Book Review: Creative Project Management

Creative Project Management by Michael Dobson was the latest book I plucked from the local library. It was in a similar vein to my last read in that it was all about project management and given my recent career change this should surprise no one.

The book was a solid read and although it took me quite a while to make my way through it, I think that was more attributed to buying and remodeling a home than to the quality of the read. What I really liked about the book was the manner in which it illustrated fairly classic project management concepts. Instead of focusing on a few illustrations and concept diagrams, the book focused on well known (often military) leaders and how they successfully and unsuccessfully implemented project management throughout history. These historical events, viewed through a project management lens, did a lot to show how these concepts can be applied universally to projects instead of sticking with more generic examples of project management like IT implementations.

What I didn't necessarily love about the book was the way in which it dragged out relatively straight forward concepts. It wasn't that the length was the issue it was the fact that some of the concepts went into great storytelling depth with relatively little practical explanation. It almost felt like the second half of the book was filler to get the book to a certain length. Yet, taken in totality the book was a pretty solid.

Throughout the book there were great questions that every project manager should ask themselves and others regarding the project. The author even went so far as to compile these questions as an appendix at the end of the book. These questions are an extremely helpful guide in determining what elements of the project must be developed and at what stage they should be developed in order for the project to be successful. I enjoyed the way the author built the appendix so much that I copied the pages and plan on using them to help develop each stage of the projects that I manage. If anything, the book is worth picking up for that reason alone.

Notes:

Chapter 1 - Why Do 70% of Projects Fail:
- 32% of projects were delivered on time, on budget, and with the required features and functions
- 44% were finished either late, over budget, or only partially completed
- 24% failed altogether, and they were cancelled or abandoned
- Two reasons projects fail: 1. Things that nobody thought of or prepared for 2. Things everybody thought of but no one prepared for
- Four PM questions: 1. Why are we doing this? (Business Case) 2. Who has an interest & what do they want/need? (Human Being Aspect) 3. What do we have to do & how? (Project Management, Planning, Qualitative) 4. Who needs to be involved & in what way? (Top Management & Other Involvement)
- Embrace the uncertainty & fluidity of the projects you manage
- What makes this project hard? (chart pg 13) 1. Constraints - How tight are time, cost, performance? 2. Complexity - Tasks, resources, technology 3. Certainty - How much do we know about risks & issues?
- Risk = Probability X Impact
- Cognitive biases pg 18
- When work is temporary & unique the unique part guarantees the presence of uncertainty
- 2 ways of learning: 1. Have an experience and learn from it 2. Learn from someone else's experience (The second it cheaper!)

Chapter 2 - What We Know & What We Think:
- PMs are supposed to challenge assumptions whenever possible but we all have blind spots, biases, & perceptual errors that keep us from recognizing our own misjudgments
- Johari's Window test pg 28
- More PM questions: 1. What aren't we seeing correctly or at all? 2. How will people react to this project? 3. What if I'm wrong? 4. What am I not seeing?
- Ignaz Semmelweis hand washing theory pg 31
- Vietnam quote "Anybody who thinks he knows what's going on clearly doesn't understand the situation."
- Sewell Avery & General Patton project management stories
- "The fact that some geniuses were laughed at does not imply that all who are laughed at are geniuses. They laughed at Columbus, they laughed at Fulton, they laughed at the Wright brothers. But they also laughed at Bozo the Clown" - Carl Sagan

Chapter 3 - The Most Dangerous Word is a Premature Yes:
- "Plans are worthless, but planning is everything. There is a very great distinction because when you are planning for an emergency you must start with this one thing: the very definition of "emergency" is that it is unexpected; therefore it is not going to happen the way you are planning." - President Dwight D. Eisenhower, speech to the National Defense Executive Reserve Conference, Washington DC 1957
- First there is a mountain, then there is no mountain, then there is a mountain." Your first understanding of the mountain is an outline, a shape in the horizon. As you get closer the mountain decomposes into a million individual details. Finally you know the mountain as a whole. Zen koan.
- No one starts a war - or rather, no on in his senses ought to do so - without being first clear in his mind what he intends to achieve by that war and how he intends to conduct it." - Clausewitz
- A project isn't the end its the means to bridge the gap
- The first step in any project is to define the gap
- Eisenhower closing the gap story pg 55
- What is the minimum that can be done now?
- Project triage: 1. Likely to survive no matter what 2. Likely to fail no matter what 3. Projects where the level of effort will make a positive impact in success

Chapter 4 - Good Enough, Barely Adequate, Failure:
- 7 Levels of project outcomes: 1. Perfect 2. Outstanding 3. Exceeds Expectations 4. Fully Satisfactory 5. Barely Adequate 6. Failure 7. Catastrophe

Chapter  5 - When The Project Appears Impossible:
- "If an elderly and distinguished scientist says something is possible, he is almost certainly right; but if he says it is impossible, he is very probably wrong." - Arthur C. Clarke
- Just because a project appears to be impossible doesn't mean it is
- Can you adjust time, cost, performance to make it possible?
- Ways to accomplish the impossible project: 1. Change the constraints - analysis, negotiation, problem solving, requirements management 2. Get around the constraints - creativity, exploiting holes, different approaches, rethinking assumptions

Chapter 6 - Knowns & Unknowns: The Risk Factors:
- "The revolutionary idea that defines the boundary between modern times and the past is the mastery of risk: the notion that the future is more than a whim of the gods and that men and women are not passive before nature." - Peter L. Bernstein, Against the Gods: The Remarkable Story of Risk 1998
- Risk is a proposed future even that would have a significant impact on you or something you care about should it happen. Positive or negative. Above all risk is uncertain.
- Risk -> severity and likelihood
- Pure risk is all downside
- Business risk has upside and downside
- Residual risk is leftover risk after mitigation
- Secondary risk is new risk introduced as a result of solutions to the original risk
- Risk management table & responses pg 134
- Managing knowns & unknowns pg 138
- Six dimensions of project management table pg 149
- Leverage, relax, absorb = triple constraints risk responses

Chapter 7 - Project Intelligence:
- Spies pay attention to their environment
- Intelligence process - Collection, Analysis, Packaging, Dissemination

Chapter 8 - It Takes A Village To Wreck A Project:
- "Normal people believe that if it ain't broke don't fix it. Engineers believe that if it ain't broke, it doesn't have enough features yet." - Scott Adams, cartoonist, creator of Dilbert
- "Want to know if you are a leader? Look back and see if anyone is following." - Marilyn Moats Kennedy
- 4 types of managerial challenges - Martyr, Scapegoat, Hall Monitor, Peon
- 4 types of stakeholders - Positive, negative, tangential, conflicted
- 4 stages of managing stakeholders - Identify, Understand, Maximize, Manage
- There are 3 reasons to communicate: 1. You want someone to do something 2. You want someone to know something 3. You want someone to feel something or some combo of the 3
- Table page 88

Chapter 9 - Framing Change:
- I confess that in 1901 I said to my brother Orville that man would not fly for fifty years. Two years later we ourselves made flights. This demonstration of my impotence as a prophet gave me such a shock that ever since I have distrusted myself and avoided all predictions." Wilbur Wright
- Counterfactuals are examinations of what might have happened had an actual even turned out another way. A great way to analyze and cope with change

Chapter 10 - Salvaging Project Value:
- Closeout of a project is often taken for granted
- Closeout: 1. Complete 2. Turned Over 3. Closed Out 4. Value Captured

- Appendix A - Questions For The Creative Project Manager:
- Questions pg 227

Fundamentals of Project Management by James P. Lewis - One thing that I think every athlete learns at a young age is the importance of fundamentals. I have tried to take that important lesson that I learned early in my hockey career and apply it in other aspects of my life. When I found out my first consulting project would be a project management role at Nike, I went to the local library and picked up Fundamentals of Project Management.

The book is relatively short, which I actually really appreciated. Fittingly, a book on fundamentals shouldn't be extremely long and wordy. I think the book does a great job succinctly laying out an overview of the basics of project management. The book not only delved into the classic project management tools and theories but it also covered topics like team engagement, leadership, and organizational culture,

I would definitely recommend the book to anyone who wants to read a good overview of project management or to anyone who wants to learn how they can hone their skills to better deliver projects on time, within budget, and within the desired performance parameters. Below are some of the notes I took while reading this book.

