on reward and punishment, group members selectively send messages that they think will only bring rewards, avoiding messages that might invite punishment.

These leaders, too, believe they are operating without problems or conflict, but are usually unpleasantly surprised to learn something major has simply been hidden from them out of view!

It gets a lot of mocking treatment amongst pundits and the entertainment industry, but it’s nonetheless worth reiterating the The No-Lose Method of Conflict Resolution: we will work together to find a solution to this problem that respects both our needs. For organizations which fear reward and punishment-based leadership, this can be an effective means of building trust that problems can be talked about because they will be solved to everyone’s satisfaction.

An additional concept is the “Principle of Participation” which states that those who are responsible for helping to shape a decision, feel responsible for seeing that it works. Utilizing the PoP, leaders can avoid the temptation to dictate solutions to problems that are brought to their attention and instead get their team members involvement in finding a resolution that they will actively support.

The Periodic Planning Conference Concept

People who believe they ARE the organization will want to contribute to its success, this means people need:

  1. Work that is meaningful and provides need-fulfilling experiences
  2. Their ideas and contributions are valued and needed
  3. Guidance for how to grow and develop so they can enjoy the satisfaction of being more competent over time
  4. A feeling of freedom and self-determination through improving their own performance

The Periodic Planning Conference (PPC) is an instrumental practice in soliciting their ideas, providing guidance and giving them a sense of self-determination in improving their performance such that ultimately work becomes more meaningful and need-fulfilling because the person is creating their own work.

The PPC is an alternative to the annual performance appraisal and is instead a regularly scheduled conference, generally every six months, with each group member. It may be as short as a half hour, averages two hours but may involve several meetings stretched over a period of days.

Items for discussion:

  • Group member’s ideas for improving performance in the next six months
  • Ideas for developing new skills
  • Plans to institute changes in carrying out functions of the job
  • Discuss ways the group leader can help the group member accomplish their goals in the next six months
  • Discuss with group leader ANY problem or concern impacting their job performance, job satisfaction or future with the company

It focuses on FUTURE performance (what can be done) rather than PAST performance (what has been done). It has no scores and focuses on job functions rather than personal characteristics or qualities. It is a two-way conference.

The rationale:

  • It is the leaders’ responsibility to help the individual member improve their performance
  • Provides useful organizational by-products:
    • Identifying qualified candidates for each level of management
    • Providing means for systematic follow-up and development of people
    • Focus on job performance instead of personality traits (de-personalize management)
    • Help people to help themselves grow in the job and the org
  • Builds a relationship between leader and group member where free discussion can exist and problems can become visible and addressed
  • Focuses on the future, engages with positive behaviors to make improvements
  • Group members become more engaged in their work by suggesting solutions to their own problems
  • Provides an opportunity to resolve conflicts when they arise, creating a mutually rewarding relationship

Important assumptions to discuss and keep in mind during a PPC:

  • Companies face competition and must make constant progress to avoid being surpassed by competitors; for the company to grow, people must grow; most people don’t like standing still
  • There is ALWAYS a better way of doing things
  • No one is EVER working at 100% of capacity
  • Change, growth and modification are an inevitable part of effective organizations
  • People are strongly motivated to accomplish goals they set themselves, not goals set for them by others
  • People are happier when given a chance to accomplish more

Steps to prepare for a PPC

  1. Prepare your people
    1. Explain the deficiencies of traditional performance-rating systems
    2. Explain the rationale of the PPC and its assumptions
    3. Listen to the feelings of team members
    4. Influence them to try the new PPC system on an experimental basis
  2. Get mutual agreement on job functions; what is the team member expected to contribute to the organization? What do they do in return for their wage/salary?
    1. What do you do to contribute to the organization?
    2. What do you do that warrants the organization paying you a salary?
    3. Why does your job exist? What is it supposed to contribute?
    4. When you feel you are doing a good job, what are you actually accomplishing for the organization?
    5. Procedure
      1. Explain the definition of a job function as opposed to a job duty
      2. Ask the team member to develop his own list
      3. Developer your own list as the leader
      4. Review them together
  3. Get mutual agreement on how performance is to be measured
    1. Reduces misunderstandings
    2. Points out what data will be needed for the group member to evaluate their own performance

Conducting the PPC

  1. Set the date for the PPC in advance, preferably by 1 week minimum
  2. Ask your team member to prepare goals in preparation for the conference
  3. Provide an opportunity to ask questions about the PPC
  4. Explain that the focus of the PPC is on the future, not the past, and that the team member is expected to “carry the ball” in presenting goals
  5. Explain your own goals for the work group, so the team member understands the larger context

Potential questions to prompt the team member in preparing for the PPC:

  • What do you want to accomplish in the coming year?
  • In which of your job functions do you feel the need for improvement?
  • What are your goals for doing a more effective job?
  • What help will you need from the organization to attain this goal?
  • What is your program this year for improving your performance or the performance of your work group?
  • What benchmark will let you know that you have improved?

