On Truman

I recently finished reading Truman by Pulitzer Prize winner David McCullough.

Below are key excerpts from the book that I found to be insightful:

The influence of his teachers on his life, Harry later said, was second only to that of his mother, and when crediting a Tillie Brown or a Margaret Phelps for all they had done for him, he did so with the assumption that everybody of his generation had a Tillie Brown or Margaret Phelps in their background and could therefore understand how he felt.

More important and equally unexpected was the way in which he proved himself a leader. His first day in office he spoke to the point: We intend to operate the country government for the benefit of the taxpayers. While we were elected as Democrats, we were also elected as public servants. We will appoint all Democrats to jobs appointable but we are going to see that every man does a full day’s work for his pay. In other words we are going to conduct the county’s affairs as efficiently and economically as possible.

“Three things ruin a man ” Harry would tell a reporter long afterward. “Power, money, and women. “I never wanted power,” he said. “I never had any money, and the only woman in my life is up at the house right now.”

“It is a pity that Wall Street, with its ability to control all the wealth of the nation and to hire the best law brains in the country, has not produced some statesmen, some men who could see the dangers of bigness and of the concentration of the control of wealth. Instead of working to meet the situation, they are still employing the best law brains to serve greed and self-interest. People can stand only so much, and one of these days there will be a settlement…”

To the country, the Congress, the Washington bureaucracy, to hundreds of veteran New Dealers besides those who had gathered in the Cabinet Room, to much of the military high command, to millions of American men and women overseas, the news of Franklin Roosevelt’s death, followed by the realization that Harry Truman was President, struck like massive earth tremors in quick succession, the thought of Truman in the White House coming with the force of a shock wave. To many it was not just that the greatest of men had fallen, but that the least of men—or at any rate the least likely of men—had assumed his place.

“If we can put this tremendous machine of ours, which has made victory possible, to work for peace, we can look forward to the greatest age in the history of mankind. That is what we propose to do.”

The cost of winning the war had been $341 billion. Now $400 million was needed for Greece and Turkey. “This is a serious course upon which we embark,” Truman said at the finish, and the look on his face was serious indeed. “I would not recommend it except that the alternative is much more serious…If we falter in our leadership, we may endanger the peace of the world, and we shall surely endanger the welfare of this nation.”

The line between communism and democracy was clear: Communism is based on the belief that man is so weak and inadequate that he is unable to govern himself, and therefore requires the rule of strong masters.i Democracy is based on the conviction that man has the moral and intellectual capacity, as well as the inalienable right, to govern himself with reason and fairness. Communism subjects the individual to arrest without lawful cause. punishment without trial, and forced labor as the chattel of the state. It decrees what information he shall receive, what art he shall produce, what leaders he shall follow, and what thoughts he shall think. Democracy maintains that government is established for the benefit Democracy maintains that government is established for the benefit of the individual, and is charged with the responsibility of protecting the rights of the individual and his freedom in the exercise of those abilities…

“This is a Republic. The greatest in the history of the world. I want the country to continue as a Republic. Cincinnatus and Washington pointed the way. When Rome forgot Cincinnatus its downfall began. When we forget the examples of such men as Washington, Jefferson, and Andrew Jackson, all of whom could have had a continuation in the office, then we will start down the road to dictatorship and ruin. I know I could be elected again and continue to break the old precedent as it was broken by F.D.R It should not be done. That precedent should continue—not by Constitutional amendment but by custom based on the honor of the man in office. Therefore to reestablish that custom, although by a quibble I could say I have only had one term, I am not a candidate and will not accept the nomination for another term.”

But if the firing of MacArthur had taken a heavy toll politically, if Truman as President had been less than a master of persuasion, he had accomplished a very great deal and demonstrated extraordinary patience and strength of character in how he rode out the storm.

He was remembered as the first president to recommend Medicare, remembered for the courage of his stand on civil rights at the risk of his political fortunes. The whistle-stop campaign was recalled as one of the affirming moments in the history of the American political system.

On a closing note:

Ambitious by nature, he was never torn by ambition, never tried to appear as something he was not. He stood for common sense, common decency. He spoke the common tongue. As much as any president since Lincoln, he brought to the highest office the language and values of the common American people. He held to the old guidelines: work hard, do your best, speak the truth, assume no airs, trust in God, have no fear. Yet he was not and had never been a simple, ordinary man. The homely attributes, the Missouri wit, the warmth of his friendship, the genuineness of Harry Truman, however appealing, were outweighed by the larger qualities that made him a figure of world stature, both a great and good man, and a great American president.

A highly recommended read on Leadership and History.