Notes:

Chapter 1: An Overview of Project Management:
- PMI.org
- A project is a temporary endeavor undertaken to produce a unique product, service, or result.
- Repetitive =/ project
- Definite time, cost, scope, performance requirements
- "A problem scheduled for solution"
- Rule = people who do the work should plan it
- PM role is that of an enabler
- "Leadership is the art of getting others to want to do something that you believe should be done." - Lance Packard
- C=F(P,T,S)
- Project Life Cycle: Concept, Definition, Planning, Execution, Closeout
- Projects fail at the definition phase
- Steps in managing a project: 1. Define Problem 2. Develop Solution Options 3. Plan the Project 4. Execute the Plan 5. Monitor & Control 6. Close the Project
- 9 Knowledge Areas pg 20

Chapter 2: The Role of the Project Manager:
- The primary role of all PMs is to ensure all work is completed on time, within budget & scope, and at the correct performance levels
- Must understand mission and vision of the organization
- PM is about influencing people
- Scandinavian Airlines Story
- PM has responsibility but authority. Must use leadership and management to accomplish

Chapter 3: Planning the Project:
- Two barriers to good planning: 1. Prevailing Paradigms 2. The Nature of Human Beings
- Control is exercised by comparing  where you are to where you are supposed to be so that corrective action can be taken when there is a deviation
- No plan = no control
- To plan you must have strategy, tactics, & logistics
- Project plan is: problem statement - project mission statement - project objectives - project work requirements - exit criteria - end item specifications - WBS - schedules - required resources - control system - major contributors - risk areas
- Planning tips pg 42

Chapter 4: Developing A Mission, Vision, Goals, & Objectives for the Project:
- A problem is a gap
- Vision defines done
- Mission, vision, problem statement chart pg 47
- Mission of every PM is to satisfy the customers needs
- 1. What are we going to do? 2. For whom are we going to do it?
- Objectives: what is our desired outcome? How will we know when we achieve it?
- Risk analysis pg 53

Chapter 5: Using The Work Breakdown Structure:
- WBS developed before schedule
- Break work down to a level sufficient to achieve estimating accuracy
- Assign responsibility for each part
- You cannot give a time/cost estimate without considering who will be performing the task
- Base on historical data
- Beware of Parkinson's law and variation
- List assumptions, +- numbers, things that may skew the estimate

Chapter 6: Scheduling Project Work:
- Critical pat determines the longest series of activities that can't be done in parallel
- Unless resource allocation is handled properly schedules are next to useless
- Schedule at a level you can manage
- Diagram what is possible then deal with resource constraints

Chapter 7: Producing a Workable Schedule:
- Harder to catch up than to stay on target

Chapter 8: Project Control & Evaluation:
- Having authority is no guarantee people will do your bidding. In the end people have to do it willingly
- Give people responsibility & control over what they are supposed to accomplish
- Self control needs 1. Clear definition of goal 2. Personal plan of how to do work 3. Skills & resources 4. Feedback on progress from the work 5. Clear definition of authority to take action & deviate from the plan
- If control systems do not result in action then the system is ineffective
- The simpler the status report the better

Chapter 9: Project Control Using Earned Value Analysis:
- There are only 4 responses to deviation from the plan: 1. Cancel the project 2. Ignore the deviation 3. Take corrective action 4. Revise the plan
- One of the hardest things to do is actually measure progress
- Variance formulas pg 118

Chapter 10: Managing The Project Team:
- Project management tools are necessary but not sufficient
- If you can't manage people you can't manage a project
- Have the team participate in planning to promote teamwork
- Getting the team organized: 1. Define what must be done using WBS, problem definition, etc. 2. Determine staffing requirements 3. Recruit the team 4. Complete your project plan with participation of the team
- Rules for developing commitment pg 138

Chapter 11: How To Make Project Management Work In Your Company:
- Leadership must show interest
- Reward good project management
- Train the team
- Plan small wins for people

Chapter 12: Project Management For Everyone:

- Tools should only be used when they give you an advantage

Full Circle - Lessons From One Sandbox To Another

Life is a funny thing. As you get a bit older and get some experience under your belt your perspective on things definitely changes. The older I get the more I believe that the majority of what has made me successful in dynamic team environments was learned at a very young age. This concept hit me pretty hard while I was deployed to Iraq.

Over the course of my time in Iraq I was in charge of a team of military, civilian, and contractor personnel. I have been in charge of different people, teams, and groups before but for some reason when I was deployed I was much more apprehensive about my capabilities as a manager and leader. Maybe it is because the military mission was smacking me square in the face. Stateside you do not necessarily always see the negative impact of your mistakes. On a deployment the stakes are high. My contracting team's failures directly impacted the war fighters and support troops in theater carrying out the mission. That reality was definitely something I took seriously. As my nerves and doubts got the better of me I was constantly trying to remember lessons learned from college business classes, from the numerous management and leadership books I have read over the years, and from the blogs I frequent. Due to the nature of my no notice deployment and the operational tempo in Iraq I was thrust right in without the convenience of being able to revisit and review leadership and management principles; I was forced to go with my gut and what I have internalized over the years.

Now that I have been back in the good US of A for a few weeks and have had time to reflect on the extremely positive management and leadership experiences I had in Iraq, I look back and my nervousness and insecurities and I almost laugh. I am amazed at how much of what made me successful as a leader over there weren't complex theories and cutting edge management formulas but lessons that I learned as a kid playing on the playground or in the sandbox. Here are a few lessons learned in the school sandbox that helped me immensely in the deployed sandbox:

Learn to Share: I tried to redirect all compliments and make sure that the credit went to my team. Careerists often struggle with this one. We all want to advance and be recognized but avoiding taking credit for the team's successes is crucial to continued team success. Your team will recognize your gratitude for their efforts and your superiors will, over time, see that you are a component of the team success as well even though you humbly redirect credit.

Quit Now Be A Quitter For Life: I distinctly remember my parents drilling this lesson into my head at a very young age and I am grateful they did. I think this simple but impactful lesson has been transformed into many clichéd life lessons. When the going gets tough the tough get going. Work hard and the rest will take care of itself. Quitters never win. The list goes on. Regardless of how its worded, the spirit of the lesson helped me immensely overseas. There were times where I just didn't think that I could do all the work that needed to be done. There were times that I didn't think that I had the stamina to make it through the remaining months. I was uncomfortable, tired, overworked, and most of all I missed my family and friends back home. Whenever I felt overwhelmed like that I just put my head down and worked through it. What other choice did I have? Not much to be honest but I think life is the same way. When you get dealt a bad hand you just have to keep working through it, because you can't quit life either.

TEAM = Together Everyone Achieves More: I still remember playing two hand touch in elementary school with my buddies. I can remember the exhilarating feeling I got when we put together a team that kept winning. That was my first taste of synergy in action. All throughout my hockey career and now into my Air Force career I have loved the feeling of being on close knit high performing teams. Those types of teams are not easy to come by but the feeling you get being a part of one of those teams is amazing. In Iraq being part of a team is a necessity. Deployments are not easy so you have to lean on people more than you are used to. But that vulnerability and shared experience creates strong bonds which was refreshing and reminded me of my old hockey playing days.

Cheaters Never Win: People always talk about integrity in the military. I often hear it described as doing the right thing even when no one is looking. That definition, although quite tangible and good to live by, does the spirit of integrity a bit of injustice. Having integrity in what you do and what you say makes you a precious commodity. Normally I am fairly non confrontational. Out there working with the Army things were a bit different than what I was used to working in an office setting in Boston. If you don't speak up and know what you are talking about in Iraq you will get stream rolled by higher ranking hard charging Army dudes! The stakes are high, the tempo is fast paced, and people are stressed out. It is definitely not the place to be timid. So saying what you mean and living by your principles and virtues is more important than ever. Over time I saw that the leaders above me recognized that I had an opinion. Generally that opinion was thought out, reflected my true feelings, and it was founded on a genuine concern for our task at hand and a desire to improve. Having that integrity to stand behind what I said and did made me a constant source of consultation for the senior leaders in our organization. It was a good feeling. It was refreshing to know that you don't have to be a "yes man" or a "brown-noser" to be recognized as valuable to the team. If you work hard and do in your heart what you know is right then you will be recognized for your contributions to the team.