Key points to remember about the PPC:

  • It’s the team member’s ball. Get his ideas and feelings out first. Active Listening.
  • Remember to keep the discussion forward-looking, the past is gone.
  • When it’s your turn to talk, be candid, honest and open. Send I-Messages.
  • Secure agreement on the goals to be accomplished. Keep their number to a workable size. Use Method III.
  • As a leader you want to have a clear understanding of how your team member plans to reach each goal– what actions are planned.
  • Share ideas when you think there is an opportunity or need
  • Maintain a climate that is warm, friendly and informal, but task-oriented.
  • Setting goals is a commitment to change, some may resist sticking their necks out
  • Review and put into writing goals agreed upon, with a copy for each participant (and, can share with the group)

Implementing the decisions of a PPC

  1. Provide data needed to evaluate progress
  2. Provide material, financial or personnel resources required to accomplish goals
  3. Make yourself available as a counselor or facilitator of problem-solving (use the Six Step process)

Expected benefits of the PPC

  1. Team members respond to trust by becoming more responsible and less dependent
  2. Higher motivation in your team members
  3. Greater self-fulfillment and satisfaction from team members
  4. You will spend less time supervising and overseeing
  5. Witness continuous improvement in job performance; doing things better will become the norm

Deeper issues for leaders

Just as the adults before us are grown versions of the children they once were, and a person at work is the same person he is at home, leaders must reflect on how their choices and actions will extend and reverberate beyond the narrow confines of the workplace. These personal philosophical inquiries may be of benefit for the leader in contemplating his place in society at large and, more importantly, what kind of impact he wants to have on that society:

  • What kind of person do you want to be? How you behave as a leader will shape you as a person
  • What kind of relationship do you want? How you behave as a leader will determine the kinds of relationships you have with others
  • What kind of organization do you want? Organizations are made of people in relationships, so the kinds of people and the types of relationships they have determine the type of organization they form
  • What kind of society do you want? An open society requires open leaders running open organizations where the members are allowed to exercise their own talents and wills

Review – Good To Great

Good To Great: Why some companies make the leap and others don’t

by Jim Collins, published 2001

The G2G Model

“Good To Great” seeks to answer the question, “Why do some good companies become great companies in terms of their market-beating stock performance, while competitors stagnate or decline?” After a deep dive into varied data sources with a team of tens of university researchers, Collins and his team arrived at an answer:

  1. Level 5 Leadership
  2. First Who… Then What
  3. Confront The Brutal Facts (Yet Never Lose Faith)
  4. The Hedgehog Concept (Simplicity Within The Three Circles)
  5. A Culture Of Discipline
  6. Technology Accelerators

The first two items capture the importance of “disciplined people”, the second two items refer to “disciplined thought” and the final pair embodies “disciplined action”. The concepts are further categorized, with the first three components representing the “build up”, the ducks that must be gotten into a row before the second category holding the last three components, “breakthrough”, can take place. The entire package is wrapped up in the physical metaphor of the “flywheel”, something an organization pushes on and pushes on until suddenly it rolls forward and gains momentum on its own.

This book found its way onto my radar several times so I finally decided to read it. I’d heard it mentioned as a good business book in many places but first took the idea of reading it seriously when I saw Geoff Gannon mention it as part of an essential “Value Investing 101” reading list. I didn’t actually follow through on the initial impulse until I took a “leadership science” course recently in which this book was emphasized as worth covering.

I found G2G to be almost exactly what I expected– a rather breathless, New Age-y, pseudo-philosophical and kinda-scientific handbook to basic principles of organizational management and business success.  The recommendations contained within range from the seemingly reasonable to the somewhat suspect and the author and his research team take great pains to make the case that they have built their findings on an empirical foundation but I found the “We had no theories or preconceived notions, we just looked at what the numbers said” reasoning scary. This is actually the opposite of science, you’re supposed to have some theories and then look at whether the data confirms or denies them. Data by itself can’t tell you anything and deriving theory from data patterns is the essence of fallacious pattern-fitting.

Those caveats out of the way, the book is still hard to argue with. Why would an egotistical maniac for a leader be a good thing in anything but a tyrannical political regime, for example? How would having “the wrong people on the bus” be a benefit to an organization? What would be the value in having an undisciplined culture of people who refuse to see reality for what it is?

What I found most interesting about the book is the way in which all the principles laid out essentially tend to work toward the common goal of creating a controlled decision-making structure for a business organization to protect it from the undue influence of big egos and wandering identities alike. In other words, the principles primarily address the psychological risks of business organizations connected to cult-like dependency on great leaders, tendency toward self-delusional thinking and the urge to try everything or take the easy way out rather than focus on obvious strengths. This approach has many corollaries to the value investing framework of Benjamin Graham who ultimately saw investor psychology as the biggest obstacle to investor performance.

I don’t have the time or interest to confirm this hypothesis but I did wonder how many of the market-beating performances cataloged were due primarily to financial leverage used by the organization in question, above and beyond the positive effects of their organizational structure.

