Notes from over 100 business books

Notes from over 100 Business Books

Leadership and Management
Business Basics
Communication
Presentations
Strategy
Sales
Partnerships
Marketing
Customer Service
Finance
Metrics/Performance
Competition
Mission/Vision/Values
Innovation
Product Development
Entrepreneurship
Culture
Politics
Productivity
Project Management
Problem Solving
Career Advice
Work/Life Balance

LEADERSHIP and MANAGEMENT
What is Leadership?
Leadership is inspiring and rallying people toward a better and brighter future.
“If you want to build a ship, don’t drum up the people to gather wood, divide the work, and give
orders. Instead, teach them to yearn for for the vast and endless sea.” ~Antoine De Saint-
Exupery
Six Stars of Leadership (TJ’s Leadership Framework)
1. Courage: As a leader, you must have courage to do a lot of things. The courage to
initiate, to set things in motion, to defend, debate, the courage to decide, to let go,
and to admit mistakes.
2. Inclusion: You have to include the people who are, and will be, affected by your
decisions. The easiest and most effective way to get people to follow you as the
leader is to include them in paving a path together.
3. Competence: Know what you’re good at, and what you’re not. You cannot be great
at everything, so don’t try. It’s a fruitless endeavor. Instead, focus your time and
energy in the areas you excel, and get help from your team and the people around
you for everything else. This also encompasses courage and inclusion to a great
degree. You have to have the courage to admit what you’re weaknesses, and then
include the folks around you to enable greatness.
4. Clarity: There is uncertainty all around us- We cannot escape it. A leader must be a
source of clarity among the chaos. Boil complex issues down to clear decisions and
directives. Inspire your team through clarity and laser focus on what matters most.
And communicate regularly so that your vision and direction are crystal clear.
5. Coaching: When it comes to leadership, coaching comes in two forms. The first form
is receiving, meaning, the leader must be on the receiving end of coaching to
enhance and develop their skills. No one becomes great alone. The second form is
giving, meaning, the leader must provide coaching to the people around them. Rather
than being the source of all answers, teach the people around you to be great so you
can grow them into leaders as well.
6. Influence: By regularly exercising the previous 5 leadership stars, you will hold the
keys to influencing the people around you. It is through this influence that you can
truly make great things happen
Get, and Keep things Moving
When management communicates and follows up on those actions- when it says what it’s going to do
and then does it- its credibility starts to grow and people begin to move along with the new leadership.
Keep the ‘BIG PICTURE’ in mind.
Don’t just focus on your direct responsibilities, department, or group. Instead look for ways to add more
value to the organization in general.
Three Big Questions for Leadership
1. What's the single biggest thing you can imagine that will grow your business or change your life?
2. Who do you need to affect, influence, or take with you to be successful?

3. What perceptions, habits, or beliefs of this target audience do you need to build, change, or
reinforce to reach your goal?
Managing Compassionately
Compassion is essentially defined as ‘walking in another man’s shoes’. As the Dalai Lama explains, if you
are walking along a trail and come along a person who is being crushed by a boulder, an empathetic
reaction would result in you feeling the same sense of crushing suffocation and render you unable to
help. The compassionate reaction would put you in the sufferer's shoes, thinking this person must be
experiencing horrible pain so you're going to do everything in your power to remove the boulder and
alleviate their suffering. Put another way, compassion is a more objective form of empathy. This idea of
seeing things clearly through another person's perspective can be invaluable when it comes to relating
with others, particularly intense work situations.
Be Stubborn and flexible
Be stubborn on your values and vision, but flexible on the details and execution. If you’re not stubborn,
you’ll give up on experiments too soon. And if you’re not flexible, you’ll pound your head against the
wall and you won’t see a different solution to a problem you’re trying to solve.
Use the ‘Hotshot replaces me’ tool, often
Imagine tomorrow you are being replaced by someone who is a real hotshot. That’s persons goal is to
do a much better job in your position than you did. He or she will start by pointing out all your
shortcomings and missed opportunities. Then that person will tell everyone how he or she will do the
job so much better than you. Now take what that person would say, get a healthy dissatisfaction with
your performance, and go for breakthrough results NOW!
As yourself these questions:
 What shortcomings and missed opportunities could a hotshot find if that person wanted to
show how bad your performance was?
 What would a hotshot start doing to show how much better he is than you?
 What realities would a hotshot point to that you had been ignoring?
Reducing your Complaints
Instead of complaining, be a part of the solution. Complaining accomplishes nothing. How can you solve,
or assist in solving the problem you are complaining about?
Fail Forward, Fail Fast, Fail Better
The cost of inaction is far greater than failure. An idea without action is not worth the space it occupies
in your brain.
Fail Fast
Break items into small chunks which allows for more experimentation, leading for more chances for
success.
Fail Forward
Learn from what didn’t work, but continue toward what will work.
Fail Better

The best way to increase our amount of learning is to increase our amount of failure.
Things Amazing Leaders Do Differently
 They change their minds: One of the most courageous things a leader can do is admit when he
or she is wrong, and admit it often.
 They absorb shock: Great leaders today still do that. They absorb risk unto themselves, so
others can do their best work.
 They Over Communicate: The best leaders confide in their followers. Whereas they shield
people from danger, they also aren't afraid to trust people with all the information. In general,
people are more afraid of the unknown than they are of big scary problems. One of the best
things a leader can do is learn to be vulnerable.
 They think before answering: Whereas most of us (and powerful people especially) feel
pressure to have instant answers to everything (job interviews and media training teaches us to
do this), causing us to blubber and ramble and shoot from the hip, Fred takes his time. When
you ask him a question, he pauses. Sometimes for a long time. Sometimes the silence makes you
uncomfortable. He thinks carefully. And then he responds with triple the insight you expect. The
same thoughtfulness comes out in his writing as well.
 They search for the right path; not the easy one: Great leaders seek to do what's right first,
then figure out how to deal with the repercussions, rather than seeking to minimize pain and
twisting their morals to suit. Thomas Jefferson put it well: "In matters of style, swim with the
current; in matters of principle, stand like a rock."
 They have sacred time for themselves: The best leaders know that they need time for self-
improvement and balance in order to be sustainably useful to their tribes. Rather than
becoming martyrs for their teams, they draw firm lines around sacred alone time.
 They’re in it for others: Though the most effective leaders carve out sacred time for themselves,
the best of the best do so because they are motivated by the desire to help other people. "No
man will make a great leader who wants to do it all himself, or to get all the credit for doing it,"
said Andrew Carnegie.
BHAG (A.K.A Laughable Goals)
BHAG= Big Hairy Audacious Goals.
Bill Walsh’s Standards of Performance
 Exhibit a ferocious and intelligently applied work ethic directed at continual improvement
 Demonstrate respect for each person in the organization and the work he/she does
 Be deeply committed to learning and teaching, which means increasing my own expertise
 Be fair
 Demonstrate character
 Honor the direct connection between details and improvement, and relentlessly seek the latter
 Show self-control, especially when it counts most- under pressure
 Demonstrate and prize loyalty
 Use positive language and have a positive attitude
 Take pride in my effort as an entity separate from the results of that effort
 Be willing to go the extra distance for the organization
 deal appropriately with victory and defeat, adulation and humiliation (don’t get crazy with
victory nor dysfunctional with loss)
 Promote internal communication that is both open and substantive (especially under stress)
 Seek poise in myself and those I lead

 Put the team’s welfare and priorities ahead of my own
 Maintain an ongoing level of concentration and focus that is abnormally high
 Make sacrifice and commitment the organization’s trademark
First Who, then What
First you have to get the right people on the bus and the right people in the right seats, and then you
have to figure out where to drive it. If you have the right people on the bus the problem of how to
motivate and manage people largely goes away. The right people don't need to be tightly managed or
fired up; They will be self-motivated by the inner drive to produce great results.
Set appropriate Context
The best managers figure out how to get great outcomes by setting the appropriate context, rather than
by trying to control their people. When one of your talented people does something dumb, don’t blame
them. Instead, ask yourself what context you failed to set. When you are tempted to “control” your
people, ask yourself what context you could set instead. Are you articulating and inspiring enough about
goals and strategies?
Interview people at different locations
Interview each serious candidate in at least three different places, such as your office, coffeehouse, and
a walk down the street.
Speed up your hiring
 Respond to every candidate by sending a list of detailed questions about their schedule,
availability, skills, and type of work they like to do most. In addition you can let them know
about your work habits and preferences. This immediately weeds out people who are not suited
to the position.
 Add Qualification questions right at the same time where a candidate would submit the resume
4 Dimensions in Hiring
1. Personal characteristics are just that—core to one’s personal character. They are what make a person
who they are, so for all practical purposes they are unchangeable (or at least too difficult to realistically

change in a business context). After all, you can teach a chicken to climb a tree, but you’re better off
getting a squirrel in the first place.
When I’m evaluating personal characteristics, I focus on:
 Integrity
 Intelligence
 Judgment
 Passion
 Strong communicator
 Initiative
 Energy
2. Motivation is next on the list. As with personal characteristics, this is often deeply embedded and
therefore difficult to change. Motivation is often the best determinant of whether the person is a good
fit for the role (and vice versa). Because preferences about work environments, stress levels, challenges
and team dynamics can vary greatly, misalignment in this area is one of the primary causes of job
dissatisfaction and under performance.
3. Skills—which sit on the secondary tier of dimensions—can’t be overlooked entirely, but they do
require some reframing.
Most people think of skills in terms of job-specific expertise (graphic design, programming languages,
etc.). While those job-specific skills do matter, they are much easier to learn once in a role than the
more foundational skills you should be evaluating first: skills like communication, project management,
organization, the ability to handle rapid context switches, etc.
As long as those foundational skills are present—and the position is flexible enough to support learning
additional skills along the way—the skills dimension can often be considered met (of course there are
some exceptions -- you won’t be training any surgeons on the job).
4. Knowledge is the least important dimension—not because it doesn’t matter, but because it is the
most easily changed (and is very likely to change anyway).
As a result, when evaluating this dimension, what’s most important is not the knowledge that the
candidate already has. Instead, assess their foundation and framework for gaining new knowledge, as
well as how able and willing they are to do so.
As with skills, those who don’t currently possess all the knowledge needed to be successful in a given
role can still be great candidates, as long as they have that foundation and the position provides the
opportunity to gain knowledge as they go.
In my experience, placing too much emphasis on knowledge (at the expense of the other three
dimensions) causes the majority of hiring mistakes. Remember, just because a candidate knows their
domain inside and out doesn’t mean they are a good team player or that they won’t jump ship as soon
as the tide turns.
Have "expectations meetings" with your employees
Have regular one-on-one meetings with each of your employees to discuss what you should expect of
each other in your working relationship.