I am sure I could think of a few more but these are the big lessons that come to mind. I would love to hear comments on other childhood lessons that have served people well in their lives. Thanks for reading and it is great to be back!

Personal MBA Update - First Break All The Rules

First Break All The Rules by Marcus Buckingham and Curt Coffman - Going against the status quo is a fairly prevalent cliche that is easy to latch onto and the study of management is no exception. However First Break All The Rules parades the anti-establishment management flag based at least in part on the largest Gallup poll results on management ever undertaken. Although the field is generally viewed as more of an art than a science the useful guidelines and anecdotes are based on hard data taken from thousands of managers at numerous companies across the globe. Although I am considered rather green or wet behind the ears in my career journey, I still took quite a bit from this book. I don't manage a division or have 300 plus direct reports, but I feel that management is more a study of interpersonal skills and organizational habits that we all can learn from. There were definitely some parts that I could not relate to at all, but that is not to say I will never encounter similar situations or apply those lessons to other situations. One surprisingly useful discovery within this book was the introspective nature of the material. The way the book was written had me looking at my life to see if I was surrounded by effective managers, by a high performing organization, and with people who were happy. Furthermore it offered the right line of questioning to evaluate whether or not a position is good for my unique set of talents and behaviors. Definitely some interesting stuff that is value added not only for those seeking to be better managers, but for those seeking to make sure that they are positioned most effectively to exploit their unique makeup. Here are my notes from the book:

Introduction:

- The greatest managers in the world do not have much in common but they do have one thing; Before they do anything else they first break all the rules of conventional wisdom.

The Measuring Stick:

- Like the disaster of Britain's ships at the Scilly Isles, many businesses suffer from an inability to measure what they know is critically important

- No one has figured how to measure attracting and keeping talented people

- Intellectual capital is becoming more important and valued

- Gallup interviewed over a million employees and came up with 12 questions measuring the strength of the workplace:

1. Do I know what is expected of me at work?

2. Do I have the materials and equipment I need to do my work right?

3. At work do I have the opportunity to do what I do best everyday?

4. In the last 7 days have I received recognition or praise for doing good work?

5. Does my supervisor or someone at work seem to care about me as a person?

6. Is there someone who encourages my development?

7. At work do my opinions seem to count?

8. Does the mission/purpose of my company make me feel my job is important?

9. Are my coworkers committed to doing quality work?

10. Do I have a best friend a work?

11. In the last 6 months has someone at work talked to me about my progress?

12. This year have I had opportunities to learn and grow?

- Questions contain an extreme like "best" or "everyday"

- No questions w/pay, benefits, senior management, organizational structure. There were but they disappear during analysis. Not unimportant but equally important. The questions above are the real discriminators

- Asked companies for scores measuring 1. productivity 2. profitability 3. employee retention 4. customer satisfaction

- Compared the 12 questions to the 4 business measurements to see if there is a correlation

1. There is a link between employee opinion and business unit performance 2. The immediate manager had the most impact on employee opinion

- All 12 questions were linked to at least 1 business outcome

- 10 of 12 questions were linked to productivity, 8 of 12 to profitability, 5 of 12 to employee retention

- Most powerful questions had strongest links to the most business outcomes

- 6 most powerful:

1. Do I know what is expected of me?

2. Do I have the materials and equipment I need to do my work right?

3. At work do I have the opportunity to do what I do best everyday?

4. In the last 7 days have I received recognition or praise for doing good work?

5. Does my supervisor or someone at work seem to care about me as a person?

6. Is there someone who encourages my development?

- Mountain Climbing: Why is there an order to the 12 questions?

- Base camp: What do I get?

1. Do I know what is expected of me?

2. Do I have the materials and equipment I need to do my work right?

-Camp 1: What do I give?:

3. At work do I have the opportunity to do what I do best everyday?

4. In the last 7 days have I received recognition or praise for doing good work?

5. Does my supervisor or someone at work seem to care about me as a person?

6. Is there someone who encourages my development?

- Camp 2: Do I belong here?:

7. At work do my opinions seem to count?

8. Does the mission/purpose of my company make me feel my job is important?

9. Are my coworkers committed to doing quality work?

10. Do I have a best friend a work?

- Camp 3: How can we all grow?:

11. In the last 6 months has someone at work talked to me about my progress?

12. This year have I had opportunities to learn and grow?

- Base camp and camp 1 is where you should focus your time and energy as a manager. If lower level needs aren't met everything else is irrelevant

The Wisdom of Great Managers:

- Frog and Scorpion parable

- Each person is true to their unique nature. There is a limit to how much remolding you can do to someone

- The great managers don't bemoan the differences they capitalize on them. They try to help each person become more of who they already are.

- People don't change that much. Don't waste time trying to put in what was left out. Try to draw out what was left in. That is hard enough.

- "Smart individual performers keep getting moved into manager positions without the slightest idea of what the manager role is, let alone the ability to play it. We send them off to one of these leadership development courses, but they come back more impressed with their mini executive status than with the day to day challenges of being a good manager. No one knows what being a good manager is anymore."

- The manager is the "catalyst" role

- 4 activities a manager must do extremely well: 1. select a person 2. set expectations 3. motivate the person 4. develop the person

- Those four activities say what great managers do but not how

1. Select for talent - not just experience, intelligence and determination

2. Define the right outcomes - not the right steps

3. Focus on strengths not weaknesses

4. Find the right fit - not the next rung on the ladder

The First Key: Select For Talent:

- Normally we associate talent only with celebrated excellence. Talent seems to be a rare and precious thing bestowed on special far away people

- Great managers disagree with this definition of talent

- Talent is a recurring pattern of thought, feeling, or behavior that can be productively applied. Your talents are behaviors you find yourself doing often

- Every role performed at excellence requires talent because it requires recurring patterns of thought feeling or behavior

- Most managers select for experience, intelligence, or determination. Talent if mentioned at all is an afterthought

- The right talents are the prerequisites for excellence

- The way you filter the earths stimuli is largely the source of your talents

- People get the same stimuli, produce different reactions and therefore have varying degrees of performance

- Great manager mantra pg 79

- Neuroscience confirms what great managers know. Peoples filters and the recurring patterns of behavior it creates, is enduring. In the most important ways people are permanently wonderfully unique, So are you. So are the people you hire.

- Great managers are not troubled by the fact that there is a limit to how much people can change. It is happy confirmation that people are different.

- There is no point wishing away individuality. It is better to nurture it and help someone understand their filter and to channel it towards productive behavior

- Skills, knowledge, and talents are distinct elements of a persons performance

- Skills are the how to's

- Knowledge is what you are aware of: 1. the factual things you know 2. experiential things you have picked up along the way

- 3 kinds of talents:

1. Striving - is the why of a person. Why they get out of bed everyday. Why are they motivated to push etc.

2. Thinking - the how of a person. How they think, how they weigh alternatives, how they make decisions etc.

3. Relating - the who of a person. Whom they trust, who they build relationships with, who they confront and ignore etc.

- None of this implies a person cannot change. Everyone can change and learn and get better. The language of skills knowledge and talents simply helps the manager identify where radical change is possible and where it is not!

- Two of the most pervasive management myths:

1. Talents are rare and special - everyone has recurring patterns of behavior. The talent alone isn't special, it is the matching of talent with the role that is special.

2. Some roles are so easy they don't require talent - Great managers do not believe that their filter is common to everyone. They're wired to believe that people are wired to excel at a role and will derive satisfaction from doing it well

- Peter Drucker said, "Even today, remarkably few Americans are prepared to select jobs for themselves. When you ask, 'Do you know what you are good at? Do you know your limitations?' they look at you with a blank stare. Or they often respond in terms of subject knowledge, which is the wrong answer."

- Know what you are looking for. Study your best.

- John Wooden said, "No matter how you total success in the coaching profession, it all comes down to a single factor - talent. There may be a hundred great coaches of whom you have never heard of in basketball, football, or any sport who will probably never receive the acclaim they deserve simply because they have not been blessed with the talent. Although not every coach can win consistently with talent, no coach can win without it."

- Talent is only potential. It takes great managers to turn talent to performance.

The Second Key: Define the Right Outcomes:

- Managers have less control than those they manage. They cannot do anything. They motivate influence etc. They have remote control.