A science is possible in all realms of human inquiry into the state of nature. Man and his business organizations are a part of nature and thus they fall under the rubric of potential scientific inquiry. I don’t think we’re there yet with most of what passes for business “research” and management or organizational science, but here and there the truth peeks out. “Good To Great” probably offers some clues but it’s hard to know precisely what is the wheat and what is the chaff here. Clearly if you inverted all of the recommendations of the book and tried to operate a business that way you’d meet your demise rather quickly, but that is not the same thing as saying that the recommendations as stated will lead in the other direction to greatness, or that they necessarily explain the above-average market return of these public companies.

I took a lot of notes in the margin and highlighted things that “sounded good” to me but on revisiting them I am not sure how many are as truly useful as they first seemed when I read them. I think the biggest takeaway I had from the book was the importance of questioning everything, not only as a philosophical notion but also as a practical business tool for identifying problems AND solutions.

Review – How To Win Friends & Influence People

How To Win Friends And Influence People

by Dale Carnegie, published 1936, 1981

A master’s education in properly respectful and efficacious communication

Dale Carnegie’s 1936 classic in interpersonal communication sets the standard in techniques for dealing positively and constructively with others. The book is easy to summarize (the edition I own actually has an end-chapter summary and end-of-section summary-summary of all the major points addressed), so I’ve done that below for quick reference. But Carnegie is an excellent story teller and weaver of parables. This is a book that’s easy to pick up, hard to put down and well-suited to driving the points home in a concrete way that reading the outline by itself just can’t do. Every human being should own and know the principles of this book.

Fundamental Techniques In Handling People

  1. Don’t criticize, condemn or complain.
  2. Give honest and sincere appreciation.
  3. Arouse in the other person an eager want.

Six Ways to Make People Like You

  1. Become genuinely interested in other people.
  2. Smile.
  3. Remember that a person’s name is to that person the sweetest and most important sound in any language.
  4. Be a good listener. Encourage others to talk about themselves.
  5. Talk in terms of the other person’s interests.
  6. Make the other person feel important– and do it sincerely.

How to Win People to Your Way of Thinking

  1. The only way to get the best of an argument is to avoid it.
  2. Show respect for the other person’s opinions. Never say, “You’re wrong.”
  3. If you are wrong, admit it quickly and emphatically.
  4. Begin in a friendly way.
  5. Get the other person saying “Yes, yes” immediately.
  6. Let the other person do a great deal of the talking.
  7. Let the other person feel that the idea is his or hers.
  8. Try honestly to see from the other person’s point of view.
  9. Be sympathetic with the other person’s ideas and desires.
  10. Appeal to the nobler motives.
  11. Dramatize your ideas.
  12. Throw down a challenge.

Be a Leader: How to Change People Without Giving Offense Arousing Resentment

  1. Begin with praise and honest appreciation.
  2. Call attention to people’s mistakes indirectly.
  3. Talk about your own mistakes before criticizing the other person.
  4. Ask questions instead of giving direct orders.
  5. Let the other person save face.
  6. Praise the slightest improvement and praise every improvement. Be “hearty in your approbation and lavish in your praise.”
  7. Give the other person a fine reputation to live up to.
  8. Use encouragement. Make the fault seem easy to correct.
  9. Make the other person happy about doing the thing you suggest.