Roll out the welcome mat for new employees
 Be organized and present the employee handbook with all of the important information,
company policies and procedures, contact numbers, and mission statement.
 Put a few special goodies, such as office supplies and a flower in a vase, on his or her desk to
welcome the employee to your company.
Be Rigorous in hiring and firing
 When in doubt, keep looking
 When you know you need to make a people change, act quickly.
Keep employee files with detailed records
 A little bit of paperwork and organization will save you a ton of time and headaches in the
unfortunate event you need to let someone go.
 You should have an employee handbook or manual and get each employee to sign a receipt
saying they've read it.
 Also keep copies of documents concerning the employee, including their reviews. In addition, if
you are having issues with an employee, keep precise notes including dates and times and any
relevant documents explaining where the employee is falling short of his duties.
Put Customers and Employees First
Put customers and employees first in everything you do and loyalty and profits will surely follow.
Compensation
The purpose of a compensation system should not be to get the right behaviors from the wrong people,
but to get the right people on the bus in the first place and keep them there.
Feedback: Fast and Constructive
Give feedback (good and bad) as it happens. A thank you note from the boss is one of the most
motivating pieces of feedback an employee can receive. A very detailed thank you is even more
valuable. You should never give criticism when you are feeling emotional or very disappointed. Always
wait until you've been able to reflect on what you actually want to accomplish through giving the
feedback.
Set expectations high from the start
From day one must make it clear that you expect employees to do their very best work for you.
The 5 Keys to Managing people
1. Be Kind throughout
2. Clear expectations
3. Positive and Negative Consequences
4. Information
5. Skill
"Be kind, for everyone you meet is fighting a great battle."-Plato
“The other person is always 98% hidden from your view.”- Unknown

“We are what we repeatedly do. Excellence, then, is not an act, but a habit.” ~Aristotle
Thoughtfulness is critical
Thoughtfulness is key to customer retention. Thoughtfulness is key to employee recruitment and
satisfaction. Thoughtfulness is key to brand perception. Thoughtfulness is key to our ability
to look in the mirror, and tell your kids about your job.
Create a help guide for your employees
 As the boss you are the keeper of so much knowledge that answering employees questions
about how to do things can take up in an inordinate amount of time.
 Each time your employees ask you a question, write that question down and log answers in a
central knowledge base. Additionally, train your staff on those questions regularly.
Celebrate ‘First Downs’
Don’t just recognize and celebrate the big wins- Get excited about the smaller wins that continuously
contribute to the bigger ones. This is similar to first downs and touch downs. Get excited about the first
downs because then you’ll get more of them, and the more you get, the closer you’ll get to more
touchdowns too.
Relentlessly Upgrade Your Team
Use every encounter as an opportunity to evaluate, coach, and build self-confidence. You are only as
successful as the weakest member of your team, so it's critical that you put the work in to ensure
excellence from the bottom up.
Insist on employee ownership of projects
Never let an idea leave the room without a champion.
Employee face-time
Set time aside each week to simply walk around the office and talk to people. This is a way of checking in
with everyone and see what they're working on and how they're feeling about the job. It's a really easy
way to make your staff know that you're accessible and cares about what you're doing.
Golden Circle of Inspiring Action
Great leaders inspire action from communicating ‘the why’ first.

Keep your staff focused on the right Priorities
Ask all of your employees to create Friday reports. These are quick emails sent at the end of the week
updating me on what was accomplished that week as well as any concerns or ideas for improvement for
the employee has.
“The art of war does not require complicated maneuvers; the simplest are the best, and common
sense is fundamental. From which one might wonder how it is general make blunders; it is because
they try to be clever”. ~ Napolean
“Tipping Point” Leadership
This hinges on the insight that in any organization, fundamental changes can happen quickly when the
beliefs and energies of a critical mass of people create an epidemic movement toward an idea. The key
to unlocking an epidemic movement is concentration, not diffusion. To change the mass it focuses on
transforming the extremes: the people, acts, and activities that exercise a disproportionate influence on
performance. By transforming the extremes, tipping point leaders are able to change the core fast and
at low cost to execute their new strategy. Key questions asked by tipping point leaders are:
 What factors or acts exercise a disproportionately positive influence on breaking the status quo?
 On getting the maximum bang out of each buck of resources?
 On motivating key players to aggressively move forward with change?
 And on knocking down political roadblocks that often trip up even the best strategies?

V2MOM
V2MOM= Vision, Values, Methods, Obstacles, and Measures. This is a leadership framework for
accomplishing your goals.
 Vision- What do you want?
 Values- What's important about it?
 Methods- How do you get it?
 Obstacles- What might stand in the way?
 Measures- How will you know when you have it?
Authority
You have as much authority as you take.
Hot Spots, Cold Spots, and Horse Trading
When it comes to scarce resources, there are three factors of disproportionate influence that executives
can leverage to dramatically free resources, onthe one hand, and multiply the value of resources, on the
other.
1. Hot Spots: These are resources that have low resource input but have high potential
performance gains. What activities have the greatest performance impact but are resource
starved?
2. Cold Spots: These are activities that have high resource input but low performance impact.
What actions consume your greatest resources but have scant performance impact?
3. Horse Trading: This involves trading your units excess resources in one area for another unit’s
excess resources to fill remaining resources gaps.
The Three E Principle of Fair Process

Fair process is a managerial expression of procedural justice theory. As in legal settings, fair process
builds execution into strategy by creating people’s buy-in up front. when fair process is exercised in the
strategy making process, people trust that a level playing field exists. This inspires them to cooperate
voluntarily in executing the resulting strategic decisions.
1. Engagement: This means involving individuals in the strategic decisions that affect them by
asking for their input and allowing them to refute the merits of one another's ideas and
assumptions. Engagement communicates management's respect for individuals and their ideas.
2. Explanation: This means that everyone involved and affected should understand why the final
strategic decisions are made as they are. An explanation allows employees to trust managers
intentions even if their own ideas have been rejected. It also serves as a powerful feedback loop
that enhances learning.
3. Expectation Clarity: This requires that after a strategy is set, managers state clearly the new
rules of the game. Although expectations may be demanding, employees should know upfront
what standards they will be judged by and the penalties for failure. What are the goals of the
new strategy? What are the new targets and milestones? Who is responsible for what?
Commanders Intent
Whenever you assign a task to someone, tell them why it must be done. The more your agent
understands the purpose behind your actions, the better they’ll be able to respond appropriately when
the situation changes.
Find and Grow ‘Locker Room Leaders’
As Bill Walsh once said, “locker room leaders are the guys on the team that are inside leaders. They are
the ones the other players look up to and follow, even if they do not have an official title of a leader.”
The goal of the primary leader is to identify the ones the team looks up to , and make sure they have the
tools and skills to continue leading. Find the locker room leaders and foster their ability to lead.
Circle Of Influence

Be Proactive
Don’t sit and wait for stuff to happen, go out and make it happen. If you wait for someone to hand you
something, you will never get it.
Pursue Top Talent as if your success depended on it
Without great people on your team, you will not last long. No one can do it all on their own all the time.
A players only hire A/A+ players. B players hire C players, and C players hire D players.
Create a Culture of Healthy Debate and Healthy Decision
Innovation and growth comes not from everyone agreeing all the time, but from healthy debate and
varying viewpoints. Work to create a culture that welcomes debate and different views, and that its
okay to not always agree on something.
Share Best Practices
Celebrate successes- and learn from them. Send the great emails and great proposals to the rest of the
team so that they can see what’s worked and use them in other deals.
Things to avoid as a leader
1. Winning too much: The need to win at all costs and in all situations- when it matters, when it
doesn’t, and when it’s totally beside the point.
2. Adding too much value: The overwhelming desire to add our two cents to every discussion.
3. Passing Judgment: The need to rate others and impose our standards on them.
4. Making destructive comments: The needless sarcasms and cutting remarks that we think make us
sound sharp and witty.