- Their dilemma: The manager must retain control and focus people on performance but they are bound by the belief that they cannot force everyone to perform in the same way

- The solution: define the right outcomes and let each person find their own way to get their

- There is a strong temptation for managers to try and control and implement one best way

- The managers challenge is not to perfect people but to capitalize on each persons uniqueness

- Rules of thumb:

1. Don't break the bank - employees mus follow the required steps that deal with accuracy or safety

2. Standards rule - must follow required steps that are company or industry standards

3. Don't let the creed overshadow the message - required steps are only useful if they don't obscure the desired outcome

4. There are no steps leading to customer satisfaction - Required steps only prevent dissatisfaction they cannot drive customer satisfaction

Level I - customers expect accuracy

Level II - they expect availability

Level III - they expect a partnership. They want you to be listened to and responded to and to feel they are on the same side of the fence as you

Level IV - they expect advice. The feel closest to organizations that help them learn

- Focusing on outcomes is one thing but now do you know what are the right outcomes for your customers?

1. What is right for your customers - customers define value

2. What is right for your company - are outcomes in line with your strategy

3. What is right for the individual - go from players to playbook and not the other way

The Third Key: Focus on Strengths:

- Focus on each persons strengths and manage their weaknesses. Help people become more of who they are

- If you want to turn talent into performance you have to position each person so you are paying them to do what they are naturally wired to do. You have to oust them into the right role

- It is not treat others as you would want to be treated. Manage by exception. Treat others how they want to be treated

- Spend the most time with your best people. Your role is to turn talent into performance

- If you are paying less attention to your stars you are encouraging them to change their behavior to get noticed and those behaviors are what made them stars to begin with

- The fairest thing to do is treat everyone differently

- Don Shula on fairness, "I am going to be very consistent with every one of you because Ill treat every one of you differently. That's the way it is. The harder a guy works, the better he performs, and the more he meets my guidelines, the more leeway he is going to have with me. By the same token, if a guy doesn't work very hard for me or if hes not a very good player, hes not going to be around for very long."

- You learn from top performers

- Top performers have the most room for growth. Don't be held back by focusing on the average. Focus on excellence

- This does not mean that poor performance should be ignored. Just consider what is causing it

- A non talent is something that somebody doesn't possess. It can become a weakness when a person is in a role that requires that non talent

- Devising a support system is more productive and fun than trying to fix weaknesses. It allows you to focus on strengths and manage weaknesses.

- Find a business partner whose peaks match your valleys

- If all else fails you may have made a casting error and you must find the person an alternative role

The Fourth Key: The Right Fit:

- Every manager is eventually asked "where do I go from here" by employees looking to grow, earn more, get more prestige etc. What is the right answer?

- There is no right answer just a right way to approach the question. Help each person find the right fit

- The Peter Principle states that we promote up to a persons level of incompetence

- Create heroes in every role. Everyone climbing mindlessly to ever decreasing rungs is not productive or realistic

- Some roles performed excellently are more valuable that roles up the ladder performed averagely

- Broadbanding overlaps pay scales and promotes excellence at the current position

- Perform creative acts of revolt to reward excellence

- Acquiring varied experiences is important but peripheral to a healthy career. It is an accessory but not a driving force

- Self discovery is the driving guiding force for a healthy career

- Sunday night blues test. If you feel that stab of depression at the end of the weekend ask why? If not ask why?

- Managers should be the mirror to help discovery by constant feedback, reviews and goals

- Managers can level the playing field by creating heroes, designing levels of achievement, and broadbanding so decisions are made based more on talents and non talents vs money prestige

- Phil Jackson "Athletes aren't the most verbal breed. That's why bare attention and listening without judgement are so important."

Turning the Keys: A Practical Guide:

- The art of interviewing for talent:

1. Make sure the talent interview stands alone. Leave out pay and other details. Make sure the patterns of thought, feelings, and behavior match the job

2. Ask a few open ended questions and try to keep quiet. Let them reveal themselves to you. Believe what they say no matter what that reveals

3. Listen for specifics. The details are less important than the top of the mind simplicity with which they recall them. Specifics and top of mind will reveal recurring talents

4. Clues to talent. People are complex so you cant predict perfectly but listen for clues to the talents they have. A. rapid learning B. Satisfactions

5. Know what to listen for. Know how the best people respond and use those responses as differentiators

- Use performance management routine that is simple uses frequent interaction and focuses on the future and has employees track their own performance and learning

- Routine page 225

- What great managers expect of every talented employee: Look in the mirror any chance you get, muse, discover yourself, build your constituency, keep track, catch your peers doing something right

- What can you do if you work for someone who is not a great manager:

1. If they are too busy schedule a performance meeting for them

2. If they force you to do things their way set up a meeting to set performance outcomes

3. If they praise at inappropriate times bring it up in performance meeting

4. If they constantly ask how you are doing or intrude schedule a meeting on your time

5. If they ignore distrust take credit blame or disrespect then get out from under them

- How to break through conventional wisdom barricades:

1. Keep focus on outcomes

2. Value world class performance in every role

3. Study your best

4. Teach the language of great managers

Personal MBA Update - Innovation and Entrepreneurship

Personal MBA Update - Innovation and Entrepreneurship by Peter Drucker: I want to meet Peter Drucker’s book researcher. And if he did the research himself then he is even more impressive than just possessing the ability to write an incredibly insightful and practical book on a topic that is ethereal to many. Innovation and Entrepreneurship by Peter Drucker is a must read for those interested in the subject topics. Drucker, known largely for his grandiose contributions to the study of management, has written a book that lays out a practical roadmap for those who wish to advance in the fields of innovation and entrepreneurship. The reason I commented on the book researcher is that the book reads in a manner that is based entirely upon example and story. You won’t find a “step one, step two, do this, do that” book from Drucker. Every principle and axiom is centered on an example from history. He cites examples on everything from the French revolution to the Toyota production revolution. By doing so he has produced not only an entertaining book, but a guide with real practical content that allows readers to improve their ability to innovate in their existing careers or in new ventures and markets. And that is the premise of this great book. That innovation and entrepreneurship can be learned and honed like any other skill. It is not a spark of genius that manifests itself in your head outside of your own personal control. You can prepare yourself for success in innovation and entrepreneurship. Here are my notes from this classic:

Introduction: The Entrepreneurial Economy:
- Talks about how a Kondratieff or stagnating deindustrialization of the American economy is seemingly at odds with an entrepreneurial high tech America
- Says America is the only true entrepreneurial economy
- Sights that many of these entrepreneurial companies are in fact manufacturing
- The “new technology” is entrepreneurial management

The Practice of Innovation:
- Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for different business/service
- It is capable of being presented as a discipline, of being learned, or practiced

Systematic Entrepreneurship:
- Opening another restaurant is not entrepreneurship. McDonalds was entrepreneurship not in its end products but in its management concepts and techniques. They created a new market and a new customer
- Entrepreneurs create something new, something different; they change or transmute values
- Do something different rather than do better what is already being done
- The entrepreneur upsets or disorganizes or as Schumpeter would say “his task is creative destruction.”
- The entrepreneur always searches for change, responds to it, and exploits it as an opportunity
- Entrepreneurship is viewed as risky. But why? They shift resources from areas of low productivity and yield into areas of higher productivity and yield. There is the risk that they may not succeed but if moderately successful the returns should be more than adequate to offset the risk
- Its risky because so few so called entrepreneurs know what they are doing. Purposeful innovation is a systematic methodology

Purposeful Innovation and the Seven Sources for Innovative Opportunity:
- Some of the best innovation is not technical but social in nature
- Innovation used to be a flash of genius but eventually became research, a systematic purposeful activity
- Entrepreneurs have to learn to practice systematic innovation
- The entrepreneurs who start out with the big idea that they’ll make it big in a hurry can guarantee failure
- Italic section page 35
- The overwhelming majority of successful innovations “exploit change”
- 7 Sources of innovative opportunity:
Within the enterprise:
1. The unexpected – unexpected success, failure, or outside event
2. The incongruity – between reality as it is and the way it ought to be
3. Innovation based on process need
4. Changes in the industry structure or market structure that catch everyone unaware
Outside the enterprise:
5. Demographics (population changes)
6. Changes in perception, mood, and meaning
7. New knowledge both scientific and non scientific
- The lines between can be blurred and overlap, none more important or productive than the other