On The Everything Store

I recently finished reading The Everything Store – Jeff Bezos and the Age of Amazon – by Brad Stone.

Below are key excerpts from the book that I found particularly insightful:

There is so much stuff that has yet to he invented. There’s so much new that’s going to happen. People don’t have any idea yet how impactful the Internet is going to be and that this is still Day 1 in such a big way.

“If you want to get to the truth about what makes us different, it’s this,” Bezos says, veering into a familiar Jeffism: “We are genuinely customer-centric, we are genuinely long-term oriented and we genuinely like to invent. Most companies are not those things. They are focused on the competitor, rather than the customer. They want to work on things that will pay dividends in two or three years, and if they don’t work in two or three years they will move on to something else. And they prefer to be close-followers rather than inventors, because it’s safer. So if you want to capture the truth about Amazon, that is why we are different. Very few companies have all of those three elements.

So looking back on life’s important junctures was on Bezos’s mind when he came up with what he calls “the regret-minimization framework” to decide the next step to take at this juncture in his career.

We believe that a fundamental measure of our success will be the shareholder value we create over the long term. This value will be a direct result of our ability to extend and solidify our current market leadership position. The stronger our market leadership, the more powerful our economic model. Market leadership can translate direct! to higher revenue, higher profitability, greater capital velocity, and correspondingly stronger returns on invested capital. Our decisions have consistently reflected this focus. We first measure ourselves in terms of the metrics most indicative of our market leadership: customer and revenue growth, the degree to which our customers continue to purchase from us on a repeat basis, and the strength of our brand. We have invested and will continue to invest aggressively to expand and leverage our customer base, brand, and infrastructure as we move to establish an enduring franchise.

Jeff Bezos embodied the qualities Sam Walton wrote about. He was constitutionally unwilling to watch Amazon succumb to any kind of institutional torpor, and he generated a nonstop flood of ideas on how to improve the experience of the website, make it more compelling for customers, and keep it one step ahead of rivals.

Bezos was obsessed with the customer experience, and anyone who didn’t have the same single-minded focus or who he felt wasn’t demonstrating a capacity for thinking big bore the brunt of his considerable temper.

“My approach has always been that value trumps everything,” Sinegal continued. “The reason people are prepared to come to our strange places to shop is that we have value. We deliver on that value constantly. There are no annuities in this business.” A decade later and finally preparing to retire, Sinegal remembers that conversation well. “I think Jeff looked at it and thought that was something that would apply to his business as well,” he says.

“I understand what you’re saying, but you are completely wrong,’ he said. “Communication is a sign of dysfunction. It means people aren’t working together in a close, organic way. We should be trying to figure out a way for teams to communicate less with each other. not more.”

That was a typical interaction with Jeff. He had this unbelievable ability to be incredibly intelligent about things he had nothing to do with, and he was totally ruthless about communicating it.

If Amazon wanted to stimulate creativity among its developers, it shouldn’t try to guess what kind of services they might want; such guesses would be based on patterns of the past. Instead, it should be creating primitives—the building blocks of computing—and then getting out of the way. In other words, it needed to break its infrastructure down into the smallest, simplest atomic components and allow developers to freely access them with as much flexibility as possible.

‘Jeff does a couple of things better than anyone I’ve ever worked for,” Dalzell says. “He embraces the truth. A lot of people talk about the truth, but they don’t engage their decision-making around the best truth at the time. “The second thing is that he is not tethered by conventional thinking. What is amazing to me is that he is bound only by the laws of physics. He can’t change those. Everything else he views as open to discussion.”

On a closing note:

Amazon may be the most beguiling company that ever existed. and it is just getting started. It is both missionary and mercenary. and throughout the history of business and other human affairs, that has always been a potent combination. “We don’t have a single big advantage,” he once told an old adversary, publisher Tim O’Reilly, back when they were arguing over Amazon protecting its patented 1-Click ordering method from rivals like Barnes & Noble. “So we have to weave a rope of many small advantages.” Amazon is still weaving that rope. That is its future, to keep weaving and growing, manifesting the constitutional relentlessness of its founder and his vision. And it will continue to expand until either Jeff Bezos exits the scene or no one is left to stand in his way.

A recommended read in the areas of technology and corporate history.

On Don’t Make Think

I recently finished reading Don’t Make Me Think – A Common Sense Approach to Web Usability – by Steve Krug.

Below are key excerpts from the book that I found to be insightful:

But when I’m looking at a page that makes me think, all the thought balloons over my head have question marks in them. When you’re creating a site, your job is to get rid of the question marks.

We don’t read pages. We scan them…We’re usually in a hurry…We know we don’t need to read everything…We’re good at it.