5. Starting with “No”, “But”, or “However”: The overuse of these negative qualifiers which secretly
say to everyone, “I’m right and you’re wrong”.
6. Telling the world how smart we are: The need to show people we’re smarter than they think we
are.
7. Speaking when angry: Using emotional volatility as a management tool.
8. Negativity or “Let me explain why that won’t work”: The need to share our negative thoughts
even when we weren’t asked.
9. Withholding information: The refusal to share information in order to maintain an advantage
over others.
10. Failing to give proper recognition: The inability to praise and reward.
11. Claiming credit that we don’t deserve: The most annoying way to overestimate our contribution to
any success.
12. Making excuses: The need to reposition our annoying behavior as a permanent fixture so people
excuse us for it.
13. Clinging to the past: The need to deflect blame away from ourselves and onto events and people
from our past; a subset of blaming everyone else.
14. Playing favorites: Failure to see that we are treating someone unfairly.
15. Refusing to express regret: The inability to take responsibility for our actions, admit we’re wrong,
or recognize how our actions affect others.
16. Not listening: The most passive-aggressive form of disrespect for colleagues.
17. Failing to express gratitude: The most basic form of bad manners
18. Punishing the messenger: The misguided need to attack the innocent who are usually only trying to
help us.
19. Passing the buck: The need to blame everyone but ourselves.
20. An excessive need to be “me”: Exalting our faults as virtues simply because they’re who we are.
A company is a community, not a machine.
Average bosses consider their company to be a machine with employees as cogs. They create rigid
structures with rigid rules and then try to maintain control by "pulling levers" and "steering the ship."
Extraordinary bosses see their company as a collection of individual hopes and dreams, all connected to
a higher purpose. They inspire employees to dedicate themselves to the success of their peers and
therefore to the community–and company–at large.
Management is service, not control.
Average bosses want employees to do exactly what they're told. They're hyper-aware of anything that
smacks of insubordination and create environments where individual initiative is squelched by the "wait
and see what the boss says" mentality.
Extraordinary bosses set a general direction and then commit themselves to obtaining the resources
that their employees need to get the job done. They push decision making downward, allowing teams
form their own rules and intervening only in emergencies.
Motivation comes from vision, not from fear.
Average bosses see fear--of getting fired, of ridicule, of loss of privilege--as a crucial way to motivate
people. As a result, employees and managers alike become paralyzed and unable to make risky
decisions.

Extraordinary bosses inspire people to see a better future and how they'll be a part of it. As a result,
employees work harder because they believe in the organization's goals, truly enjoy what they're doing
and (of course) know they'll share in the rewards.
Change equals growth, not pain.
Average bosses see change as both complicated and threatening, something to be endured only when a
firm is in desperate shape. They subconsciously torpedo change ... until it's too late.
Extraordinary bosses see change as an inevitable part of life. While they don't value change for its own
sake, they know that success is only possible if employees and organization embrace new ideas and new
ways of doing business
Work should be fun, not mere toil.
Average bosses buy into the notion that work is, at best, a necessary evil. They fully expect employees to
resent having to work, and therefore tend to subconsciously define themselves as oppressors and their
employees as victims. Everyone then behaves accordingly.
Extraordinary bosses see work as something that should be inherently enjoyable–and believe therefore
that the most important job of manager is, as far as possible, to put people in jobs that can and will
make them truly happy.
Practice Lean at all chances
Do only what’s necessary. Strip away the busy work that is ‘nice-to-have’, but not producing high impact
results. Eliminate unnecessary reports, tasks, etc. that are not critical to growing your business.
3 Steps Toward Gaining Alignment
1. share the reality..... Help people understand the why. It's the why that engages people.
2. ask for input.... Show that you've listened: ask direct questions based on what you know about
your challenge, and then let people know that you heard them and appreciate what they had to
say.
3. No involvement equals no commitment: Get your target audience involved early, or they will
never be truly committed to the goal.
4 P Model

14 Toyota Way Principles (pg. 37 of Toyota Way)
1. Base your management decisions on a long-term philosophy: even at the expense of short-term
financial goals.
2. Create a continuous process flow to bring problems to the surface.
3. Use "pull" systems to avoid overproduction.
4. Level out the workload (Heijunka). (Work like the tortoise, not the hare).
5. Build a culture of stopping to fix problems, to get quality right the first time.
6. Standardized tasks and processes are the foundation for continuous.
7. Use visual control so no problems are hidden.
8. Use only reliable, thoroughly tested technology that serves your people and processes.
9. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others.
10. develop exceptional people and teams who follow your company's philosophy.
11. Respect your extended network of partners and suppliers by challenging them and helping them
improve.
12. Go and see for yourself to thoroughly understand the situation (genchi genbutsu).
13. Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly
(nemawashi).
14. Become a learning organization through relentless reflection (HANSEI) and continuous improvement
(KAIZEN).
Create ‘Poka-Yoke’ Devices
These are error-proofing mechanisms that make it nearly impossible for humans to make mistakes .
Get the whole team involved in quality control
Design ways to allow your employees to assist the organization or team with quality control. Get
everyone rallying around quality and understanding that you’re working together to improve it daily.

Create Standardized Checklists for processes
To greatly minimize errors in processes, create quick reference checklists for employees so variation is
minimized or even eliminated. Variation generally equals non-value added waste.
Maslows Hierarchy of Needs
“The deepest human need is the need to be appreciated”.~ William James
Create a Climate of truth
Leadership is about creating a climate where the truth is heard and the brutal facts are confronted.
 Lead with questions, not answers.
 Engage in dialogue and debate, not coercion.
 Conduct autopsies without blame.
 Create “Red Flag” mechanisms
Stockdale Paradox
Create a Culture of Discipline
 Build a culture around the idea of freedom and responsibility, within a framework.
 Fill that culture with self-discipline people who are willing to go to extreme lengths to fill the
responsibilities.
 Don't confuse a culture of discipline with a tyrannical disciplinary.

 Adhere with great consistency to the hedgehog concept, exercising an almost religious focus on
the intersection of the three circles. Equally important, create "stop doing" list and
systematically unplug anything extraneous.
Herzberg Motivation Theory
Be an Empathetic Leader
To keep a balance between tasks and people, start by understanding the task at hand and then figure
out how to address the empathetic or people side to get it done.
Celebrate Others’ Decisions/Ideas
Put yourself in your employees’ shoes
Make time to spend an afternoon doing some of the more mundane work and your company. By seeing
things firsthand and joining people in the tasks they do, you're more likely to pay much more attention
the next time they suggest a change.
Be very liberal with public kudos
For those who go an extra millimeter to do trivial jobs especially well.
Have employees present little things that could be big things to customers in team meetings.
Excellence can be obtained if you:

Care more than others think is wise, risk more than others think is safe, dream more than others think is
practical, expect more than others think is possible.
You can achieve excellence by:
Promising yourself right now that you'll never again knowingly do anything that's not excellent,
regardless of any pressure to do otherwise by any boss or situation.
Only you can motivate you.
What I can do, as a boss, is to paint portraits of excellence.
MBWA:
Managing by wandering around. Practice it regularly.
Job one is self-motivation
Happy staff=happy customers
Put your staff first and customer second.
Present employees and other functions awards for service to your group.
How leaders measure success
As a leader, measure your success In terms of individuals you help succeed in the last 12 months. Review
your work with a person who reports to you, write a short case study on her or him, and assess the
degree to which you have specifically helped her or him grow and succeed.
Positive Reinforcement
Positive reinforcement, small or large, reliably induces forward motion, that is, more of the good thing
you acknowledged with that simple, little, in passing, "thanks" or "nice job". Negative reinforcement is
of questionable value. It often spurs a general slowdown, not just a course alteration relative to the
behavior you attempted to correct. Moreover, negative reinforcement routinely induces clever invasion,
the bad behavior isn't halted, instead the person negatively reinforced just concocts elaborate new
habits to keep from getting caught. This does not suggest you stop offering course corrections, it's just
that you must be conscious of the unintended consequences.
Practice Simple Things
Leadership is the art of practicing simple things, common sense gestures to ensure high morale and
vastly increase the odds of winning. In other words, small changes can have big consequences.
4 Most Important Words in Management x 2
The four most important words in management are “what do you think” and “I believe in you”.
“The art of leadership requires knowing when it makes sense to take people over the top, to push
them to their highest level of effort, and when to take your foot off the accelerator a little.”
Staff Feedback

If you talk to your people, ask them what to do about something, and then do what they say, your
business normally runs better. This is a simple idea that some managers with IQ’s of 150 cant bring
themselves to understand.
Limiting vs. Powerful Mind-set
A mind-set is a prejudice or bias, a fixed way of looking at something.
 Limiting Mind-set:
o “What works in China won’t work here”.
o “Corporate doesn’t understand my market”
 Powerful Mind-set:
o “It’s amazing that a Western idea worked in China, so its bound to work here”
o “Corporate can be a huge help to my market”
What could the world look like in 2020?
The best way to manage the risk of being stuck in status quo is to do scenario planning. Rather than
planning for a better future starting with what you have and what you know, start by taking your mind
all the way out to 2020 and asking , “what could the world look like?”, and then plan backward to today.
Forget about the status quo as you look through the windshield to see what likely lies ahead. Rather
than think about how you can improve what you have, free yourself to think about what you could
deliver.
Five Factors that Drive Employee Engagement
1. A strong relationship with one’s manager
2. Clear communication of expectations and goals
3. The right materials, resources, equipment, and information to achieve desired outcomes
4. A manager who encourages personal and professional development
5. A system where top performers are recognized
Have a point of view
Know your stances on major work issues and be open and willing to engage in conversations about
them. To have leadership presence, others need and want to know where you stand — they don't want
to have to guess or be blindsided midstream.
Be transparent about your position
Know the difference between navigating the political waters of your organization and actually becoming
the politics itself. Get support for your initiatives but be clear about what you are doing, why you are
doing it, and how you are doing it.
Don’t Micromanage, Over-Manage
It’s important to point out that we do not micromanage our operations. Over-managing is very different
from micromanaging in that the intent is extremely positive; it is a character trait of our leaders. Over-
managing is also a driver of consistent business results and an effect of the alignment of an
organization’s values and vision. The goal: be intentional where others are unintentional — over-
managing the things most companies ignore or under-manage is what differentiates you. Over-
managing means:

 Think about your challenge or goal differently and to a greater degree
 Pay extraordinary attention to the details
 View what is “typical” or “corporate best practices” as a baseline as opposed to an acceptable
standard
5 C’s of Next Generation Leaders
1. Competence- Channel energy to areas I am most likely to excel in.
a. The less you do, the more you accomplish.
b. The less you do, the more you enable others.
c. Learn to concentrate on my strengths.
d. Which balls are the ones you are called to keep in the air? Drop all others and people
will emerge to pick them up.
e. Become mission-driven instead of need-driven.
f. What are 2 or 3 things that you and only you are responsible for?
g. What is success in your position?
h. Busyness is not productive. Full schedules rarely mean maximum productivity. Most
productive people have a lot of discretionary time.
i. What is the 20% that results in your maximum effectiveness?
j. Don’t allow your time to get eaten up with responsibilities and projects that call for skills
that fall outside your core competencies. That is, without a doubt, a recipe for
mediocrity.
k. Embrace this truth: The less you do, the more you will accomplish.
l. Narrow your focus to increase your productivity and expand your influence within your
organization.
2. Courage- The leader is the one with the courage to initiate, set things in motion and move
ahead.
. When one listens to the success stories of leaders it is not so much their goals and strategies but
their grasping of an opportunity that gave them success.
a. Have the courage to say ‘no’. Opportunity does not equal obligation. If we do not avoid
becoming spread too thin, we will lose focus and become fuzzy. If our to-do lists become too long, we
should start a stop-doing list. Stay focused at all costs.
b. Leadership requires courage to challenge what is for the sake of what could be.
c. There will always be more opportunities than time. Learn to say “no”!
d. An accurate, insightful view of current reality is as important as a clear vision. Unfortunately,
most f us are in the habit of imposing biases on our perceptions of current reality.
e. All things are created twice. Once in the mind, and once physically.
f. Don’t let the how get in the way of pursuing the what. Leaders pursue opportunities long before
the means and the maps are available. Your industry’s unsolved problems are the gateway into the
future.
g. What could be? What should be? Write it down. Hang it on a wall. Broadcast it.
3. Clarity- Uncertain times require clear directives to avoid paralysis.
. The goal of leadership is not to eradicate uncertainty, but rather to navigate it. Uncertainty is a
component of every environment that calls for leadership. Where you find one, you will always find the
other.
a. Chaos and uncertainty are market opportunities for the wise.
b. Express uncertainties with confidence.
c. Don’t pretend to know- acknowledge your uncertainty.
d. Saying “ I don’t know, but we’ll figure it out…” is a sign of good leadership.

e. Seek counsel. Leadership is not about making decisions on your own. Getting good advice from
others is one of the best things we can do.
f. Measure success by the scoreboard- not by the playbook.
g. Be clear even when you are not certain. The only thing that we can be certain about is the past-
everything from this moment on is a guess. Once you acknowledge that, you will be free to make
decisions with limited information.
h. Recognize that clarity of vision is more important than the certainty of outcome. Every great
accomplishment began as an idea that stood in contrast to someone’s current reality.
i. Whoever paints the clearest picture will ultimately be perceived as the leader.
j. Don’t pretend. Once you are OK with what you don’t know, the people around you will be OK as
well.
k. Be flexible. Uncertainty will wreak havoc on your plans, but don’t allow uncertainty to derail
your vision. Pencil in your plans. Etch the vision in stone.
4. Coaching- Without a good coach you will never be as good as you could be.
. The wise leader listens to wise counsel. Learn from someone who has the advantage of age and
the opportunity to observe.
a. Coaches focus on future possibilities, not past mistakes.
b. A good coach observes, instructs, and inspires.
c. Learn everything you can from everyone you can.
d. Look for environments where you will be coached and not just paid.
e. What you learn is more important than what you earn.
f. Look for someone I can be a coach to.
g. I am not responsible for knowing everything, but you are responsible to share everything you
know.
5. Character- You can lead without character, but you will not be worth following.
. Character is the will to do what is right even when it is hard.
a. The willingness to say no is what sets the leader of character apart from the pack.
b. People buy into the leader before they buy into the vision.
c. Character is not made in crisis- it is only exhibited.
d. Make your intentions public.Once you have decided what you want to be, make it public.
5 I’s of Leadership (Steve ellis- Bain and Co.)
1. Inclusion: You have to include the people who are affected by your decisions, in the decision
making process.
2. Inquiry: You have to ask a lot of good questions to understand the situation, challenges and
opportunities. Ask, then listen deeply.
3. Insight: Use the answers to the questions to articulate a clear and compelling vision and
direction.
4. Influence: You have to communicate that compelling vision and direction with absolute clarity.
5. Incentives: You have to make sure you are continually rewarding the right behaviors and desired
outcomes.
4 Areas Where Senior Leaders Should Focus Their Attention

1. Decisions that move the needle. Don't waste energy talking about expense reports when you
should be talking about mergers and acquisitions or a new business line or a reorganization.
Incremental improvements are the purview of lower levels of management. One of my clients,
the CEO of a company with revenues of a billion dollars, likes to measure this is by the number
of zeros involved. Are we talking about a $500,000 decision or a $5,000,000 decision? If there
aren't enough zeros, the decision isn't strategic enough and shouldn't absorb senior leadership
time. Senior leadership should be focused on fundamentals, not incrementals.
2. The big arrow. Think of your company as one big arrow that contains lots of little arrows —
projects, businesses, clients, business deals. The big arrow is your company's culture, strategic direction,
core competencies, and core values. The CEO and his or her leadership team own that big arrow. The
problem is that, often, the little arrows point in different directions as people solidify their silos, bicker
amongst themselves, and neglect the larger mission. Senior leaders have the responsibility to make
decisions and act in ways that break through silos and align everyone with the strategic and cultural
direction of the company. That's how they can ensure all the arrows will be shooting in the same
direction.
3. The next level of leadership. One of the most important roles of the most senior leaders is to
engage the up-and-coming leaders, fostering their leadership and decision-making. That's how a
company grows. Talking about the next level of leadership, developing succession plans, pushing
decisions to that level, including them in strategic discussions — those efforts are high return.
4. Undiscussables. Talking about the thing that no one is talking about is an almost foolproof way
to improve company performance. Maybe it concerns another leader or maybe it has to do with the
performance of a certain division. Maybe it's about the CEO's leadership style or a lack of trust among
the senior team. Whatever it is, the mere fact that it's important and not being discussed is a solid
indication that it's holding the organization back.
“One of the hardest things for a manager is to reach a threshold of self-confidence where being simple
is comfortable.” ~Jack Welch
9 Values of GE Leaders
1. Are passionately focused on driving customer success.
2. Live SIx Sigma quality...ensure that the customer is always its first beneficiary...and use it to
accelerate growth.
3. Insist on excellence and are intolerant of bureaucracy.
4. Act in a boundaryless fashion..[and] always search for and apply the best ideas regardless of
their source.
5. Prize global intellectual capital and the people that provide it…[and] build diverse teams to
maximize it.
6. See change for the growth opportunities it brings...i.e., e-business.
7. Create a clear, simple, customer-centered vision...and continually renew and refresh its
execution.
8. Create an environment of “stretch” excitement, informality, and trust…..reward
improvement...and celebrate results.
9. Demonstrate….always for infectious enthusiasm for the customer...the 4-Es of GE Leadership:
The ENERGY to welcome and deal with the speed of change...the ability to create an

atmosphere that ENERGIZES others… the EDGE to make difficult decisions...and the ability to
consistently EXECUTE.
6 Traits of Leading CEOs
1. The best CEOs start with a view of the marketplace and instill an “outside-In” perspective into
the company.
o Spend more time with customers (up to 50% of your time). Make a commitment to
learn more about your customers.
o Create ongoing customer relationships.
o Involve customers early in the product development process.
o Get as many people inside the company involved in satisfying customers.
o Organize around the customer.
o Get the company to move with the responsiveness of a small company.
2. Exceptional CEOs have an “evangelical” leadership gene.
3. The effective business leader understands the critical role of culture, and how difficult it is to
bring about meaningful cultural change.
o The intangibles are more important than the tangibles because you can always imitate
the tangibles; you can buy the products, you can copy services. But the hardest thing for
someone to emulate is the spirit of your employee.
o If you create an environment where the people truly participate, you don’t need
control. They know what needs to be done and they do it. And the more that people will
devote themselves to your cause on a voluntary basis, a willing basis, the fewer
hierarchies and control mechanisms you need.
4. These CEOs create or adapt “Next Generation” products, processes, or solutions.
o Use every weapon in your arsenal to satisfy customer needs.
o Let the customer identify your achilles heel. Listen to what pains they have and
suggestions for your company.
o Invest in the future.
o Be a trend spotter.
o Incorporate lessons learned from your competitors into your own playbook. Make it a
habit of studying the competition each week and collecting new ideas.
5. They implemented the best ideas, regardless of their origin.
o You need to believe that you are a learning institution and constantly challenge
everything you have.
o Lead by example by importing the best ideas into your organization.
o Reward the employees who bring the best ideas.
o Celebrate new ideas.
o Learning is emphasized and valued. People are expected to learn constantly.
o Implement a best practices program- importing the best ideas should be a process, not
simply a mind-set.
o Establish processes and an infrastructure for converting learning into results.
o Listen to alarmists.
o Examine and be skeptical about the data.
6. They advance the leadership body of knowledge in some meaningful fashion.