Source: The Unexpected:
Success:
- No area offers richer opportunities with less arduous and risky work. Yet it is often neglected or worse rejected
- Macy’s story pg 37
- It is not enough to depend on accidents, the search must be organized
- It must be seen
1. What would it mean to us if we exploited it? 2. Where could it lead us? 3. What would we have to do to convert it into an opportunity? 4. How do we go about it?
Failure:
- Rarely seen as symptoms of opportunity
- You don’t necessarily know why change is occurring just exploit it like the Ford Thunderbird
- All you need to know is something happened and that is enough to convert the unexpected success or failure into an opportunity for effective purposeful innovation
Outside Event:
- The unexpected outside event may thus be above all opportunity to apply already existing expertise to a new application, but to an application that does not change the nature of the business we are in.
- It may be an extension rather than a diversification
- The opportunity is there. It requires more than mere luck or intuition. Opportunities demand that the enterprise search for innovation, be organized for it, and be managed as to exploit it

Source: Incongruities:
- An incongruity is a discrepancy, a dissonance between what is and what ought to be, or between what is and what everyone assumes it to be
- Several kinds: 1. Incongruity between economic realities 2. Incongruity between the reality of an industry and the assumptions about it 3. Incongruity between the efforts of an industry and the values and expectations of its customers 4. Within the rhythm and logic of a process
Economic realities:
- Of all incongruities that between perceived and actual reality may be the most common

Source: Process Need:
- Opportunity is the source of innovation but necessity is the mother of invention
- With process needs everyone knows the need exists but no one does anything about it
- Innovations based on process needs require 5 basic criteria:
1. A self contained process
2. One weak or missing link
3. A clear definition of the objective
4. Specifications for the solution are clearly defined
5. Widespread realization that “there ought to be a better way” that is highly receptive

Source: Industry and Market Structures:
- Market and industry structures are quite brittle
- A change in industry structure offers exceptional highly visible and quite predictable to outsiders. Insiders perceive these same changes as threats. The outsider who can innovate can become a major factor fast with relatively low risk
- 4 nearly certain indicators of impending change in industry structure:
1. Rapid growth is the most reliable and easily spotted
2. After growth the way one perceives and services the market is likely dated
3. A convergence of technologies previously seen as separate
4. The way in which they do business is changing

Source: Demographics:
- External
- Changes in population, size, age, composition, employment, education, income
- What makes demographics such a rewarding opportunities for entrepreneurs is the neglect of others: the assumption demographics do not change

Source: Changes in Perception:
- When a change in perception takes place the facts do not change, their meaning does
- A critical problem in perception based innovation is timing

Source: New Knowledge:
- Knowledge based innovation is the superstar of entrepreneurship
- It has the longest lead time of all innovation
- They are almost never based on one factor but the convergence of many
- Requirements:
1. Careful analysis of all necessary factors
2. Clear focus and strategic position
3. Occupy a strategic position and practice entrepreneurial management
- Even with meticulous analysis clear focus and management knowledge based innovation suffers from unique risks and innate unpredictability
1. For science and tech based innovators time is working against you 2. Because the “window” is much more crowded any one knowledge based innovator has far less chance of survival
- The “shakeout” sets in as soon as the window closes and the majority of ventures do not survive
- The innovation is not enough, must focus on receptivity to it

The Bright Idea:
- Bright ideas probably out number all other categories put together yet they are the riskiest and least successful
- Bright ideas are vague and elusive

Principles of Innovation”
- Miracle cures exist but that doesn’t mean we put that in textbooks to be taught to Drs. Similarly there are innovations that don’t come from sources in previous chapters but such innovations cannot be replicated
- The do’s:
1. Purposeful systematic innovation begins with the analysis of opportunities
2. Innovation is both conceptual and perceptual; ask look and listen
3. An innovator to be effective has to be simple and focused. The greatest praise an innovator can receive is “This is obvious. Why didn’t I think of that?”
4. Effective innovations start small they try to do one specific thing
5. Successful innovation aims at leadership within a given environment
- The don’ts:
1. Try not to be clever. Innovations must be handled by ordinary humans and there are a lot of morons out there
2. Don’t diversify, splinter, or do too many things at once
3. Don’t try to innovate for the future. Innovate for the present
- The three conditions:
1. Innovation is work
2. To succeed innovators must build on their strengths
3. Innovation is an effect in economy and society
- Successful innovators are conservative. They have to be. They are not risk focused they are opportunity focused

The Practice of Entrepreneurship:
- The entrepreneurial requires different management but it still requires systematic organized purposeful management. Entrepreneurs must face up to their own rules and commitments

Entrepreneurial Management:
- Established business, public service, and startups

The Entrepreneurial Business:
- The belief that large businesses don’t innovate is a misunderstanding
- It is not size that is the impediment but the existing operation itself
- It takes special effort for the existing business to become entrepreneurial. The temptation is to always feed yesterday and starve tomorrow
- Entrepreneurship is not natural and not creative; it is work!
- How can we make the organization receptive to innovation, want innovation, reach for it, work for it?
- Innovation must be part and parcel of the ordinary, the norm, if not routine
- Innovation must be foundation of individual managers success and job security and the need for innovation must be defined and spelled out, and an innovation plan with specific objectives laid out
- Entrepreneurial Practices:
1. Focus managerial vision on opportunity
2. Generate an entrepreneurial spirit throughout the entire management group
3. Have a formal session with junior people and LISTEN for opportunities
- Measuring innovative performance is the only way entrepreneurship will become action
1. Feedback from results to expectations
2. Develop a systematic review of innovative efforts
3. Judging innovative performance against innovative objectives against performance and standing in the market and performance as a business all together
- Structures:
1. The entrepreneurial and new must be organized separately from the old and existing
2. The new must receive special focus within the organization
3. Keep the venture from burdens of normal products like ROI requirements etc.
4. Returns on innovation will be different
5. A person or component group should be held clearly accountable
- The don’ts:
1. Don’t mix managerial units and entrepreneurial ones
2. Do not innovate outside your existing field
3. Acquiring outside entrepreneurial ventures rarely works

Entrepreneurship in the Service Industry:
- Public service institutions need to be entrepreneurial and innovative as much as any business maybe more
- But it is more difficult because in the absence of profit there’s only growth in and of itself
- Most innovations are imposed by outsiders or a catastrophe
- The forces that impede entrepreneurship and innovation in a public service institution are inherent in it, integral to it, inseparable from it
- 3 reasons it is more difficult in public service:
1. Based on budget not results 2. Dependant on a multitude of constituents 3. Most important is that they “do good” and see the mission as a moral absolute vs. an economic cost/benefit analysis
- Needed policies:
1. Needs a clear definition of its mission 2. Realistic statement of goals 3. Failure to achieve means objective is wrong or defined wrongly. It then should be economic vs. moral 4. Build into policy and procedure a constant search for innovation
- Innovation for public service has become so important because public service institutions have become too big and important in developed countries

The New Venture:
- Entrepreneurial management in the new venture have 4 components:
1. Focus on the market
2. Financial foresight for cash flow and capital needs ahead
3. Top management team long before it needs one
4. A decision by the founding entrepreneur on their role
- Often focus on profits but it should be cash flow capital and controls
- A new venture outgrows its capital base with every 40-50% increase in sales

Entrepreneurial Strategies:
- Also requires practices and policies outside in marketplace

Fustest with the Mostest:
- 4 Entrepreneurial strategies:
1. Being fustest with the moistest
2. Hitting them where they aint
3. Finding and occupying a specialized ecological niche
4. Changing the economic characteristics of the product, market, industry
- Fustest requires ambition and seeks to create new industry or market. If it doesn’t work right away it is a total failure
- Hit em is creative imitation that understands the innovation better than those who created it. It is market focused and driven aimed at market dominance
- 5 reasons entrepreneurial judo works: 1. Not invented here mentality 2. Cream of market by getting the high profit part 3. Recognizing what the customer deems quality not the producer 4. Premium price is an invitation 5. Maximize instead of optimize. Try to satisfy every user through the same product or service, so there are a ton of features that satisfy no one
- Entrepreneurial judo is successful when: established leaders refuse to act on the unexpected, a new technology emerges and grows fast, or when a market or industry changes fast