Notes – The Physics & Chemistry of Leadership

Notes from a leadership talk given in 2013

  1. The Business Physics Law of Ownership: “the responsibility for the performance, productivity, morale and attitude of the employees rests with the leader”
  2. Four-House Management: “maintaining balance among all 4 houses is critical”
    1. growth
    2. control
    3. process
    4. culture; drives all the other houses
    5. Kotter-Heskett Question: adaptive cultures have higher productivity per employee and thus higher net profit
    6. Zappos Company Culture Handbook, available on website
    7. Steam Employee Handbook
    8. Lou Gerstner
  3. The Law of the Poker Chips: “never confuse activity with results”
    1. focus on blue chip items rather than white chip items (easily identified/quantified items that can be checked off)
    2. identify your REAL priorities; plan and organize EVERYTHING around these priorities
    3. attention is all there is
    4. Annie Maddox:
      1. the ability to concentrate
      2. the ability to operate w/ consistent self-discipline
      3. the ability to turn abstract objectives into concrete goals and achieve them
      4. the ability to build a cohesive, focused team around those objectives
  4. The Law of F & V: “my willingness to adapt will determine my performance potential”
    1. performance potential is a function of
      1. versatility
      2. flexibility
  5. Social Learning Theory: “self-management must precede people management because most organizational behaviors are learned through observation and modeling:”
    1. credibility killers
      1. unenforced policies or operational procedures
      2. failure to resolve weak performance or work execution issues, especially when they impact other employees
      3. failure to resolve employees toxic behavior issues
      4. apparent lack of responsiveness to correctable process problems
      5. emotionally immature behavior among leaders
    2. if you can simply manage your conversation, almost everything else in life will fall into place ~ Mike Corbit
    3. you don’t have to be a perfect leader but you do have to improve, if people see you making progress this gives you leverage
    4. Dr. Albert Bandura
  6. Propulsion Theory: “energy comes from purpose”
    1. emotional intelligence
      1. self-awareness
      2. self-control
      3. self-motivation
      4. empathy for others
      5. ability to influence others
    2. what do employees care about?
      1. treatment
      2. communication
      3. meaningfulness
    3. what is motivation?
      1. the internal force that prompts to action
  7. The Chemistry Law: “human behavior is based primarily on chemistry and emotion, not logic”
    1. “stress makes people stupid.”
    2. nothing grows in nature without stress
    3. growth only occurs with the carefully managed application of appropriate levels of stress
    4. the discovery principle: positive discovery triggers the release of chemicals whose net result is the feeling of physiological betterment
  8. The Law of Engagement: “increasing our level of engagement will increase their level of engagement”
    1. total, active involvement
    2. emotional connection
    3. full participation
    4. complete interlocking for the purpose of transferring power
  9. The Algebra Teacher: “leadership success depends on desire, willingness and ability to influence, teach and develop people”
  10. Pygmalion Management: “the leader knows that how they think about employees affects their performance because people will rise or fall to the level of our expectations”
  11. The Power of Electricity: “increased productivity is a result of increased self-esteem, which is a result of ongoing, learned and personal achievement”
    1. A leader is a dealer in hope. ~Bonaparte
  12. The Power of Self-Discovery: “questions are more powerful than answers”
    1. we want to ask enough well thought-out questions to lead to either self-discovery and progress on the employees’ part or useful understanding on our part
    2. “if it was your ship, what would you do?”
  13. The Law of the Cheetah: “productivity improves as communication improves because perception drives behavior”
    1. it is the responsibility of the manager assigning the task to ensure that the request was received, understood and executed
  14. Inertia and Entropy: “never ignore unsatisfactory behavior or performance”
    1. an object at rest tends to stay at rest, in motion stays in motion, unless acted upon by an outside force
    2. the natural progression of everything in the universe is from order to chaos
  15. Curing Frustration: “the primary difference between great managers and average managers is often their willingness and ability to take action”
    1. “action cures frustration”
    2. 6 basic functions of a supervisor
      1. hire carefully, and hire character first
      2. train, teach, instruct and develop
      3. monitor and evaluate progress
      4. provide feedback, adjustment and input for correction and improvement
      5. keep people focused
      6. create and maintain an environment that is inspiring and energizing
    3. EPT training
      1. you watch me
      2. we do it together
      3. I’m going to watch you
      4. we review it
      5. I watch you teach
      6. you take ownership
  16. The Power of Niagara Falls: “part of leadership is being aware of theater, which creates energy”

Notes – The Organized Executive

I recently had the good fortune to listen to Bruce Breier, a time management and organization guru, give a presentation on “The Organized Executive”. What follows are notes from his handouts and the discussion that I considered valuable. Bruce is a professional consultant and can be reached by e-mail. He’s located in La Jolla, CA.

“What’s your biggest time management challenge these days?”

The best place to start in improving one’s time management and organizational practices is to consider a simple needs assessment. Which of these are you missing or need help with?

  1. a methodology for building and managing your annual business plan
  2. an organized program for your direct-reports that define goals, metrics and strategy
  3. a master task list to track commitments and to-do items
  4. a consistent daily and weekly planning system
  5. scheduled private work time (PWT) each day to accomplish priorities
  6. reducing unjustified interruptions to your workflow throughout the week
  7. method for delegating tasks for on-time delivery through the efforts of others
  8. effective and efficient meetings within the business
  9. a system for organizing and managing the email environment
  10. an uncluttered office and work area

Try printing this list and seeing which items you are missing. Then observe your direct reports and do the same for them (or ask them to complete the needs assessment on their own and share the results with you). You will quickly identify the high priority items missing from your time and workflow management system. Start with the most critical item first, then work through the remainders in order.

Building the system

An effective time and workflow management system is a system. That seems redundant but it’s worth repeating– all the elements must work holistically. You task management system should work with your calendar system; your communication system (email, phone and live meetings) should work with your goals and annual plan process. The idea is to create consistency between all the elements to drive a focused effort in the direction of greatest personal and organizational priorities. As an executive, you can not afford to use a system that operates any other way.