o To see what can happen in the next ten years, look at what has happened in the last ten
years.
o Picture your business as a 3-legged stool. Each leg represents a critical component
which, in support of the other legs, keeps the business upright. Whenever one of the
legs comes up shorter than the others, the business wobbles.
o Ask yourself what would happen if you were kicked out of the company and a new
leader was brought in in your place- What would he do to solve the problem? Then, take
that answer, walk out the door, then come back in a put it into action.
o Despise complacency. A healthy amount of fear should exist in an organization to
mitigate this issue of complacency.
“You have to pretend you’re 100% sure. You have to take action; you can’t hesitate or hedge your
bets. Anything less will condemn your actions to failure.” ~Andy Grove- Intel CEO
“The most important role of managers is to create an environment in which people are passionately
dedicated to winning in the marketplace” ~Andy Grove- Intel CEO
“The internet is like a weapon sitting on a table ready to be picked up by either you or your
competition.” ~Michael Dell- Dell CEO
“Our behavior is driven by a fundamental core belief; the desire, and the ability, of an organization to
continuously learn from any source, anywhere; and to rapidly convert this learning into action is its
ultimate competitive advantage.” ~Jack Welch- GE CEO
“As a leader, it’s your job to remove roadblocks to productivity.” ~Jack Welch- GE CEO
“Most companies don’t die because they are wrong; most die because they don’t commit themselves.
They fritter away their momentum and their valuable resources while attempting to make a decision.
The greater danger is in standing still.” ~Andy Grove- Intel CEO
“I attribute Intel’s ability to sustain success to being constantly on the alert for threats, either
technological or competitive in nature.” ~Andy Grove- Intel CEO
“The dilemma is that you can’t suddenly start experimenting when you realize you’re in trouble unless
you’ve been experimenting all along. It’s too late to do things once things have changed your core
business. Ideally, you should have experimented with new products, technologies, channels,
promotions, and new customers all along.” ~Andy Grove- Intel CEO
“Most everything I’ve done I’ve copied from someone else.” ~Sam Walton- Walmart CEO
“Don’ major in the minor.” ~Mellody Hobson- This essentially means, don’t try to be great at the small
things that don’t provide a lot of leverage as a manager. Focus on the major issues that only you have
the ability to affect.
Be a mini-CEO
As a manager, of any sort, you are in effect a chief executive of an organization yourself. Don’t wait for
the principles and the practices you find appealing or valid to be imposed from the tp. As a micro-CEO,

you can improve your own and your group’s performance and productivity, whether or not the rest of
the company follows suit.
Remove defects at lowest value stage
A common rule we should always try to heed is to detect and fix any problem in a production process at
the lowest-value stage possible. Thus, we should find and reject the rotten egg as its being delivered
from our supplier rather than permitting the customer to find it.
What do we need to master?
Instead of asking what your company does best today, you should ask, “what do we need to master
today, and what will we need to master in the future, in order to excel on the trajectory of improvement
that customers will define as important?
Cultivate Peak Performance
Companies that cultivate an environment that allows for peak individual performance are rewarded
with peak company performance. Profits and personal happiness are best achieved when not aiming
directly for them. They are the result of a collection of other activities that inspire your employees and
yourself to a consciousness of the interdependencies we have with each other.
“As for the best leaders, the people do not notice their existence. The next best, the people honor and
praise. The next, the people fear; and the next the people hate…. When the best leader’s work is done
the people say, “We did it ourselves!”
“ We simply need to look at reality and think logically and precisely about what we see. The key
ingredient is to have the courage to face inconsistencies between what we see and deduce and the
way things are done. This challenging of basic assumptions is essential to breakthroughs.” ~Eli
Goldratt
3 Questions to create change
1. What to change
2. What to change to
3. How to cause the change
5 Management Lessons from Steve Ballmer
1. See the big picture. You'd better see enough of the landscape to say, 'We're going to take this,
and we're going to make money, and we're going to have great innovation for that.
2. Talent is only one part of success. It's not like you want to say, Hey, look, I've hired three of the
best people, and I'm just going to leave them completely alone, and then great things are going
to happen," Ballmer said. "You have to mesh them with other people. You've got to mesh them
with yourself. People selection is key, moving people on is key, and not viewing people as
individuals, sort of artisans to be left alone, in any job, in any one of the jobs.
3. Reevaluate, reevaluate, reevaluate. There is no single business model that's perfect for every
company or every era. CEOs in all areas need to remain vigilant and rigorous when it comes to
evaluating and adjusting their models.
4. Bet for the short and long terms. Every company has a long cycle and a short cycle, Ballmer
said. "Getting the big things right that make all the money, that's long cycle," he said. But "really
executing in a way that allows you to do it, that's short cycle. Some products have short cycle
rhythms; others have long cycle rhythms. Speed isn't everything, Ballmer said. Instead, a chief

executive's focus needs to be on "determining correct cadence of strategy, correct cadence of
engineering, and correct cadence of execution.
5. Know your limits. I obviously understand the business stuff better than the technology stuff,"
Ballmer concluded. But "I've grown, and when you grow, you say, 'Wow, I didn't know what I
didn't know.'"
What is Execution?
Execution is a systematic process of rigorously discussing hows and whats, questioning, tenaciously
following through, and ensuring accountability. It includes making assumptions about the business
environment, assessing the organization's capabilities, linking strategy to operations and people who are
going to implement the strategy, synchronizing those people and their various disciplines, and linking
rewards to outcomes. In the most fundamental sense, execution is a systematic way of exposing reality
and acting on it.
Look for deviations from desired managerial tolerances
Leaders who execute well look for the gap between desired and actual outcomes in everything from
profit margins to the selection of people for promotion. Then they move to close the gap and raise the
bar still higher across the whole organization.
“Leaders who execute focus on a very few clear priorities that everyone can grasp. Why just a few?
First, anyone who thinks through the logic of a business will see that focusing on three or four
priorities will produce the best results from the resources at hand.” ~Larry Bossidy , CEO of Honeywell
7 Essential Leadership Behaviors for Execution
1. Know your people and your business
2. Insist on realism
3. Set clear goals and priorities
4. Follow Through
5. Reward the doers
6. Expand people’s capabilities
7. Know yourself
“High managerial productivity depends largely on choosing to perform tasks that possess high
leverage.” ~Andy Grove, Intel CEO
Managerial Output
A manager’s output is measured by the output of the team he manages. By analogy, a coach or
quarterback alone does not score touchdowns and win games. Entire teams with their participation and
guidance and direction do.

“How you handle your own time is, in my view, the single most important aspect of being a role model
and leader.” ~Andy Grove, Intel CEO
Managerial Leverage
The art of management lies in the capacity to select from the many activities of seemingly comparable
significance the one or two or three that provide leverage well beyond the others and concentrate on
them.
The Key to Delegation
Delegation without follow through is abdication. You can never wash your hands of a task. Even after
you delegate it, you are still responsible for its accomplishment, and monitoring the delegated task is
the only practical way for you to ensure a result. Monitoring the results of delegation resemble the
monitoring used in quality assurance. We should apply quality assurance principles and monitor at the
lowest added-value stage of the process. For example, review rough drafts of reports that you have
delegated; don't wait until your subordinates have spent time polishing them into final form before you
find out that you have a basic problem with content.
Planning: Today’s Actions for Tomorrow’s Output
Your general planning process should consist of analogous thinking. Step 1 is to establish projected need
or demand: What will the environment demand from you, your business, or your organization? Step 2 is
to establish your present status: What are you producing now? What will you be producing as your
projects in the pipeline are completed? Put another way, where will your business be if you do nothing
different from what you are now doing? Step 3 is o compare and reconcile steps 1 and 2. Namely, What
more (or less) do you need to do to produce what your environment will demand?
Before an executive can think of tackling the future, he must be able to therefore dispose of the
challenges of today in less time and with greater impact and performance. For this he needs a
systematic approach to today’s job.
Gap Analysis
In planning, gap analysis consists of undertaking new tasks or modifying old ones to close the gap
between your environmental demand and what your present activities will yield. The first question is,
what do you need to do to close the gap? The second is, what can you do to close the gap? Consider
each question separately, and then decide what you actually will do, evaluating what effect your actions
will have on narrowing the gap, and when. The set of actions you decide upon is your strategy.
Two ways to get more out of your employees
1. Training: You can train your staff to be more productive and effective with their available time.
2. Motivation: While motivation has to come from within a person, a managers job is to create an
environment in which motivated people can flourish.
The 4 Ps of Business Leadership (via Alan Mulally, CEO of Ford)
1. People: This includes people inside and outside the organization.
2. Product: The things an organization creates to sell in their given market.
3. Process: The way things are done within the organization to create , deliver, and support
product.
4. Performance: The measures used to manage people, product, and process.

Questions to ask about change that happens today, that may impact the future
 What does this change mean for us?
 What does it mean for employment and labor force?
 What does it mean in terms of new markets?
 How does it change the basic structure of the American market?
 What does it mean for our customers?
 What does it mean for our products?
 What does it mean for our entire business posture?
 Is anything happening in the structure of an industry that indicates a major change?
7 Things I wish I’d known before starting a business (Gary Swart)
1. It’s About the People
So much of your success as a leader and ultimately of the company is attributed to the team. Nothing is
more important than knowing what type of culture you want to build and then hiring team members
with the right core values.
I know that you’ve heard this before, but have you taken measures to ensure that you are building the
right team? Have you identified the must-have values for your company, and are you properly
interviewing for these core values?
One of the most rewarding contributions in my career has been hiring great talent and setting them up
to be successful. At the end of the day, great people want to work with great people, and you will
struggle to attract and build a phenomenal company with B talent.
2. It’s Not All About the People
I know I said that nothing was more important than having the right people in place. However, even the
best team with the best product will fail if its market does not exist. Venture capitalist Marc Andreessen
says that product-market fit (a term he is said to have coined) is one of the most important factors he
considers when evaluating startups.
At one of my companies, we did not achieve product-market fit. Every customer was asking for
something different, and we gave it to them. We had six markets with 40 different types of customers,
and in hindsight, we should have developed just one really good product. We couldn’t be all things to all
people—and by failing to declare our major, we created a world of chaos for our sales, product and
marketing teams.
Even if you do have product-market fit, you will not get very far if the market is not big enough. To
determine whether you fall into that category, ask yourself if the market you’re targeting is sizable
enough to allow for pervasive adoption of your product and exponential growth.
3. Focus, Focus, Focus
Focus and simplicity are often more difficult to achieve than building features on top of features on top
of features. As a result, too many startups are unfocused. The time required to trim back an idea is not
insignificant—said best by Mark Twain: “If I had more time, I would have written a shorter letter.”
In order to succeed, a startup needs to do one or two things exceptionally well; some of the greatest
products today don’t have a million bells and whistles, but they solve one concrete problem brilliantly.