Ecological Niches:
- The ecological niche aims at control, at obtaining a practical monopoly in a small area
- 3 niche strategies:
1. Toll gate strategy – makes people need your product at any price
2. Specialty skill strategy – self explanatory built around a product
3. Specialty market strategy – built around specialized knowledge of a market

Changing Values and Characteristics:
- All strategies in this chapter create a customer that is the ultimate goal or purpose of a business and economic activity
- 4 ways:
1. Creating utility 2. By pricing 3. By adaptation to the customers social and economic reality 4. By delivering what represents true value to the customer
- Great examples
- Anyone who asks “what does the customer really buy” will win the race
- Customers do not buy a product, they buy what it does for them

Conclusion: The Entrepreneurial Society:
- “Every generation needs a revolution.” – Thomas Jefferson
- Alexis de Tocqueville “Revolutions do not demolish the prisons of the old regime they enlarge them.”
- Innovation and entrepreneurship are needed in society as much as business . They achieve what Jefferson hoped to achieve without bloodshed, civil war, or concentration camps, without economic catastrophe, but with a purpose, with direction, and under control.
- We need a society in which innovation and entrepreneurship are normal steady and continuous
- 2 areas in which an entrepreneurial society requires substantial innovation:
1. Take care of redundant workers like auto industry. New businesses create new jobs.
2. The other is more radical and difficult: to organize the systematic abandonment of outworn social policies and obsolete public service institutions. Policy is human not divine and will therefore become obsolete fast, but government policy is view as being forever
- A challenge as an individual in an entrepreneurial society is the need for continuous learning and relearning.

Personal MBA Update - Ready, Fire, Aim

The Personal MBA Update - Ready, Fire, Aim by Michael Masterson: This book was awesome. Plain and simple. It was one of the best books I have read on the topic of entrepreneurship. It wasn't just a touchy feely go out and do it type book. The book had great lessons and practical advice on how to best achieve entrepreneurial success, not just as a start up but as you mature your business. I particularly like the books focus on selling, marketing, and strategies for increasing profits. I found myself testing my own random business ideas against the criteria and recipes for success of this book to see if I truly have good ideas and more importantly if the ideas have the potential to make money. For me I felt as though I took more out of the first stage entrepreneur advice, but that is probably because that is the stage I am trying to reach. I think that the book could prove valuable to business owners and executives alike as it also offers practical advice for those seeking to grow their business and move it into the next stage of business maturity. This is one of those books that I may not remember all the great lessons packed inside, but when I go to start a business the book will be one of the first resources I grab to ensure that I am focusing my efforts for success.

Whether you're thinking about starting a new business or growing an existing one, Ready, Fire, Aim has what you need to succeed in your entrepreneurial endeavors. In it, Masterson shares the knowledge he has gained from creating and expanding numerous businesses and outlines a focused strategy for guiding a small business through the four stages of entrepreneurial growth. Along the way, Masterson teaches you the different skills needed in order to excel in this dynamic environment.

While some of the concepts covered may seem novel, all of them have been proven to work time and again. Among other things, you'll discover:

Why selling is your first business priority and the one thing you should never stop doing

The handful of numbers that are critical to every business

When to cut your losses short and when to let your winners run

The front-end/back-end method of doubling profits easily

Why having a Plan B is as important as Plan A, and when and how to create it

The difference between pushers, thinkers, organizers, and sellers, and how to attract the ones you need for your business

Over the course of his remarkably successful career, Michael Masterson has helped start and develop dozens of multimillion-dollar businesses, including one whose revenues exceeded $135 million and another still growing at $300 million. Now, with Ready, Fire, Aim, he'll show you how to make your way to the top by designing powerful marketing campaigns that will regularly outsell your competitors; implementing innovative operational procedures that will reduce costs and hassles; and using the revolutionary power of the Internet to reduce customer complaints and increase profits.

To start and grow multimillion-dollar businesses over and over again you have to master certain skills. Ready, Fire, Aim reveals what those skills are and shows you how to quickly master them. Filled with in-depth insights and expert advice, this remarkable guide for entrepreneurs gives you a blueprint for business and financial success that will allow you to enjoy life to its fullest.

Here are my notes from the book:

Part I: Being all that you can be
Introduction: The very best job in the world:
- Three most important decisions in life are 1. what you do 2. where you do it 3. with whom you do it Plus #4 when you work and when you don't
- no consideration is more important that who you work with

Getting to the next level:
- The four stages of business development: 1. Starting out zero to $1M 2. Fast growth 1 to $10M 3. Adolescent stage 10 to $50M 4. Maturing state 50 to $300M
- Stage I:
main problem - you don't really know what you are doing
main challenge - making the first profitable sale
main opportunity - achieving a minimum critical mass of customers
- Stage 2:
main problem - you are only breaking even or losing money
main challenge - creating many additional profitable products quickly
main opportunity - increasing cash flow and becoming profitable
- Stage 3:
main problem - your systems are strained and customers are noticing
main challenge - turning the chaos into order
main opportunity - learning how to establish useful protocols and manage processes and procedures
- Stage 4:
main problem - sales slow down or stall
main challenge - becoming entrepreneurial again
main opportunity - getting the business to run itself

Why Employee Size Matters:
- 4 Stages: 1-7-49-344 Employees

Becoming a five star business genius:
- For a business to grow to $100M-$300M it must be good if not great in these areas: 1. coming up with new and useful product ideas 2. selling those products profitably 3. managing processes and procedures efficiently 4. finding great employees to do the work 5. getting people, procedures, products, and promotions going
- To successfully start a business all you need is to 1. know how to make a sale 2. be able to put that sales process into action
- Natural inclinations of an entrepreneur: 1. They are attracted to challenges 2. they enjoy being in leadership roles 3. they are passionate about their ideas
- Natural skill of entrepreneurs: 1. well organized 2. good analytical thinkers 3. they are good at sales 4. good at taking initiative
1. coming up with ideas
2. selling products
3. managing systems
4. developing superstars
5. taking action

Part II: Stage One: Infancy
The supremacy of selling:
- without sales it is very hard to sustain an ongoing business
- Jim Koch and the Sam Adams story
- 4 aspects of entrepreneurial success: 1. A seller: someone to market the product 2. An improver: someone to improve the product 3. An organizer: someone to make sure things flow smoothly 4. A pusher: someone to get people to do what they are supposed to do
- Priorities should be:
1. selling 2. pushing 3. improving 4. organizing
- There is a direct relationship between the success of a business at any given time and the percentage of its capital, temporal, and intellectual resources that are devoted to selling
- Stage I business priorities: 1. get the product ready enough to sell it but don't worry about perfecting it 2. sell it 3. then if it sells make it better
- Making the first sale is critical for two reasons: 1. you need to create cash flow to keep your business going 2. you will never know whether your unique selling proposition (USP) is good until you test it in the marketplace
- The sooner you learn the answer the better and less costly!

Your optimum selling strategy and the 4 fundamental secrets of selling your first product:
- Your optimum selling strategy (OSS): 1. Where are you going to find your customers? 2. What product will you sell them first? 3. How much will you charge for it? 4. How will you convince them to buy it?
- Best advice: Do what everyone else is doing! In the beginning at least.
- How to pick a start up product: 1. What products are hot? 2. Determine if your product fits that trend 3. If yes you are set to go if not go to 4 & 5. 4. Come up with me too product versions of several hot products 5. Improve them in some way by adding features or benefits the originals lack.