After performing your needs assessment, you can consider the following recommendations as solutions to the gaps in your organizational process. Remember, these elements all work together so make sure you understand how, if you don’t have a gap in a particular area, maintaining your current system in that area will serve to complement these recommendations:

  1. use a sequential checklist to develop, finalize and regularly manage the business plan for the fiscal year
  2. establish “success descriptions” for each position on your staff, defining priority goals, metrics and the organizational strategy to achieve excellence for the fiscal year
  3. utilize a master task list system for your role and populate it with to-do items, attaching due dates or deadlines to all tasks
  4. establish a recurring appointment for weekly planning on your calendar, a day and time to get ready for the following workweek; utilize the “bookends” concept, allowing a 15-30 minute start up period each morning and a 15-30 minute wrap up period each afternoon
  5. schedule 5-10 hours per week of Private Work Time (PWT) to accomplish daily and weekly priorities; pre-determine how this time will be spent during your morning book end
  6. establish a written policy for diagnosing all interruptions for urgency prior to causing or accepting them and communicate it to all members of your team; lead by example by respecting other people’s time accordingly
  7. delegate through acutely clear language in terms of what the desired outcome looks like and when it must be accomplished by; proofread for clarity, accuracy and tone before sending electronically
  8. commit to a standard protocol for meetings (such as the structure outline in Death by Meeting) and establish a zero tolerance policy for meetings that do not comply
  9. purge inbox and sent items folders of all inactive messages and institute the “Active Only” or “Inbox Zero” method
  10. allocate time to completely purge and organize your physical workspace, establish a filing system for active and inactive documents

Putting It All Together

Now that you’ve performed a needs assessment and considered specific recommendations for improving your organizational practices, what follows are guidelines for implementing each recommendation successfully.

The Business Plan Model

The BPM begins with an executive summary of the the business in terms of where it has been and where it is going and what needs to be accomplished in the next year to get there. This is followed by the vision statement, which outlines the guiding principle of the organization’s actions (such as “To be the highest quality provider of fresh seafood groceries”). The business plan should include a strategic assessment (SWOT analysis) and an outline of the top 3-5 fiscal year priorities. Who will be in charge of these priorities and accomplishing them is the goal leader identification component, followed by the strategy for accomplishing each. Key Success Indicators provide agreed upon metrics for measuring progress toward the achievement of each priority. The team should also develop graphical scoreboards to aid in “at a glance” study of performance to help the team know if it is winning or losing and how much time is left to get the job done. Finally, the team divides the strategy into 90-day plans and meets monthly to review the effort to date.

The Success Description

This is a one page business plan for each position on the team (the executive needs this for the direct-reports on his staff, but they in turn should develop them for each position on their departmental teams). The idea is to make it clear what everyone’s responsibility is to help achieve the annual business plan outlined above, so these descriptions need to reference the items developed in the business plan to produce clarity of vision and harmony of effort. Each position should have three top priorities and an organizational strategy for success as well as unique KPIs. Like the annual business plan, 1-3 graphical scoreboards for each position help each “player” to tell if they’re winning or losing and how much time they have to turn the game around. Reviews should be conducted, utilizing the graphical scoreboards, monthly.

The Master Task List

The MTL is simple to employ. First, select a method for managing the MTL, such as a notebook and pen, online software like Evernote or even an Excel spreadsheet. Next, fully populate the list with ALL tasks and to-dos. Every document sitting on your desk or in your email or residing on other assorted task lists should be translated into an actionable activity and placed on the MTL. The most critical step is to assign a due date or deadline for every task, ie, “Deliver inventory analysis report to inventory manager by Tues, July 1st”. A task without a due date can not be prioritized and is unlikely to be accomplished. Once each task has a due date, sort the list by priority, earliest due dates first. Scan the list periodically to make sure you are aware of intermediate steps necessary to accomplish long-dated items– you can also consider creating intermediate, sort-term tasks and due dates for such items to make sure you don’t miss a deadline far in the future because you forgot to prepare essential steps ahead of time. Items which come due repeatedly should be on a calendar and set up as an “appointment” rather than as part of the MTL; they can be added to a daily priority task list during morning planning as necessary.

New tasks should be “downloaded” from sources (email, notepads/meeting logs, conversations with others, etc.) daily, deadlined and re-sorted. Another good practice is to have a “parking lot” on your MTL that tasks can be added to ad hoc throughout the day, then re-sorted at the end of the day for future work. As an executive, request MTLs for ALL managers and check-in on their MTLs occasionally for organizational awareness.

Weekly Planning

Private Work Time (PWT) is essential for every organized, effective executive. This is time in which the individual is inaccessible to anyone else and can focus resolutely on their own work and priorities. Select the day of the week and the time of that day and then make it a recurring appointment on your calendar. Develop a realistic task list to get accomplished during each PWT period during that day’s morning start-up. To allow availability for PWT, confirm meetings for the following week by Friday afternoon and then do not schedule new meetings and activities during the week that weren’t confirmed the week previous, otherwise you can quickly over schedule all “available” gaps on your calendar and leave no time for PWT. Utilize acutely clear delegation to keep yourself uninterrupted and your organization moving while you are in the zone.