In the early days of oDesk, we took the minimum-viable-product approach using people behind the
scenes to power the service before we built additional features. This gave us the opportunity to prove
that customers not only wanted the functionality, but also that they were willing to pay for it.
By keeping it simple, measurable and achievable, you’ll be well on your way. Everyone at your company
should be able to articulate the goal of your business, enabling a dogged, unyielding focus on that goal
throughout the organization.
4. Over-Communicate Your Strategy and Priorities
I spent a lot of my time as a CEO focused on building a culture and an environment where everyone
could do their best work. Once you have the right team in place, a good leader can improve the
organizational climate by providing clarity as to where their team is going, how they will get there, clear
definition of roles and responsibilities, and standards to measure progress.
You can’t underestimate the importance of not only defining, but also communicating these priorities to
the team. We surveyed the team to assess our culture at oDesk, and I was shocked to learn that some of
the team members did not think we had a clear and inspiring vision. Others were not clear on priorities,
despite the fact that I would reinforce these messages regularly. Once I got over the shock and
disappointment, I was able to address our issues by providing more clarity of our messaging and then
cascading it down through each of the VPs, Directors and Managers in the company.
5. Validate Your Market With Your Customers
Once you have determined product-market fit, a common mistake among entrepreneurs is seeking
validation of their ideas and decisions from investors and others. The most important people any
company should seek validation from are their customers. That’s right, your customers matter more
than your investors—and any good investor would agree.
Do not ignore yellow lights coming from your early adopters, because their activity indicates a
momentum shift. Spend time understanding all aspects of the customer value proposition.
I once heard Guy Kawasaki talk about his 10-times rule—in order for people to switch and buy your new
thing, your product doesn’t need to be perfect, it just needs to be 10-times better than the alternative.
Think about the 10-times rule and ask yourself: Why should your customer buy your product? How does
your product fit into the rest of his or her world? What influences their opinion of the product’s value?
What is your product displacing—all products displace something—and why should your customer risk
making that switch? You need to be as knowledgeable about your customer and their needs as you are
conversant with your own product.
6. Determine Streamlined Metrics to Measure Your Progress
I once had a board member tell me that we were over-measured and under-prioritized. It stung. A lot.
But it also made quite an impression.
As a business leader, you need to figure out the metric that matters most for your company and
understand that the more you measure, the less prioritized you’ll be. Don’t fall into the trap of trying to
measure everything. What I’ve learned is that, in the early days, what matters most is having customers
who love and use your product. Figure out the one or two best measures to determine this.
7. Aim to Exceed Expectations

Your goal should not be meeting your customers’ expectations; it should be exceeding them. Truly great
and memorable products surprise and delight their customers, so don’t be afraid to spend the time and
money to build an exceptional product. But don’t let this pursuit inflate your product’s ego—making
promises you cannot keep will leave you surrounded by disappointed customers, investors and
employees.
I cannot emphasize how important it is in the long run to over-deliver to your customers. Customers
come to restaurants for a great overall dining experience, but the food is the baseline. They come back if
the service and experience exceed their expectations. It’s the same with any business—the product
fulfills a need, but it’s the experience that brings people back. Think about the product you’re selling,
and think about where you see it going. Now take a step back and ask yourself the most important
question of all—how do customers feel when they are using the product, and will that feeling keep them
coming back?
Mark Twain also said, “History doesn’t repeat itself, but it does rhyme.” These learnings were extremely
informative for me over my career, as similar challenges arose in the course of building a number of
businesses. I’m looking forward to sharing more insights with startup founders and teams when I join
Polaris Partners in September as a West Coast Venture Partner. These challenges await every startup.
And the more we can teach one another, the better off we will all be.
“As CEO, I don't focus on financial success. That's a byproduct. Instead, I focus on competitive
advantage: the thing that made people walk past 20 restaurants to get to ours. But you can't just
manufacture that. So I think about, How do I create an experience that is more enjoyable for
customers? My job is to get this company ready for the future. It starts with observation and research:
understanding what matters to people and what they will want five years from now. I did that with
Panera Cares and with Panera 2.0.” ~Panera Bread CEO
“Creating BELIEF is the X factor of leadership.” ~Colonel B.P. McCoy- United States Marines
What do I want others to say about us?
When other people talk about my team, what do I want them to say? What are the key attributes I want
them to be known for? How would they describe us? (This should shape our values). On the flip side,
what would I not want them to say about us?
“Be a relentless broken record about the things that are important and that communicate the results
you want.” ~Colonel B.P. McCoy- United States Marines
“A leader votes with his time. If something is important, your calendar should clearly reflect that
thing.” Colonel B.P. McCoy- United States Marines
Say-Do Gap
The say-do gap is the distance and difference between what you say you will do and what you actually
do. Be mindful of this.
BUSINESS BASICS

5 Components of Successful Business
Every successful business (1) creates or provides something of value that (2) other people want or need
(3) at a price they’re willing to pay, in a way that (4) satisfies the purchasers need and expectations and
(5) provides the business sufficient revenue to make it worthwhile for the owners to continue operation.
Merchants Give Products Life
They take the ordinary- a shoe, a knife - and give it new life, believing that what we create has the
potential to touch others’ lives because it touched ours. They take something ordinary and infuse it
with emotion and meaning, and then tell its story over and over again, often without saying a word. A
merchants success depends on their ability to tell a story.
5 Core Business Functions
1. Value Creation: Discovering what people need or want, then creating it.
2. Marketing: Attracting attention and building demand for what you created.
3. Sales: Turning prospective customers into paying customers.
4. Value Delivery: Giving your customers what you’ve promised and ensuring that they’re satisfied.
5. Finance: Bring in enough money to keep going and make your effort worthwhile.
Sustainable Growth
If the 5 core business functions grow out of control or out of proportion to one another, the situation
can threaten the health of the organization.
Iron Law of the Market
Market matters most; neither a stellar team nor a fantastic product will redeem a bad market. Markets
that don’t exist don’t care how smart you are.
Revenue= People wanting your stuff x them willing to pay for it
Your revenue is completely dependant on people actually wanting what you have to offer.
10 Ways to Evaluate a Market (see page 45 in personal mBA)
7 Simple Numbers that Can Grow Your Business (entm.ag/179bPp9)
1. Customer Lifetime Value
2. Customer Acquisition Cost
3. Conversion Rates
4. Average Dollar Sale
5. Response rates
6. Lead-to-sale ratio
7. Touches to sale
20 of the smartest things Jeff Bezos ever said
1. "All businesses need to be young forever. If your customer base ages with you, you're Woolworth's."
2. "There are two kinds of companies: Those that work to try to charge more and those that work to
charge less. We will be the second."

3. "Your margin is my opportunity."
4. "If you only do things where you know the answer in advance, your company goes away."
5. "We've had three big ideas at Amazon that we've stuck with for 18 years, and they're the reason
we're successful: Put the customer first. Invent. And be patient."
6. "I very frequently get the question: 'What's going to change in the next 10 years?' And that is a very
interesting question; it's a very common one. I almost never get the question: 'What's not going to
change in the next 10 years?' And I submit to you that that second question is actually the more
important of the two -- because you can build a business strategy around the things that are stable in
time. ... [I]n our retail business, we know that customers want low prices, and I know that's going to be
true 10 years from now. They want fast delivery; they want vast selection. It's impossible to imagine a
future 10 years from now where a customer comes up and says, 'Jeff I love Amazon; I just wish the
prices were a little higher,' [or] 'I love Amazon; I just wish you'd deliver a little more slowly.' Impossible.
And so the effort we put into those things, spinning those things up, we know the energy we put into it
today will still be paying off dividends for our customers 10 years from now. When you have something
that you know is true, even over the long term, you can afford to put a lot of energy into it."
7. "If you're not stubborn, you'll give up on experiments too soon. And if you're not flexible, you'll pound
your head against the wall and you won't see a different solution to a problem you're trying to solve."
8. "Any business plan won't survive its first encounter with reality. The reality will always be different. It
will never be the plan."
9. "In the old world, you devoted 30% of your time to building a great service and 70% of your time to
shouting about it. In the new world, that inverts."
10. "We've done price elasticity studies, and the answer is always that we should raise prices. We don't
do that, because we believe -- and we have to take this as an article of faith -- that by keeping our prices
very, very low, we earn trust with customers over time, and that that actually does maximize free cash
flow over the long term."
11. "The framework I found, which made the decision [to start Amazon in 1994] incredibly easy, was
what I called a regret minimization framework. I wanted to project myself forward to age 80 and say,
'OK, I'm looking back on my life. I want to minimize the number of regrets I have.' And I knew that when
I was 80, I was not going to regret having tried this. I was not going to regret trying to participate in this
thing called the Internet that I thought was going to be a really big deal. I knew that if I failed, I wouldn't
regret that. But I knew the one thing I might regret is not ever having tried. I knew that that would haunt
me every day."
12. "We innovate by starting with the customer and working backwards. That becomes the touchstone
for how we invent."
13. "When [competitors are] in the shower in the morning, they're thinking about how they're going to
get ahead of one of their top competitors. Here in the shower, we're thinking about how we are going to
invent something on behalf of a customer."