We don’t make optimal choices. We satisfice…We’re usually in a hurry…There’s not much of a penalty for guessing wrong…Weighing options may not improve our chances…Guessing is more fun.

there are five important things you can do to make sure they see—and understand—as much of your site as possible: Create a clear visual hierarchy on each page…Take advantage of conventions…Break pages up into clearly defined areas…Make it obvious what’s clickable…Minimize noise.

If the page is well designed, when your vision clears you should be able to answer these questions without hesitation: What site is this? (Site ID)…What page am I on? (Page name)…What are the major sections of this site? (Sections)…What are my options at this level? (Local navigation)…Where am I in the scheme of things? (“You are here” indicators)…How can I search?

The point is, it’s not productive to ask questions like “Do most people like pulldown menus?” The right kind of question to ask is “Does this pulldown, with these items and this wording in this context on this page create a good experience for most people who are likely to use this site?” And there’s really only one way to answer that kind of question: testing. You have to use the collective skill, experience, creativity, and common sense of the team to build some version of the thing (even a crude version), then watch ordinary people carefully as they try to figure out what it is and how to use it. There’s no substitute for it.

Things that diminish goodwill…Hiding information that I want…Punishing me for not doing things your way…Asking me for information you don’t really need…Shucking and jiving me…Putting sizzle in my way…Your site looks amateurish.

Things that increase goodwill…Know the main things that people want to do on your site and make them obvious and easy…Tell me what I want to know…Save me steps wherever you can…Put effort into it…now what questions I’m likely to have, and answer them…provide me with creature comforts like printer-friendly pages…Make it easy to recover from errors…When in doubt, apologize.

On a closing note:

But the things I’m talking- about here are generally very bad practices, and you shouldn’t be doing any of them unless (a) you really know what you’re doing. (b) you have a darned good reason, and (c) you actually are going to test it when you’re done to make sure you’ve managed to make it work; you’re not just going to intend to test it.

A highly recommended read in the areas of usability and user experience.


On This Is Water

I recently finished reading This Is Water – Some Thoughts, Delivered on a Significant Occasion, about Living a Compassionate Life – by David Foster Wallace. The content of this book was delivered as a commencement speech on 2005 and was highly recommended by Shane Parrish from Farnam Street.

Below are key excerpts from the book that I found particularly insightful:

They’re probably even more repulsive than atheists, at least to most of us here, but the fact is that religious dogmatists’ problem is exactly the same as the story’s atheist’s—arrogance, Wind certainty. a closed-mindedness that’s like an imprisonment so complete that the prisoner doesn’t even know he’s locked up.

This is not a matter of virtue—it’s a matter of my choosing to do the work of somehow altering or getting free of my natural, hardwired default setting, which is to be deeply and literally self-centered, and to see and interpret everything through this lens of self.

Probably the most dangerous thing about an academic education, at least in my own case, is that it enables my tendency to over-intellectualize stuff, to get lost in abstract thinking instead of simply paying attention to what’s going on in front of me. Instead of paying attention to what’s going on inside me.

“Learning how to think” really means learning how to exercise some control over how and what you think. It means being conscious and aware enough to choose what you pay attention to and to choose how you construct meaning from experience.

The really important kind of freedom involves attention, and awareness, and discipline, and effort, and being able truly to care about other people and to sacrifice for them, over and over, in myriad petty little unsexy ways, every day.

It is about the real value of a real education, which has nothing to do with grades or degrees and everything to do with simple awareness—awareness of what is so real and essential, so hidden in plain sight all around us, that we have to keep reminding ourselves over and over: “This is water.”

Which means vet another cliche is true: Your education really is the job of a lifetime, and it commences—now.

A highly recommended quick read filled with inspiration.


On Mindset

I recently finished reading Mindset: The New Psychology of Success – How We Can Learn to Fulfill our Potential – by Carol S. Dweck, Ph.D.. As the author best summarizes: “My work is part of a tradition in psychology that shows the power of people’s beliefs. These may be beliefs we’re aware of or unaware of, but they strongly affect what we want and whether we succeed in getting it. This tradition also shows how changing people’s beliefs—even the simplest beliefs—can have profound effects. In this book, you’ll learn how a simple belief about yourself—a belief we discovered in our research—guides a large part of your life. In fact, it permeates every part of your life. Much of what you think of as your personality actually grows out of this “mindset.” Much of what may be preventing you from fulfilling your potential grows out of it.”