Workday Bookends

Workday bookends are the way to synchronize activity between the MTL and actual daily workflow. Begin with the Morning Start-up: scan email for urgent messages, define today’s priority tasks (3-5) and prepare notes and research for scheduled meetings. Time permitting conduct email correspondence as necessary. At the end of the day, leave scheduled time for the Daily Wrap-up: download new tasks to the MTL, file/toss new paper documents, preview tomorrow’s schedule, engage in acutely clear delegation as needed and finish with clean-up email correspondence. Establishing this “spool up/spool down” rhythm to your day is critical to getting control over your time and workflow. The time spent in preparing and debriefing will save much more time lost to interruptions, lack of focus, confusion of priority, etc.

Private Work Time (PWT)

One of the most powerful and most overlooked concepts in every organized executive’s arsenal. Key considerations are how much time per day to devote to PWT? All at once or split it up? What specific time(s)? When will you begin using PWT and when will you schedule it? The concept is pretty self-explanatory. Think of it as a “meeting with yourself”, put it on your calendar and don’t allow interruptions just as you wouldn’t allow interruptions in a meeting with staff, vendors or customers.

Interruptions Management

Interruptions confuse prioritize, ruin focus and create a culture of crisis and anxiety for everyone. It’s critical that everyone in the organization be offered the opportunity to work without interruption as much as possible during the day. An interruptions management system is the solution. First, develop a policy about interruptions in terms of urgency and importance– what kind of interruptions, if any, are acceptable to make (ie, “The building is burning down” or “A key customer is on the line and threatening to end his contract”). Every interruption must be able to be classified as important according to a pre-determined standard, and urgent in terms of not being able to be handled any other time than NOW. Develop a procedure for communicating interruptions and issue a directive to all team members instructing them on how to handle interruptions going forward. There may be different policies based on departmental versus organizational needs (ie, “You may interrupt the sales manager with a customer pricing request; you may not interrupt the CEO with a customer pricing request.”) Request compliance from all team members and monitor for effectiveness monthly.

Acutely Clear Delegation

Acutely Clear Delegation means delegating with instructions that leave no ambiguity or room for creativity in terms of the quality of output or the return time necessary. ACD must explain, specifically WHAT is to be accomplished by WHEN. Attention should be given to the receiver of the instruction in terms of their level of sophistication and communication preferences (ie, don’t send an email to someone who is known for failing to check it). If being sent electronically, proofread. The most important part of ACD is the timing component– if the person receiving the delegated task does not think it can be accomplished in that time frame, they need to immediately communicate with the delegator and explain the obstacles to completing the task on time and requesting a new deadline that is realistic. Finally, the person delegating must “Delegate and Trust”– they have to have faith that the person responsible will take ownership and see it through. Failure to do so should result in a coaching session on commitment to accountability. Repeat failure may be grounds for reviewing the employment agreement. An organized executive does not have time to micro-manage delegated tasks.

Standard Meeting Protocol

A well-run meeting involves several elements. The first is to note at the beginning of the meeting the cost of the meeting in terms of the time value of money or the money value of a goal to be communicated and achieved after the meeting, or the strategic value to competition in failing to meet on this issue. This sets a meaningful context for meeting participants to appreciate the seriousness need for focus and attention. Any items requiring preparation in advance by meeting attendees should be made known by the meeting leader. The meeting must start on time and end on time so that everyone can plan their day around it and not develop resentment about meetings creating interruptions or unplanned challenges for their other activities that day. Meetings require active participation by all participants– if there is nothing for them to do, they shouldn’t be there. All participants should take notes so they have their own records and if there is an official secretary for the meeting, notes should be collected and distributed after the meeting is over. All meetings should end with an “Acutely Clear Ending”, ie, “Person X will accomplish Task Y by Time Z following the conclusion of this meeting” so everyone knows what must be done before the next meeting. For more meeting structure and concepts, consider the Death By Meeting.

Email Management

The first task to get control of email is to decide on the Active Only or Inbox Zero method. Active Only means your inbox only contains items you’re actively addressing– all others are trashed, archived or added to a task list for future follow-up. Inbox Zero is a slightly more extreme version of this approach where all emails requiring follow-up are created as tasks on the MTL and everything else is archived when read or trashed if it is pure junk. In this situation, no items are left in the email inbox once the inbox has been scanned and sorted. Once a method is chosen, purge/file/task all inbox messages accordingly. If your email software is capable of it, sort your email inbox by oldest on top– it’s easy to get distracted by the “First In, First Out” email management method and ignore aging items received earlier. Always proofread emails before sending, particularly when delegating tasks that you expect follow-up on from others. Hold all emails that are not crucial right now. Finally, utilize the workday bookends concept to catch up on non-critical email correspondence.

Office Organization

Begin with a total office purge. Accumulate all items on desktops or work surfaces, filing drawers, etc. into one stack. Create a new filing system in filing drawers based on anticipated or most logical filing categories for your workflow or business needs. Then, go through your pile and choose to either File/Archive in your new filing system for later reference, Task for an item requiring follow-up (then trash once Tasked) or Trash for anything that does not require follow-up and is no longer relevant or valuable. For items requiring archiving, consider scanning a copy into your computer and maintaining your filing system electronically instead. On your desk, set up chronological desk trays for incoming media. To maintain your office organization system, institute a “File/Act on/Delegate/Shred” process at your Daily Wrap-up. You should come to and leave from a spotless office/desktop everyday.