Mastering the copy side of selling:
- 4 marketing concepts: 1. The difference between needs and wants 2. Difference between features and benefits 3. How to establish a unique selling proposition (USP) 4. How to sell the USP
- USP: 1. Make it some way better 2. Make it seem better
- quote page 100
- 3 aspects of a solid USP: 1. The appearance of uniqueness 2. The big promise 3. Specific claims 4. Proof of those claims
- advertising cheat sheet on page 107

Secondary yet important priorities for stage one businesses:
- Mentoring and being mentored
- Teaching your team
- Setting business targets
- Page 117 last paragraph

A quick review of the problems, challenges, and opportunities faced by the stage one entrepreneur:
- Don’t waste your time on corporate marketing, sell your product not your company
- Don’t waste your money on invisible (to your customers) business extras like office space, furnishing, equipment and the like
- Don’t be misled by phony business experts
- Be proud of your business acumen not arrogant about your business ideas
- Ask advice from smart people
- Don’t ever believe you know more than the market
- Make sales your company’s top priority
- Learn everything you can about sales and marketing
- Discover the optimum selling strategy
- Understand how pricing and other aspects affect sales
- Give you marketing team one and a critical mass of qualified customers
- If possible use direct mail or email to discover OSS
- In testing price to determine OSS favor the down side
- Don’t invest a lot of inventory before you have figured out OSS

Stage II Childhood:
From $1M to $10M and beyond:
- “Innovation distinguishes between a leader and a follower,” – Steve Jobs
- If you get caught in stage I you have a self employment company vs. equity business
- Every time your business changes so must its leader – YOU
- Most companies that go from 1M to 10M do so within 5 years. Why so quickly? Because they made the fundamental change from 1 product to marketing many products.
- Aggressive proliferation of new products
- The primary factor in stage II growth is the development and marketing of new products. The faster you can develop and sell those new products the fast your business will grow
- Front end sales come from those people who have never bought anything before
- Back end sales come from existing customers
- The purpose of front end is to get a new customer the back end is to produce a profit
- Axiom page 144

Innovation is the key to second stage growth:
- Innovation is rarely new its noticing trends and getting ahead of them to create the tipping point
1. The secret to breaking into new markets or reviving a flagging business is to create tipping point products
2. The secret to creating them is to find hot products in rising markets and come up with some way to make them new and different
3. You can make lots of money on the back end with ordinary products as long as you sell them to existing customers
- quote pg 154 at bottom
- New product ideas: work as a member of a team. Don’t fly solo
- Formula of creative brainstorming:
1. A quorum of three: 2 is better than one 3 is better than 2
2. A maximum of 8: there is a limit to the number of people who can effectively operate
3. A limit of time: Parkinson’s law
4. Established goals: what is your specific objective
5. High standards: keep asking how can we improve upon that?
6. A code of equality
7. Strict rules: a. specific suggestions b. no specific criticism c. be positive d. encourage the weak and cut the windbags short
8. A culture of creativity
- Magic Product cube: cubes have 3 dimensions 1. Price – inexpensive, moderate, expensive 2. Product type – golf clubs, golf paraphernalia, golf balls 3. USP – you have 3 golf pros who will endorse you Tiger etc. This means you have 3X3 or 27 possible products
- The 24 hr rule for preserving the inspiration of genius 1. The entire brainstorming session must be tape recorded 2. When a tipping point idea is suggested a short advertising piece must be written in 24 hrs.

Speed:
- When innovation and speed are combined the results can be astonishing
- 80% of G=IV2 where G= second stage growth I= innovation V= velocity
- Axiom page 168
- Innovators should be passionate about: love good ideas, hate sluggishness, enjoy the process
- “money loves speed”
- Accelerated failure and ready fire aim
- By accelerating failure we can accelerate success. Over time increase success vs. failure
- 8 guidelines to speed up implementation of good ideas: 1. Explain the key concepts 2. Support management 3. Walk the walk 4. Establish parameters 5. Get agreement 6. Accelerate gradually 7. Provide support as you go 8. Follow the program

Getting Ready:
- Ready questions: 1. Do I have a good idea 2. Does it feel like it will work? 3. Are my sales targets real? 4. Can I afford to test the idea? 5. Do I know the basic tasks that need to be done? 6. Do I have the people who can do them? 7. Do I have plan B an exit plan in case my good idea is a bad one?
- quote 183
- gut instincts are really subconscious suggestions that arise from all the patterns we’ve observed. They will tell us more than we can logically know because they represent more information that our brains can logically process.
1. Ask yourself how much it will logically cost to make the product come to life. Take that and double it
2. Figure out how many units it will sell and cut it in half
- Ready Aim Fire business proposal pg 193

What are you waiting for? Get started already:
- 2 reasons most good ideas never get implemented: 1. A desire for perfection 2. Little chores

Aiming the product:
- Ready aim fire ultimately results in higher quality products because there is less money and time wasted on features, mechanisms, and details that customers don’t really care about
- Fewer resources at the ready stage means more available at the aim stage
- A tale of incremental degradation – the candy example page 210
- Business people fall into two categories. Those who believe the universe is limited and disconnected and those who believe its unlimited and interconnected. One hoards and one expands.
- The golden rule or the rule of gold
- Remember that most of your profits will come from back end products which means the easiest way to grow your company is to develop long term relationships with customers and good products
- If it ain't broke….fix it. By broke I mean sales. Trash ones that don’t sell and fix the ones that do sell.

Aiming the Marketing Part I:
- Step I: Exercising the righteous demons
- Myth 1: it is good to sell things that people need, like grain and milk, but it is bad to sell things that people don’t need like TIVOs and gambling vacations
- Reality: More than 90% of what people buy is based on wants not needs
- Myth 2: It is good to sell things as long as you don’t charge much more than they are worth
- Reality: What does value really mean?
- Myth 3: It is good to make good things better but it is bad to sell them
- Reality: Give me a break
- “Don’t be ashamed of doing to thy neighbor which you secretly want done to you.” Golden rule of Marketing Genius is treat your customer as you want to be treated.
- Step 2: Shooting revenues through the roof with 3 basic approaches:
1. You can sell the product to more people
2. You can get your customers to buy more products
3. You can charge more for the products you sell
- Customer service made easy and profitable:
1. Knowing what customers really want
2. Finding out how you can do that for them
3. Talking to them about what you are happy to do
- Step 3: A crash course in sales and marketing
1. Your customers don’t care about you or your business. They are about themselves
2. A small portion of your customer base is giving you the lion’s share of profits
3. Understand why your customers buy from you
a. to feel good about themselves
b. to solve a problem
4. Almost every sales transaction begins with the process of generating leads
5. Learn multichannel marketing
6. Follow the golden rule of marketing genius: treat your customers as you want to be treated
7. Understand the secret of the four legged stool:
a. the big idea b. the big benefit c. the big promise d. proof
8. Understand that customer complaints and objections are the key to selling better
9. Maintain a “no dead end” policy regarding your products. Every sale is a link in a system of links that go on forever
10. Take advantage of customer inertia. Establish a bill til forbid relationship
11. Understand the 80/20 rule
12. Understand the USP of each product
13. Every product line needs its own branding
14. Never lose your marketing edge
15. understand the secret of the core complex. Think of your customers personality as an onion
16. Practice reciprocity with your customers
17. Understand that intimacy is the key to a customer’s lifetime value to your business
18. Be confident and enthusiastic when you sell
19. Don’t push or bribe your customers
20. Develop and mature a marketing culture that emphasizes 3 sentiments: providing benefits to the customer is the heart of product development, providing value is the heart of sales transactions, sincerity is the heart of all communications.

Aiming the Marketing Part 2:
- Understand the buying frenzy
- Increase your profits by stimulating your customers natural wants and turning them into a buying frenzy
- If you convince a customer to buy when they need it you have a loyal customer but if you can persuade him to buy every time that he wants it then you have a human ATM.
- The Law: The likelihood of a customer buying a product is inversely related to his need for it.
- The Corollary: The less a customer needs a product the more likely they are going to buy it.
- 3 factors that stimulate buying frenzies: 1. Feeling like I have more money than I need 2. Being exposed to psychologically effective selling signals 3. Good feeling from buying.