Below are key excerpts from this book that I would like to share, from this perceptive piece of work:

On Potential:

This leads us back to the idea of “potential” and to the question of whether tests or experts can tell us what our potential is, what we’re capable of, what our future will be. The fixed mindset says yes. You can simply measure the fixed ability right now and project it into the future. Just give the test or ask the expert. No crystal ball needed…But isn’t potential someone’s capacity to develop their skills with effort over time? And that’s just the point. How can we know where effort and time will take someone…People with the growth mindset know that it takes time for potential to flower.

On how Failure is perceived based on your mindset:

In short, when people believe in fixed traits, they are always in danger of being measured by a failure. It can define them in a permanent way. Smart or talented as they may be, this mindset seems to rob them of their coping resources. When people believe their basic qualities can be developed, failures may still hurt, but failures don’t define them. And if abilities can be expanded—if change and growth are possible—then there are still many paths to success.

On praising abilities:

If people have such potential to achieve, how can they gain faith in their potential? How can we give them the confidence they need to go for it? How about praising their ability in order to convey that they have what it takes? In fact, more than 80 percent of parents told us it was necessary to praise children’s ability so as to foster their confidence and achievement. You know, it makes a lot of sense.

On mindsets and business leadership (Jack Welch):

What he learned was this: True self-confidence is “the courage to be open—to welcome change and new ideas regardless of their source.” Real self-confidence is not reflected in a title, an expensive suit, a fancy car, or a series of acquisitions. It is reflected in your mindset: your readiness to grow.

On mindsets and relationships:

“Oh no,” I replied. “To me the whole point of marriage is to encourage your partner’s development and have them encourage yours.” By that I didn’t mean a My Fair Lady kind of thing where you attempt an extreme makeover on partners, who then feel they aren’t t good enough as they are. I mean helping partners, within the relationship, to reach their own goals and fulfill their own potential. This is the growth mindset in action.

On Shyness:

Shyness harmed the social interactions of people with the fixed mindset but did not harm the social relations of people with the growth mindset. The observers’ ratings showed that, although both fixed- and growth-minded shy people looked very nervous for the first five minutes of the interaction, after that the shy growth-minded people showed greater social skills, were more likable, and created a more enjoyable interaction. In fact, they began to look just like non-shy people.

In conclusion:

Mindset change is not about picking up a few pointers here and there. It’s about seeing things in a new way. When people—couples. coaches and athletes, managers and workers, parents and children. teachers and students—change to a growth mindset, they change from a judge-and-be-judged framework to a learn-and-help-learn framework. Their commitment is to growth, and growth takes plenty of time, effort, and mutual support.

A must read book in the areas of personal development and psychology.


On The Future Of Work

I recently finished reading The Future of Work – Attract New Talent, Build Better Leaders, and Create a Competitive Organization – by Jacob Morgan. As the author summarizes in his opening: “Many organizations around the world today are in trouble. The world of work is changing around them while they remain stagnant. The larger the gap grows the greater the chance becomes that these organizations will not survive. However, organizations shouldn’t just want to survive they must want to thrive and be competitive in a new rapidly changing world. To do this requires pioneering change, not waiting for tragedy or for a crisis to force change. The future workforce is bringing new attitudes and ways of work to which managers must adapt. This means that organizations must adapt to both employees and managers and, as of now, this is happening at a snail’s pace, if at all. This is a book about adapting to that change.”

On the five trends shaping the future of work:

1. New behaviors 2. Technology 3. Millennials 4. Mobility 5. Globalization

On the seven principles of the future employee:

• Have a flexible work environment where they can work anytime and anywhere. • Be able to shape and define their own career paths instead of having them predefined for them. • Share information internally in an open and transparent way in real-time. • Have the opportunity to become leaders without having to be managers. • Collaborate and communicate in new ways. • Shift from being knowledge workers to learning workers. • Learn and teach at-will.

From knowledge worker to learner worker:

The world is changing so quickly that by the time new college students graduate, much of what they have learned is far less relevant and in many cases just obsolete. This means knowledge and experience are no longer the primary commodity. Instead, what is far more valuable is to have the ability to learn and to apply those learnings into new and unique scenarios. It’s no longer about what you know, it’s about how you can learn and adapt.

On vital qualities for future employees:

Self-Direction and Autonomy, Filter and Focus, Embrace Change, Amazing Communication Skills, Learning to Learn

On the Ten Principles of the future manager:

Must be a leader. Follow from the front. Understand technology. Lead by example. Embrace vulnerability. Believe in sharing and collective intelligence. Challenge convention and be a fire starter. Practice real-time recognition and feedback. Be conscious of personal boundaries. Adapt to the future employee.

On many people still want structure:

An article published by Susan H. Greenberg on the Stanford Graduate School of Businessblog on August 1, 2012 called, “Building Organizations That Work”2 summarized the findings of the report: Hierarchies are easier for people to grasp than egalitarian relationships because their asymmetries create “end points’ that facilitate memorization; they are predictable; and they are familiar, beginning with our very first social interaction—the parent-child relationship.