14. "A company shouldn't get addicted to being shiny, because shiny doesn't last."
15. "I think frugality drives innovation, just like other constraints do. One of the only ways to get out of a
tight box is to invent your way out."
16. "If you double the number of experiments you do per year, you're going to double your
inventiveness."
17. "If you never want to be criticized, for goodness' sake don't do anything new."
18. "If you're long-term oriented, customer interests and shareholder interests are aligned."
19. "Invention requires a long-term willingness to be misunderstood. You do something that you
genuinely believe in, that you have conviction about, but for a long period of time, well-meaning people
may criticize that effort. When you receive criticism from well-meaning people, it pays to ask, 'Are they
right?' And if they are, you need to adapt what they're doing. If they're not right, if you really have
conviction that they're not right, you need to have that long-term willingness to be misunderstood. It's a
key part of invention."
20. "You want to look at what other companies are doing. It's very important not to be hermetically
sealed. But you don't want to look at it as if, 'OK, we're going to copy that.' You want to look at it and
say, 'That's very interesting. What can we be inspired to do as a result of that?' And then put your own
unique twist on it."
“I strongly believe that if we protect, preserve, and enhance the experience to the point where we
really demonstrate the relationship we have with our customers is not based on a transaction, that
we’re not in the fast food business, and then let the coffee speak for itself, we’re going to win.” ~
Howard Schultz- Starbucks CEO
Results are created outside the business
Results depend not on anybody within the business nor on anything within the control of the business.
They depend on somebody outside- the customer in a market economy, the political authorities in a
controlled economy. It is always somebody outside who decides whether the efforts of a business
become economic results or whether they become so much waste and scrap.
Results are obtained by exploiting opportunities, not by solving problems.” ~Peter Drucker
Concentration is key to economic results
Economic results require that managers concentrate their efforts on the smallest number of products,
product lines, services, customers, markets, distributive channels, end-uses, and so on, that will produce
the largest amount of revenue. Economic results require that staff efforts be concentrated on the few
activities that are capable of producing significant business results.
Three questions that will bring out hidden potential of a business

Dangers and weaknesses indicate where to look for business potential. To convert them from problems
into opportunities brings extraordinary returns. And sometimes all that is needed to accomplish this
transformation is a change in the attitude of the executives.
1. What are the restraints and limitations that make the business vulnerable, impede its full
effectiveness, and hold down its economic results?
2. What are the imbalances of the business?
3. What are we afraid of, what do we see as a threat to this business- and how can we use it as an
opportunity?
COMMUNICATION
“The best words are never big or complicated, but are packed with emotion and meaning, leaving no
question of what is expected of myself and others.”- Howard Schultz (Starbucks CEO)
Focus on the ‘Why’
When you want people to get excited about your company, whether it's an investor, a potential partner,
customer, or even your employee, you need to explain exactly what your company does, but you should
really focus your presentation on why your company does it.
Simplicity, Consistency, and Repetition
If you have a simple, consistent message, and you keep repeating it, eventually that’s what happens. It’s
a steady continuum that finally reaches a critical mass.
Curse of Knowledge
When you know something, it becomes hard to imagine not knowing it. As a result, we become lousy
communicators. Remove yourself from the knowledge to communicate clearly to those without it.
It’s not what you say, it’s how you say it
Think of how the other person (receiver) will hear what you are saying.
Speak Candidly
 Candor gets more people in the conversation, and when you get more people in the
conversation, to state the obvious, you get idea rich. More ideas get surfaced, discussed, pulled
apart, and improved.
 Candor generates speed. When ideas are in everyone’s face, they can be debated rapidly,
expanded and enhanced, and acted upon. The approach is Surface, Debate, Improve, and
Decide.
 Candor cuts costs. You may never be able to put a precise number on it, but it eliminates
meaningless meetings and b.s. reports that confirm what everyone already knows.
Assertive Inquiry
To create productive dialogue, this approach blends the explicit expression of your own thinking
(advocacy) with a sincere exploration of the thinking of others (inquiry). In other words, it means clearly
articulating your own ideas and sharing the data and reasoning behind them, while genuinely inquiring
into the thoughts and reasoning of your peers. The stance that needs to be taken to accomplish this

effectively is, “I have a view worth sharing, but I may be missing something”. This approach includes
three key tools:
1. Advocating your own position and then inviting responses. (e.g., “This is how I see the situation,
and why; to what extent do you see it differently?”).
2. Rephrasing what you believe to be the other person’s view and inquiring as to the validity of
your understanding. (e.g., “It sounds to me like your argument is this; to what extent does that
capture your argument accurately?”)
3. Explaining a gap in your understanding of the other person’s views, and asking for more
information. (e.g., “It sounds like you think this acquisition is a bad idea. I’m not sure I
understand how you got there. Could you tell me more?”)
Seek First to Understand, Then to be Understood
Share your company's accomplishments regularly
Keep a list of all of your company's accomplishments and read the list every chance you get.
Don't write emails while upset
If you get an email that evokes negative emotions. STOP. Do not respond while angry or upset. You
never want to write something in email that could come back to haunt you later, or that you didn’t quite
mean everything you said in the heat of the moment.
Don’t have sensitive and really important conversations through email.
Just as the above note suggests, you also do not want to write extremely important information in
emails without first talking with someone face to face. Its always best to be able to see the other
person's emotions and reactions so you can tailor your message accordingly. Once it's in writing, you
can't’ take it back.
Prepare
Know your topic, and know what outcome you want from a conversation of presentation. everything
you say should be focused on that outcome and encourage your audience to go with you to that
destination. Anticipate the questions your audience will ask you- Be prepared to fire back concise and
specific answers.
Give your ideas names or overarching themes
To make your ideas or initiatives easy to remember, give them memorable names. Even small projects
or activities in the office can be named for better reference. You need an overarching theme to create
change and break through the wall of communication overload.
How do you stop the festering dead in its tracks?
Take three deep breaths, stop overanalyzing things, stop thinking, and make the damn call. A three-
minute call today, now, to deal with a slightly bruised ego or a minor misunderstanding can go a long
way toward helping you avoid a trip to divorce court, the loss of a billion-dollar client, or employee
lawsuit.
Inverted Pyramid

The inverted pyramid is a metaphor used by journalists and other writers to illustrate the placing of the
most important information first within a text.
PRESENTATIONS
You are judged as much on appearance as you are on substance.
Stand up
Stand up when anybody comes to see you if you are already sitting down.
"You can understand your business strategy with one quick look at your weekly calendar”.
At that moment, I took a look at my weekly calendar on my phone, and saw it was filled up with
meetings and phone calls with people I didn't know, who would likely make no difference to my
business.”
STRATEGY
“The essence of strategy is choosing what not to do”. ~Michael Porter
“Strategy is the way you navigate your competitive landscape using the assets at your disposal”.
~Mike Gamson, SVP LinkedIn
“The key to competitive success lies in an organizations ability to create unique value. Aim to be
unique, not the best. Creating value, not beating rivals, is at the heart of competition. The point of
competition is to earn profits”. ~Michael Porter
Strategic Beliefs
Strategic beliefs are big beliefs on how things will change, markets will develop, technology will shift,
etc. If you can establish strategic beliefs, and get buy-in on them from your company, you can test,
iterate, innovate, and fail towards them. This, instead of necessarily plotting an exact strategic plan with
details that may or may not matter.

How to Create A Compelling Strategy Narrative
For a narrative to guide strategic choices within a company, it must be coherent, plausible and
acceptable to most key stakeholders in the organization.
To create a coherent strategic narrative, ask yourself:
 Does this narrative offer a view of the future that can be made consistent with understandings
of our company’s past and our concerns in the present?
 Does this narrative connect the past, present and future in ways that make sense?
To make the narrative plausible, ask yourself:
 Does this narrative address important aspects of the external environment, including market
and technological changes?
 Does it offer our company a distinctive competitive position?
 Does the narrative provide a reasonable response to competitors’ actions?
 How well does this narrative take into account our company’s existing resources and
capabilities?
To create a narrative that will be acceptable within the organization, ask yourself:
 Will this narrative bring people in the company together and reduce conflict?
 Will this narrative resonate with all -- or at least most -- of the key stakeholders in the
organization?
Hedgehog Concept
 Hedgehogs simplify a complex world into a single organizing idea, the basic principle or concept
that unifies and guides everything. It doesn't matter how complex the world, the hedgehog
reduces all challenges and dilemmas to simple - indeed almost simplistic- hedgehog ideas.
 Foxes pursue many ends at the same time and see the world and all its complexity. They are
scattered or diffused, moving on many levels, never integrating their thinking into one overall
concept or unifying vision.