Additional Resources and Further Reading

Here is a list of books for the “Organized Executive” recommended by Bruce Breier for further study:

  • The Effective Executive, by Peter Drucker
  • The 7 Habits of Highly Effective People, by Stephen Covey
  • Good to Great, by Jim Collins
  • Death By Meeting, by Patrick Lencioni
  • The Way We Work Isn’t Working, by Tony Schwartz
  • Getting Things Done, by David Allen

Other Notes
Here are other notes I took during the discussion which help give further context and detail to Bruce’s system:

  • Start your day with a daily plan numbering top 3 priorities for the day; do this in the first 15 mins after arrival
  • Friday is the best day of the week to plan for the following week, 15-30 mins of uninterrupted time around 3/330pm
  • “What gets scheduled, gets done.” Schedule “PWT” (Private Work Time), 1-2hrs, 1-2x per day on your calendar where you are unavailable, inaccessible and uninterruptible to focus on your primary tasks; this is your executive privilege and you should make full use of it
  • A task, project or goal without a deadline or due date is a philosophical statement; use a master task list sorted by due date to keep yourself organized and productive
  • “Good is the enemy of great”, we must be selective to be excellent
  • Never let anyone sit down in your office until you know what they want
  • 5 necessary characteristics of those who work for you: initiative, self-reliance, commitment, accountability and empowerment
  • You need a written policy about how to handle disruptions: all disruptions must be prioritized for urgency and answer in the affirmative the question, “Does this need to be addressed RIGHT NOW?”
  • Maslow, human beings are deficiency-motivated, ie, avoidance of fear or pain; hard to make change happen until a person experiences enough fear or pain without it
  • Goal-setting approach for annual business plan: 1 goal each related to customer service, business development, financial performance, staff effectiveness and operational efficiency
  • By Friday afternoon of the present week, next weeks meeting calendar should be finalized, all new requests can be made for the following week; this prevents you from filling your calendar with meetings in “open slots” and never having time to get work done; also ensures you can be prepared for all meetings with plenty of time
  • Delegation depends on trust; trust requires your direct reports be “CMO”, Competent, Motivated and Organized; if your manager is not competent, you can train them; if they are not motivated, you can coach them; if they are not organized, you can help them build systems; if they are unresponsive, you may need to find someone else to get the job done
  • Successful leadership entails continually accomplishing pre-determined priorities primarily through the efforts of others
  • You don’t keep up with what you delegate to others, you delegate and trust. If you can’t trust, you have a problem and need to work on that
  • Let your leadership team run your annual plan, and your annual plan run your business; run your daily plan, and let your daily plan run your day
  • Schedule monthly reviews with your direct reports to see where tweaks need to be made

Review – Repeatability

Repeatability: Build Enduring Businesses for a World of Constant Change

by Chris Zook, James Allen, published 2012

What’s this book about?

I finished reading this book over three weeks ago. Since then, I have struggled to get myself to sit down and write a review. The primary reason I’ve struggled is because I am not sure I can say with confidence what this book is about, or to which genre it belongs. Is it about strategy? Business management? Business planning? Organizational theory? Something else?

“Repeatability” chants about simplicity, but it’s full of so many buzzwords, different-but-related ideas and proprietary-sounding business catchphrases that it’s hard at times to keep up. And perhaps I’ve dropped into the late middle of an earlier conversation, as the book references a “focus-expand-redefine” growth cycle elaborated upon in three earlier works known as “the trilogy”.

A more charitable explanation of my confusion might place the blame with the authors themselves. Take the way in which they describe the main shifts in strategy they say they are witnessing, which led them to write the book:

  1. less about a detailed plan and more about general direction and critical initiatives
  2. less about anticipating how change will occur, more about having rapid testing and learning processes to accelerate adaptation to change
  3. effective strategy increasingly indistinguishable from effective organization

The central insight from their research, the authors claim, is that,

complexity has become the silent killer of growth strategies

Why? The authors don’t take pains to explain or justify the assumption that the world is more complex and that “traditional” strategic notions no longer work in this new world order. They just accept it as common wisdom and run with solutions for responding to it.

Building “Great Repeatable Models”

The next several chapters detail what Zook and Allen call “Great Repeatable Models”, which are businesses defined by the following three principles:

  1. a strong, well-differentiated core
  2. clear non-negotiables
  3. systems for closed-loop learning

According to the authors, GRMs (germs?) were

sharply, almost obviously, differentiated relative to competitors along a dimension that also allowed for differential profitability

which I think is another way of saying they have a lucrative competitive advantage.