On fourteen principles of the future organization:

• Have employees work in globally distributed yet smaller teams. • Become intrapreneurial. • Create a connected workforce. • Operate like a smaller company. • Focus on creating a place of “want” instead of a place of “need.’ • Adapt to change faster. • Innovate anywhere, all the time. • Build ecosystems. • Run in the cloud. • See more women in senior management roles. • Be “flatter.’ • Tell stories. • Democratize learning. • Shift from profit to prosperity. • Adapt to the future employee and the future manager. • Become globally distributed with smaller teams.

On competitor-driven innovation:

The extent of knowledge and innovation used to depend on the organization itself, or more specifically, a few people within the organization. This is no longer enough to maintain a competitive advantage. The future organization must build knowledge ecosystems in the five groups mentioned earlier in order to thrive. Each group can bring a unique perspective and value proposition.

On the 12 habits of highly collaborative organizations:

1. Focus on individual value before corporate value. 2. Strategy always comes before technology. 3. Learn to get out of the way. 4. Lead by example. 5. Listen to the voice of the employee. 6. Integrate into the flow of work. 7. Create a supportive environment. 8. Measure what matters. 9. Be persistent. 10. Adapt and evolve. 11. Understand that employee collaboration also benefits the customer. 12. Accept that collaboration makes the world a better place.

On the six-step process for adapting to the future of work:

1. Challenge assumptions. 2. Create a team to help lead the effort. 3. Define your “future of work.’ 4. Communicate your “future of work. 5. Experiment and empower employees to take action. 6. Implement broad-based change.

A recommended read in the area of organizational management.

On Leading Digital

I recently finished reading Leading Digital – Turning Technology Into Business Transformation – by George Westerman, Didier Bonnet, and Andrew McAfee. This book was graciously offered to me by Capgemini during the recent CIO Perspectives event in Houston. As the title and introduction summarize the core of this book is: “Our most fundamental conclusion is that Digital Masters— companies that use digital technologies to drive significantly higher levels of profit, productivity, and performance—do exist, but they’re rare. For reasons that we’ll explain here, most firms fall short of digital mastery. That’s the bad news, and it’s why we believe you’re probably not ready to survive and thrive in the second machine age.  Here’s the good news: the reasons that companies fall short of digital mastery aren’t mysterious or too numerous to list. In fact, the reasons are pretty easy to categorize. Companies that struggle with becoming truly digital fail to develop digital capabilities to work differently and the leadership capabilities required to set a vision and execute on it. The firms that excel at both digital and leadership capabilities are Digital Masters.”

Below are key excerpts from the book that I found particularly insightful:

Digital Masters excel in two critical dimensions: the what of technology (which we call digital capabilities) and the how of leading change (which we call leadership capabilities). These are two very distinct dimensions of digital mastery, and each plays its own role. What you invest in matters, to a point. How you use those investments to transform your company is a key to success. Neither dimension is enough on its own. Each is associated with different types of financial performance, and each provides only partial advantage. Taken together, they combine to give Digital Masters a clear advantage over their competitors.

On Creating a Compellinq Customer Experience:

Put customer experience at the heart of your digital transformation.  Design your customer experience from the outside in. Increase reach and customer engagement, where it matters, through new digital channels. Make data and analytics the lifeblood of your customer experience reinvention. Seamlessly mesh your digital and physical experience in new ways. Keep on innovating—it’s never over. Every digital improvement in customer experience will open up new possibilities.

On Exploiting the Power of Core Operations:

Free yourself from old assumptions of the predigital age. Look for bottlenecks and inefficiencies in your processes, and consider whether new digital technologies can help you rethink your operations. Consider how each of the six levers may help you improve operations. If you can’t address both sides of a paradox at once, start with standardization or control. This may open up possibilities to address other levers. Consider examples from inside and outside your industry. As with customer experience, a strong digital platform is essential for operational transformation.

On Reinventing Business Models:

Constantly challenge your business model with your top team. Monitor the symptoms that drive business model change in your industry—for example, commoditization, new entrants, and technology substitution. Consider how you might transform your industry before others do it. Consider whether it is time to replace products and services with newer versions if your present offerings are under digital threats. Consider creating brand-new digital businesses using your core skills and assets. Consider reconfiguring your delivery model by connecting your products, services, and data in innovative ways to create extra value. Consider reinforcing your presence in your current market by rethinking your value proposition to meet new needs. Experiment and iterate your new business model ideas.