Ready Fire Aim in action:
- various stories

A quick review of the problems, challenges and opportunities faced by the stage 2 entrepreneur:
- Pages 272-277

Making the Stage III Transformation:
- In stage II new employees are added by subordinates creating a communication gap for the first time.
- Corporate execs are different than you but you need them because you can’t change your company without them
- The rule of 3! Each manager should be required to give you only 3 numbers month
- 1. Change yourself. 2. Change or hire great people to run your business

Change into a Corporate Leader:
- Six skills for a Stage 3 business: 1. Controlling operations 2. Managing your managers 3. Communicating your vision 4. Networking for joint ventures 5. Negotiating deals 6. Being good at hiring

Filling your Stage III business with stars and superstars:
- Myths and realities:
- Myth: Employees need job descriptions to know the scope of their responsibilities
- Reality: Job descriptions are not necessary
- Myth: Employees are always motivated by money
- Reality: Money isn’t even the second most important motivating force
- Myth: To win loyalty you must make them owners
- Reality: Most don’t want to be business owners
- Myth: Flat organizations create happier and more effective employees
- Reality: Employees like hierarchy
- Myth: Make work fun by filling it with amusements
- Reality: Fun comes from good work not from distractions
- Myth: A good boss is a sensitive boss willing to respond to personal problems
- Reality: Mixing business with friendship is always a bad idea
- Myth: A good boss listens to employee complaints and responds to them
- Reality: Some complaints are better ignored

Bottlenecks, Bureaucracy, and Politics:
- Terms page 322
- Ostensibly politics and business have the same purpose: go make the world a better place. But their methodology is different. Politicians don’t start doing good until they get their power. Business people can’t get their profits until they do their good.
- Quote pg 332

A quick review of the problems, challenges, and opportunities faced by the Stage III entrepreneur:
- Pages 334-337

Part Five: Stage IIII Adulthood
The last big change:
- Opportunities: 1. Selling your business privately 2. Bringing it public 3. Stepping back and becoming chairman of the board
- Role I: The employer role
- Role 2: The manager
- Role 3: The business builder
- Role 4: The wealth builder

Acting as your company’s main investor:
- Bottom line page 356

The Lean Manager - Developing a Lean Mindset

I subscribe to a Lean Enterprise Institute newsletter and about once a month the man who coined to the term lean, Jim Womack, writes a letter to subscribers. I have included the letter below in full. He shares a valuable but frustrating lesson. One of my mentors in my continuous process improvement journey used to say to me it's about 20% tools and about 80% culture. I think what he meant by that was very much in line with what Womack says here. Anyone can learn lean tools. It has become somewhat of a fad in corporate America and obviously, since I am constantly writing about it, has become instituted in the Department of Defense as well. The tools are the easy part. Maybe it is because they are more tangible, or that they seem more like a step by step guide. However, it is the leadership support and culture change that is truly difficult and will require the most effort. It is never easy to steer the ship when everyone else wants to keep going straight, when everyone else wants to keep things comfortable. Sometimes it just takes showing them that you can go against the status quo and the world is not going to end.

Dear Matt,

Several years ago I started to talk about the need to move beyond lean tools - including the very powerful concept of Value-Stream Mapping - to lean management. At the same time we at LEI began to publish a set of volumes on lean management techniques. These consist of strategy deployment to set priorities from the top of the organization, A3 analysis to deploy new initiatives and solve problems in the middle of the organization, and standardized work with kaizen to create stability and sustainability at the bottom of the organization where value is actually created.

Recently I've been walking through a range of organizations to see how these lean management techniques are being used. Let me cite several illustrative cases:

In one organization I found a remarkably elaborate strategy deployment matrix posted throughout the headquarters and in the plants. It was the familiar x-shaped diagram with important business objectives on the left side, the initiatives needed to achieve the objectives along the top, and the specific results to be achieved in the current year on the right side. In addition there was an array to the right side showing who in which part of the organization was taking responsibility for each initiative and which parts of the organization were affected by each initiative.

And I also found very little success in achieving the goals. Instead, the organizational focus at the end of the budget year was on explaining why progress had not been what had been anticipated. It was a new form of the variance analysis I caricatured in last month's e-letter!

In a second organization I found that the COO had decreed that all problems were henceforth to be tackled using A3 analysis employing a standard eight box format. At the review meeting I attended, every manager showed up with a completely filled out A3 to prove they were on top of their jobs. And, because this organization was transitioning from a decades-long tradition of preparing lengthy reports on every problem (with pages of documentation), the A3s used one point type to crowd in all of the details that would have been included in a traditional report. When these were projected as PowerPoints it turned out that
no one in the room could actually read them. But every manager had done his job.

In a third organization I found all of the elements of standardized work - work standards, work combination tables, kaizen opportunity lists - clearly posted in work areas and ... no standardized work. A few minutes observation showed that the work was not actually being done in the way the work standards required and that kaizen activities were not based on clear problem definition. Yet the management took pains to show me how much progress they had made with this splendid technique as part of their new visual management system.

As I walked through these and other organizations I was sobered to realize that these new lean management techniques had become more tools, in this case lean management tools. They were being followed as corporate ritual without thinking about their actual purpose. As so often happens in organizational life, means had become ends.

I was not surprised. Tools -- for process analysis and for management -- are wonderful things. And they are absolutely necessary. And managers love them because they seem to provide short cuts to doing a better job. But they can't achieve their potential results, and often can't achieve any results, without managers with a lean state of mind to wield them.

What do I mean by a lean state of mind?

First, the lean manager eagerly embraces the role of problem solver. This means going to see the actual situation, asking about the performance issue, seeking the root cause, and showing respect for lower-level managers and for colleagues at the same organizational level by asking hard questions until good answers emerge. It's this critical, probing state of mind that permits lean tools to be put to good use as the lean manager applies the right tool for the specific problem and does this in context on the gemba rather than in the abstract in some conference room. Empty ritual is replaced with a rigorous thought process that engages employees and pulls forward their best abilities.

Second, the lean manager realizes that no manager at a higher level can or should solve a problem at a lower level. (And one of the worst abuses of lean tools lies in trying to do just this.) Instead, the higher-level manager can assign responsibility to a manager at a lower level to tackle the problem through a continuing dialogue, both with the higher-level manager and with
everyone actually touching the process causing the problem. The lean law of organizational life is that problems can only be solved where they live, in conversation with the people whose current actions are contributing to the problem. But this requires support, encouragement, and, yes, relentless pressure, from the higher-level lean manager.

Third, the lean manager believes that all problem solving is about experimentation by means of Plan Do Check Act. No one can know the answer before experiments are conducted and the many experiments that fail will yield valuable learning that can be applied to the next round of experiments.

Finally, the lean manager knows that no problem is ever solved forever. Indeed, the introduction of a promising countermeasure is sure to create new problems at some other point in the organization. This is not bad. It is good, provided the critical, probing mind of the lean manager keeps on the case in pursuit of perfection.

In short the traditional manager is usually passive, going through rituals and applying standard remedies to unique problems. By contrast, inside the mind of the lean manager lies a restless desire to continually rethink the organization's problems, probe their root causes, and lead experiments to find the best currently known countermeasures. When this lean mindset is coupled with the proper lean tools amazing things are continually possible.

Best regards,
Jim

James P. Womack
Founder and Chairman
Lean Enterprise Institute, Inc.

Leaders Develop Leaders

I found this post on Tom Peters blog. Tom has contributed much to the study of management and leadership alongside Peter Drucker. I really like this post. It is a great reminder to all leaders that it is not all about you. If you are focused only on you, you are missing what being a leader is all about. I started thinking back to all the leaders I have dealt with both good and bad, and this simple habit was a clear differentiators between the two. The good leaders ensured that those below them were becoming better people and they contributed all they could to that practice. The poor leaders were more concerned with what their subordinates or players could do for them. What kind of leader do you want to be?

In New Delhi a couple of weeks ago, I had a general in the Indian Army in the front row. I don't recall the details, but evaluating senior officers for promotion came up. I ventured, boldly, that there "was one issue that stood head and shoulders above the rest."

Namely: What is this candidate's track record—in exacting detail—in developing people. Though hardly locked in concrete, I posited that "the ONE question" might go something like this:

"In the last year [3 years, current job], name the three people whose growth you've most contributed to. Please explain in some significant detail where each was at the beginning of the year, where he or she is today, and where each is heading in the next 12 and 24 and 60 months. Please explain your development strategy in each case. Please tell me your biggest development disappointment this past year—looking back, could you or would you have done anything differently? Please tell me about your greatest development triumph—and disaster—in the last ten years. What are the 'three big things' you've learned about 'people development' along the way."

As I see it, it's not the boss' role, for instance, to make strategy. It's the boss's role to develop the best strategist—and the boss's role to ensure that the process thereof is moving along rapidly and imaginatively. And so on.

Finally, as I see it, this in some form applies to pretty much every promotion. And it even has a bearing on evaluating a non-manager on a 3-month project. That rather junior person will, for example, in several instances be responsible for accomplishing a milestone—and to do so, she must engage her team members, and engage them in a way that they go away with some learnings—that contribute a bit to their development.

What do you think about this riff?