Similarly, the authors suggest that non-negotiables are a company’s

core values and the key criteria used to make trade-offs in decision making

while systems for closed-loop learning enabled GRMs to

drive continuous improvement across the business, leveraging transparency and consistency of their repeatable model

which I understood to mean that the businesses had a culture and process for improving their practices over time.

The Cult of the CEO

Chapter 5 of “Repeatability” seeks to demonstrate how the CEO is the guardian of the three principles of GRMs. While it clearly makes sense that the CEO, as the chief strategist and top of the organizational pyramid would have a role in implementing and enforcing a GRM, the authors offer little here to help other than numerous examples of success and failure in following the three principles followed by a hopeful conclusion that the “right leadership” will be in place to manage the delicate balancing act they specify as ideal. It seems to place the book in the Cult of the CEO genre (idealizing the role and superhuman nature of corporate chief executives) while simultaneously causing much of their writing up to that point to seem extemporaneous.

It’s almost as if the presence of the “right leadership” implies the presence of a GRM, and the absence of a GRM implies the absence of the “right leadership.” The book suffers from hindsight bias and tautological reasoning like this in numerous areas.

My own simple interpretation

The central tenets of this book are confusing, poorly defined and at times self-contradictory. Its research methodology (inductive empirical study to explain complex social phenomena) is frowned on by this Austrian economist. Ironically, it is the occasional element touched upon at the periphery of the book’s argument, rather than its core, where the authors manage to share something meaningful to solving the dilemmas of business people.

Unfortunately, the encouragement to keep the distance between the CEO and the customer minimal and to articulate a simple vision that even lower-level employees can grasp and rally behind, for example, is rather intuitive and obvious. Why would adding layers of bureaucracy and arbitrary decision-making, or creating a business plan so elaborate your employees don’t understand it, ever be a sound practice?

There’s a lot here including many case studies and other reference materials, but not all of it is useful or makes sense when viewed through the prism of the Great Repeatable Model. For some the digging required to find the occasional nugget of wisdom may be worth it but I can’t recommend such exertion for everybody.

Video – Seth Klarman On Leadership

The Harvard Business School presents Seth Klarman, founder and president of the Baupost Group

Major take-aways from the interview:

  • I don’t think a lot about being a leader; our goal is to be “excellent” and to be proud of what we do
  • Main principle for leadership or management-style: “Do unto others…”
  • Big believer in leading by example; you can’t expect other people to do things you’re incapable of or unwilling to do yourself
  • Sometimes organizations are stuck, people want to do more but they haven’t been asked the right way; don’t overlook the power of re-anchoring via leading by example
  • Leadership stems from credibility — credibility stems from being “right” over time and from having knowledge — and from moral values
  • Two important moral values for leaders:
    • Football field test; play the game from the center of the field, not near the sidelines, where it is easy to go out of bounds without intending to do so
    • WSJ test; live your life in a way that you would not be embarrassed to have it reported on the front page of the WSJ
  • Every quarter, I sit down with the non-investment team members of the firm and explain the current investment strategy; the idea is to help the rest of the firm understand why the firm is doing well or poorly; this creates a culture where everyone is on the same page
  • You want to create a culture where everyone is willing to stay late to finish a job if they have to, where people will spend time double-checking for mistakes; people paying attention to detail at every level of the firm is important
  • Leaders don’t take credit, they give credit; be quick to give everyone around you credit, it is empowering to those people
  • Turnover is a hidden cost of business; it can take so long to get someone up to speed, train them properly, get them to the point that they can contribute; treating employees properly and caring for them is a smart business decision
  • If you have someone who is not getting the job done, other people are probably carrying their weight and working extra hard for them, and this isn’t fair; good leaders need to be fair
  • Get a good mentor; find a place to work where they care about you, that will nurture you and be interested in your development; if you can find one it sets you on the road to success
  • An experience SK feels good about as a leader: the time the leaders of the firm decided to buy the entire firm playoff tickets for the Red Sox game that ended up being a historic game– an order of magnitude different from handing over a $1000 bonus
  • A mistake SK made as a leader: tolerating a “difficult person” for far too long, because they were a talented individual; it poisoned the well, tarnished the moral character of the firm, led to some financial losses; focused too much on the short-term pain rather than the long-term benefit of that decision
  • A leader is not afraid to fail, is not afraid to be wrong or to lose money in the short-term; a leader always adheres to their principles and standards
  • JP Morgan: “I can do the work of a year in 9 months, but not in 12”; it’s important to set time aside to refresh, relax, reflect
  • Marathon, not a sprint; don’t focus on the short-term because it causes anxiety and makes you hyperactive in an effort to compensate for short-term poor performance
  • You can’t be a leader if you burn out; find balance, seek a variety of interests
  • Working a couple years at an intense pace (80hrs+/week) is okay if it’s for a specific purpose; ideally, if you are going to work that hard, do something entrepreneurial, then you’re doing it for yourself and the benefits, if any, accrue to you
  • Understand that if you plan to compete by being willing to work 100 hours a week, you’ll be beat by people willing to work 110 hours