On Crafting Your Digital Vision:

Familiarize yourself with new digital practices that can be an opportunity or a threat to your industry and company. Identify bottlenecks or headaches—in your company and in your customers—that resulted from the limits of old technologies, and consider how you might resolve these problems digitally. Consider which of your strategic assets will remain valuable in the digital era.

On Engaging the Organization at Scale:

Lead the engagement effort to energize your employees to make the digital vision a reality. Use digital technology to engage employees at scale. Connect the organization to give a voice to your employees. Open up the conversations to give everyone a role in digital transformation. Crowdsource your employees to co-create solutions, and accelerate buy-in. Deal with the digital divide by raising the digital IQ of the company. Deal with resistance by being transparent and open about the goals.

On Governing the Transformation:

Look internally (e.g., IT, finance, HR, and capital budgeting) for effective governance practices. Consider which digital decisions must be governed at the highest levels of the company, and which can be delegated to lower levels. Place somebody in charge of leading digital transformation, whether that is a chief digital officer or another leader. Identify governance mechanisms, such as committees and liaisons, to assist in governance. Examine whether you need a shared digital unit, including the resources it would have and the roles it would play. Adjust your governance models as your company’s governance needs change.

On Building Technology Leadership Capabilities:

Assess the state of your IT-business relationships: consider trust, shared understanding, and seamless partnership. Assess your IT unit’s ability to meet the skill and speed requirements of the digital economy. Consider dual-speed IT approaches such as a unit within a unit or a separate digital unit that combines IT, business, and other roles. Focus your initial investments on getting a clean, well-structured digital platform; it’s the foundation for everything else. start building the right digital skills. Challenge yourself continually to find new things you can do with your IT-business relationships, digital skills, and digital platform.

In conclusion:

Our research has shown that Digital Masters enjoy superior performance, which should be reason enough to get leadership teams interested in the concepts presented in this book. But there’s also another, even more fundamental, reason: when it comes to the impact of digital technologies on the business world, we ain’t seen nothin yet. The innovations we’ve discussed in previous chapters, including social networks, mobile devices, analytics, smart sensors, and cloud computing, are certainly powerful and profound. They’re reshaping customer experiences, operations, and business models. The pace and impact of these innovations have been nothing short of astonishing, but they’re just a prelude for what’s to come. Technology’s role as the endless agitator of the business world will not only continue, but will accelerate—exponentially.

A recommended read in the IT strategy space.

On Washington

I recently finished reading the masterpiece, Washington – A Life, a winner of the Pulitzer Prize, by acclaimed author Ron Chernow. As Ron states in the introduction: “The goal of the present biography is to create a fresh portrait of Washington that will make him real, credible, and charismatic in the same way that he was perceived by his contemporaries. By gleaning anecdotes and quotes from myriad sources, especially from hundreds of eyewitness accounts, I have tried to make him vivid and immediate, rather than the lifeless waxwork he has become for many Americans, and thereby elucidate the secrets of his uncanny ability to lead a nation.”

Below are selected excerpts from the book that I found particularly insightful:

Gouverneur Morris agreed that Washington had “the tumultuous passions which accompany greatness and frequently tarnish its luster. With them was his first contest, and his first victory was over himself…Yet those who have seen him strongly moved will bear witness that his wrath was terrible. They have seen, boiling in his bosom, passion almost too mighty for man.

What strikes one most about the twenty-year-old George Washington was that his sudden remarkable standing in the world was the result not so much of a slow. agonizing progress as of a series of rapid, abrupt leaps that thrust him into the topmost echelons of Virginia society. The deaths of those he loved most dearly had. ironically, brightened his prospects the most. Quite contrary to his own wishes, the untimely deaths of his father and his half-brother had endowed him with extraordinary advantages in the form of land, slaves, and social status. Every misfortune only pushed him further along his desired path. Most providential of all for him was that Lawrence Washington had expired on the eve of the French and Indian War, a conflict in which George’s newfound status as district adjutant would place him squarely at the forefront of a thunderous global confrontation.

Beneath the hard rind, Washington was far more sensitive than he appeared. and this heartfelt message from his men “affected him exceedingly,” he admitted. He had a fine sense of occasion, displayed in this early response to his men. Already adept at tearful farewells, he exhibited the succinct eloquence that came to define his speaking style. He began by calling the officers’ approval of his conduct “an honor that will constitute the greatest happiness of my fife and afford in my latest hours the most pleasing reflections.” Unable to avoid a youthful dig at Dinwiddle and Forbes, he hinted at the “uncommon difficulties” under which he had labored. But it was the palpable affection he summoned up for his men that made the statement noteworthy. Washington thanked his officers “with uncommon sincerity and true affection for the honor you have done me, for if I have acquired any reputation, it is from you I derive it. I thank you also for the love and regard you have all along shown me. It is in this I am rewarded. It is herein I glory.”