Focus on your core value prop until you hit critical mass
 Describe, in the clearest terms possible, what your core value proposition is for your business
(center of bullseye). Once you’ve defined your core, you need to stick to it with unwavering
focus. All management cycles should be spent in this bullseye. There is extreme power in focus,
and fewer things done better.
 Each concentric circle around the bullseye represents an extension of your core. DO not move
on to these extensions until you’ve reached critical mass on your core. Do not take resources
from the core to attack the extensions.
Permanent Excellence Does Not Exist
Research shows that there are no permanently excellent companies, just as there are no permanently
excellent industries.
The 5 Questions Strategy Driving Questions
1. What is your winning aspiration?
a. The purpose of your enterprise, its motivating aspiration.
2. Where will you play?
. The playing field(s) where you can achieve that aspiration.
3. How will you win?
. The way you will win on the chosen playing field.
4. What capabilities must be in place?
. The set and configuration of capabilities required to win in the chosen way.
5. What management systems are required?
. The systems and measures that enable the capabilities and support the choices.
Five Tests of a Good Strategy
1. A distinctive value proposition
2. A tailored value chain
3. Trade-offs different from rivals

4. Fit across value chain
5. Continuity over time
Three Questions to Define Value Proposition
1. Which Customers?
a. What end users
b. what channels
2. Which Needs?
. Which products?
a. Which features?
b. Which Services?
3. What relative price?
. Premium?
a. Discount?
“If you have a strategy, you should be able to link it directly to your P&L. “ Michael Porter.
Trade-Offs
Flexibility in the face of uncertainty may sound like a good idea, but it means that your organization will
never stand for anything or become good at anything. Too much change can be as disastrous for
strategy as too little.
Sustainable Competitive Advantage
To determine how to win in your business and market, organizations must decide what will enable them
to create unique value and sustainably deliver that value to customers in a way that is distinct from the
firms competitors. The competitive advantage- The specific way a firm utilizes its advantages to create
superior value for a customer and in turn, superior returns for the firm.
Core Capabilities
An organization's core capabilities are those activities that, when performed at the highest level, enable
the organization to bring its where-to-play and how-to-win choices to life. They are best understood as
operating as a system of reinforcing activities. Power and sustainable competitive advantage is unlikely
to arise from any one capability (e.g., having the best sales force in the industry), but rather from a set
of capabilities that both fit with one another (i.e., that dont conflict with one another) and actually
reinforce one another (i.e., that make each other stronger than they would be alone). See ‘hedgehog
concept’.
When thinking about capabilities, you may be simply tempted to ask what you are really good at and
attempt to build a strategy from there. The danger of doing so is that the things you’re currently good at
may actually be irrelevant to consumers and in no way confer a competitive advantage. Rather that
starting with capabilities and looking for ways to win with those capabilities, you need to start with
setting aspirations and determining where to play and how to win.
Activity System
This is a visual representation of the firms competitive advantage, capturing on a single page the core
capabilities of the firm. Articulating a firm's core capabilities is a vital step in the strategy process.
Identifying the capabilities required to deliver on the where-to-play and how-to-win choices crystallizes
the area of focus and investment for the company. It enables a firm to continue to invest in its current

capabilities, to build up others, and to reduce the investment in capabilities that are not essential to the
strategy.
Value Chain
The sequence of activities your company performs to design, produce, sell, deliver, and support its
products is called the value chain. In turn, your value chain is part of a larger value system. The value
chain is a powerful tool for disaggregating a company into its strategically relevant activities in order to
focus on the sources of competitive advantage, that is, the specific activities that result in higher prices
or lower costs.
Base your strategy on things that won't change
3 Keys of Strategy
1. clarify key value drivers
2. Identify the critical few challenges/obstacles (internal and/or external)
3. determine must-win battles
To make a program strategic, put it at the top of every agenda. Make asking about it your
first question in every conversation
Choice
When choice is limited, value is often destroyed. As a customer, you are either paying too much for
extras you don't want, or you are forced to make do with what’s offered, even if its not what you really
need.
The Five Forces of Competitive Advantage (industry structure)

OGSM (objectives, goals, strategies, and measures)
[insert OGSM sample diagram]
Define the Most Important Moments of Truth, and Win Them
Think through the various moments of truth your customers experience and plot them on a graph. Then
figure out how you can create WOW interactions at each moment of truth. The ultimate goal being to
create a completely satisfied customer and one who will tell others about your brand.
Blue Ocean Strategy
Blue Ocean Strategy challenges companies to break out of the red oceans of bloody competition y
creating uncontested market space that makes the competition irrelevant. Instead of dividing up
existing - and often shrinking- demand and benchmarking competitors, blue ocean strategy is about
growing demand and breaking away from the competition. Although some blue oceans are created well
beyond existing boundaries, most are created from within red oceans by expanding existing industry
boundaries, as Cirque du Soleil did.

Cirque du Soleil’s Strategy Example
It did not win by taking customers from the already shrinking circus industry, which historically catered
to children. Instead, it created uncontested new market space by appealing to a whole new group of
customers: adults and corporate clients prepared to pay a price several times as great as traditional
circuses for an unprecedented entertainment experience. Cirque du Soleil succeeded because it realized
that to win in the future, companies must stop competing with each other. The only way to beat the
competition is to stop trying to beat the competition.
Instead of following the conventional logic of outpacing the competition by offering a better solution to
the given problem- creating a circus with even greater fun and thrills- it sought to offer people the fun
and thrill of the circus AND the intellectual sophistication and artistic richness of the theatre at the same
time; hence it redefined the problem itself. By breaking the market boundaries of theater and circus,
Cirque du Soleil gained a new understanding not only if circus customers but also of circus non-
customers: adult theater customers.
Industries Do Not Stand Still
Industries are continually evolving, operations are improving, markets are expanding, and players are
coming and going. All this is happening at an even more rapid pace as years pass.
Value Innovation
Value Innovation is created in the region where a company’s actions favorably affect both its cost
structure and its value proposition to buyers. Cost savings are made by elimination and reducing the
factors an industry competes on. Buyer value is lifted by raising and creating elements the industry has
never offered. Over time, costs are reduced further as scale economies kick in due to the high sales
volumes that superior value generates.

The Simultaneous Pursuit of Differentiation and Low Cost
Instead of focusing on beating the competition, focus on making the competition irrelevant by creating a
leap in value for buyers and your company, thereby opening up new and uncontested market space.
Value innovation places equal emphasis on value and innovation. Value without innovation tends to
focus on value creation on an incremental scale, something that improves value but is not sufficient to
make you stand out in the marketplace. Innovation without value tends to be technology driven, market
pioneering, or futuristic, often shooting beyond what buyers are ready to accept and pay for.
Strategy Canvas
The strategy canvas is both a diagnostic and an action framework for building a compelling blue ocean
strategy. It serves two purposes. First, it captures the current state of play in the known market space.
This allows you to understand where the competition is currently investing, the factors the industry
currently competes on in products, service, and delivery, and what customers receive from the existing
competitive offerings in the market.

Four Actions Framework
There are four key questions to challenge the industry’s strategic logic and business model:
1. Which of the factors that the industry takes for granted should be eliminated?
2. Which factors should be reduced well below the industry's standard?
3. Which factors should be raised well above the industry's standard?
4. Which factors should be created that the industry has never offered?
Three Characteristics of good strategy
1. Focus: Refer to hedgehog concept above. This is simply an unwavering focus on what you
believe in and what sets you apart.
2. Divergence: This is where the company’s value curve completely diverges from the industry and
competition. Where you truly stand apart and cannot be touched.
3. Compelling Tagline: The tagline must embody the first two points, and be super simple for
customers to understand. They need to truly understand your ‘Why’, without question or
hesitation. Take Southwest Airlines for example, “The speed of a plane at the price of a car -
whenever you need it”.

Alternatives vs. Substitutes
Alternatives are broader than substitutes. Products or services that have different forms but offer the
same functionality or core utility are often substitutes for each other. On the other hand, alternatives
include products or services that have different functions and forms but take the same purpose.
Look for customer trade-offs
Customers often, and a lot of times subconsciously, make trade-offs on products or services, selecting
alternatives to the original option. Look for these trade-offs and see how you can marry the ‘purposes’.
Meaning, rather than focusing on the specific function or form, focus on what the customer is gaining
from the choice. Understand which factors determine a customer's’ decision to trade up or down from
one group to another.
Look Across Complementary Product and Service Offerings
Define the total solution buyers seek when they choose a product or service. A simple way to do so is to
think about what happens before, during, and after your product is used. Seek to Solve Major Pain
Points in the Customer's total solution. Take movie theatres for example. The ease and cost of getting a
babysitter and parking the car affect the perceived value of going to the movies. Yet these
complimentary services are beyond the bounds of the movie theater industry as it has been traditionally
defined. Few cinema operators worry about how hard it is to get a babysitter, but they should because it
affects the demand for their business.
“No wonder market research rarely reveals new insights into what attracts customers. Industries have
trained customers in what to expect. When surveyed, they echo back: more of the same for less”.
Functional vs. Emotional Appeal
Emotionally oriented industries offer many extras that add price without enhancing functionality.
Stripping away those extras may create a fundamentally simpler, lower priced, lower cost business
model that customers would welcome. Conversely, functionally oriented industries can often infuse
commodity products with new life by adding a dose of emotion and, in doing so, can stimulate new
demand.

Pioneers, Migrators, and Settlers
Pioneers: These are the businesses that offer unprecedented value. These are your blue ocean
strategists, and they are the most powerful sources of profitable growth. They have a mass following of
customers. Their value curve diverges from the competition on the strategy canvas.
Migrators: These businesses extend the industries curve by giving customers more for less, but they
don't alter its basic shape. These businesses offer improved value, but not innovative value. These are
businesses whose strategies fall on the margin between red oceans and blue oceans.
Settlers: These are the opposite of pioneers. Their value curves conform to the basic shape of the
industry's. These are me-too businesses. Settlers will not generally contribute much to a company’s
future growth. They are stuck within the red ocean.
Three Tiers of Non-Customers
1. First Tier: “Soon-to-be” non-customers who are on the edge of your market, waiting to jump
ship.
2. Second Tier: “Refusing” non-customers who consciously choose against your market.
3. Third Tier: “Unexplored” non-customers who are in markets distant from yours.
Tip: Non-customers tend to offer far more insight into how to unlock and grow blue ocean than do
relatively content existing customers.
Strategic Sequence
Companies need to build their strategy in the sequence of buyer utility, price, cost, and adoption.

Strategic Pricing- Price Corridor of the Mass

Target Costing
To maximize the profit potential of a blue ocean idea, a company should start with the strategic price
and then deduct its desired profit margin from the price to arrive at the target cost.
Keep the strategy-development period short

Notes from over 100 business books

Notes from over 100 business books

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Notes from over 100 business books

Similar to Notes from over 100 business books (20)

Recently uploaded

Recently uploaded (20)

Notes from over 100 business books