One thing that hasn’t aroused dispute is the exemplary nature of Washington’s religious tolerance. He shuddered at the notion of exploiting religion for partisan purposes or showing favoritism for certain denominations. As president, when writing to Jewish, Baptist, Presbyterian, and other congregations—he officially saluted twenty-two major religious groups—he issued eloquent statements on rel i tolerance. He was so devoid of spiritual bias that his tolerance even embraced atheism.

For all the many virtues he had shown in his life, nothing quite foreshadowed the wisdom, courage, fortitude, and resolution that George Washington had just exhibited. Adversity had brought his best traits to the surface and even ennobled him. Sensing it, Abigail Adams told her friend Mercy Otis Warren, “I am apt to think that our later misfortunes have called out the hidden excellencies of our commander-in-chief.” She quoted a line from the English poet Edward Young: “‘Affliction is the good man’s shining time.'” One consistent thread from his earlier life had prefigured these events: Washington’s tenacity of purpose, his singular ability to stalk a goal with all the resources at his disposal.

Instead of elevating himself above his men, Washington portrayed himself as their friend and peer. Having softened them up with personal history, he delivered an impassioned appeal to their deep-seated patriotism.

The man who had pulled off the exemplary feat of humbling the most powerful military on earth had not been corrupted by fame. Though quietly elated and relieved, he was neither intoxicated by power nor puffed up with a sense of his own genius.

As Benjamin Franklin told an English friend after the war, “An American planter was chosen by us to command our troops and continued during the whole war. This man sent home to you, one after another, five of your best generals, baffled, their heads bare of laurels, disgraced even in the opinion of their employers.”

Historians often quote a September 1786 letter from Washington to John Francis Mercer as signaling a major forward stride in his thinking on slavery: “I never mean (unless some particular circumstance should compel me to it) to possess another slave by purchase, it being among my first wishes to see some plan adopted by the legislature by which slavery in this country may be abolished by slow, sure, and imperceptible degrees.” But this noble statement then took a harsh turn. Washington mentioned being hard pressed by two debts—to retire one of which, “if there is no other resource, I must sell land or Negroes to discharge.” In other words. in a pinch, Washington would trade slaves to settle debts. Clearly, the abolition of slavery would have exacted too steep an economic price for Washington to contemplate serious action.

Washington was a perceptive man who, behind his polite facade, was unmatched at taking the measure of people. People did not always realize how observant he was.

The gist of many of Washington’s remarks was that French actions toward America had been motivated by self-interest, not ideological solidarity, and flouted American neutrality in seeking to enlist the United States in the war against England. The imbroglio with Monroe signaled the demise of yet another Washington friendship with a prominent Virginian, a list that now encompassed George Mason, James Madison, Thomas Jefferson, and Edmund Randolph.

The presidential legacy he left behind in Philadelphia was a towering one. As Gordon Wood has observed, “The presidency is the powerful office it is in large part because of Washington’s initial behavior.” Washington had forged the executive branch of the federal government, appointed outstanding department heads, and set a benchmark for fairness, efficiency, and integrity that future administrations would aspire to match.

Washington never achieved the national unity he desired and, by the end, presided over a deeply riven country…But whatever his or clamp down on his shrill opponents in the press who had hounded him mercilessly. To his everlasting credit, he showed that the American political system could manage tensions without abridging civil liberties. His most flagrant failings remained those of the country as a whole—the inability to deal forthrightly with the injustice of slavery or to figure out an equitable solution in the ongoing clashes with Native Americans.

Washington died in a manner that befit his life: with grace, dignity, self-possession, and a manifest regard for others. He never yielded to shrieks, hysteria. or unseemly complaints.

George Washington possessed the gift of inspired simplicity, a clarity and purity of vision that never failed him. Whatever petty partisan disputes swirled around him, he kept his eyes fixed on the transcendent goals that motivated his quest. As sensitive to criticism as any other man, he never allowed personal attacks or threats to distract him, following an inner compass that charted the way ahead. For a quarter century, he had stuck to an undeviating path that led straight to the creation of an independent republic, the enactment of the Constitution, and the formation of the federal government. History records few examples of a leader who so earnestly wanted to do the right thing, not just for himself but for his country. Avoiding moral shortcuts, he consistently upheld such high ethical standards that he seemed larger than any other figure on the political scene. Again and again the American people had entrusted him with power, secure in the knowledge that he would exercise it fairly and ably and surrender it when his term of office was up. He had shown that the president and commander-in-chief of a republic could possess a grandeur surpassing that of all the crowned heads of Europe. He brought maturity, sobriety, judgment, and integrity to a political experiment that could easily have grown giddy with its own vaunted success, and he avoided the backbiting, envy, and intrigue that detracted from the achievements of other founders. He had indeed been the indispensable man of the American Revolution.

A must read book about a key historical figure, not only for the US but for the world at large.

On Turn the Ship Around

I recently finished reading Turn the Ship Around by Captain, U.S. NAVY (Retired) L. David Marquet. Despite having very high expectations about this leadership and transformation journey, given the book’s high ratings, I can definitely say that the book exceeded them in every way. The leader-leader model advocated by David is one that resonates very strongly with me, and the practical and applied manner in which he presents the transformation journey he went through and how one can apply it within their own organization is to be commended.

Below I wanted to share a summary of insights from the book.

In the foreword by the late Stephen R. Covey, on why you want to read this book:

Our world’s bright future will be built by people who have discovered that leadership is the enabling art. It is the art of releasing human talent and potential. You may be able to “buy” a person’s back with a paycheck, position, power, or fear, but a human being’s genius, passion, loyalty, and tenacious creativity are volunteered only. The world’s greatest problems will be solved by passionate. unleashed “volunteers.” My definition of leadership is this: Leadership is communicating to people their worth and potential so clearly that they are inspired to see it in themselves. I don’t know of a finer model of this kind of empowering leadership than Captain Marquet’s. And in the pages Remember, leadership is a choice, not a position. I wish you well on your voyage!

David starts out by denouncing the shortcomings of the traditional leader-follower model:

We’re taught the solution is empowerment. The problem with empowerment programs is that they contain an inherent contradiction between the message and the method. While the message is “empowerment,” the method—it takes me to empower you—fundamentally disempowers employees. That drowns out the message. Additionally, in a leader-follower structure, the performance of the organization is closely linked to the ability of the leader. As a result, there is a natural tendency to develop personality-driven leadership. Followers gravitate toward the personality. Short-term performance is rewarded. When leaders who tend to do it all themselves and rely on personality depart, they are missed and performance can change significantly. Psychologically for the leader, this is tremendously rewarding. It is seductive. Psychologically for most followers, this is debilitating. The follower learns to rely on the leader to make all decisions rather than to fully engage with the work process to help make the organization run as efficiently as possible.

On the purpose of the book:

I imagine a world where we all find satisfaction in our work. It is a world where every human being is intellectually engaged. motivated, and self-inspired. Our cognitive capacity as a race is fully engaged in solving the monumental problems that we face. Ultimately, this book is a call to action, a manifesto, for all those frustrated workers and bosses for whom the current leadership structure just isn’t working. We need to reject leader-follower as a model and view the world as a place for leaders everywhere to achieve this vision. Whether you are a boss, an employee, a teacher, or a parent, you will find ways to work toward this goal.

On the importance of a questioning and curious attitude:

I am not advocating being ignorant about the equipment. For me, however, it was a necessary step to make me truly curious and reliant upon the crew in a way I wouldn’t have been without it. Later in my tour I became a technical expert on all aspects of Santa Fe, but the positive patterns had been set and I continued in the same relationship with the crew. If you walk about your organization talking to people, I’d suggest that you be as curious as possible. As with a good dinner table conversationalist, one question should naturally lead to another. The time to be questioning or even critical is after trust has been established.

Aim at achieving excellence, not just reducing errors:

Focusing on avoiding mistakes takes our focus away from becoming truly exceptional. Once a ship has achieved success merely in the form of preventing major errors and is operating in a competent way, mission accomplished, there is no need to strive further. I resolved to change this. Our goal would be excellence instead of error reduction. We would focus on exceptional operational effectiveness for the submarine. We would achieve great things.

Distributing control by itself is not enough:

We discovered that distributing control by itself wasn’t enough. As that happened, it put requirements on the new decision makers to have a higher level of technical knowledge and clearer sense of organizational purpose than ever before. That’s because decisions are made against a set of criteria that includes what’s technically appropriate and what aligns with the organization’s interests.

On his approach of changing culture:

When you’re trying to change employees’ behaviors, you have basically two approaches to choose from: change your own thinking and hope this leads to new behavior, or change your behavior and hope this leads to new thinking. On board Santa Fe, the officers and I did the latter, acting our way to new thinking. We didn’t have time to change thinking and let that percolate and ultimately change people’s actions; we just needed to change the behavior. Frankly, I didn’t care whether people thought differently at some point—and they eventually did—so long as they behaved in certain ways. I think there were likely some sailors who never understood what we were trying to do and resisted the change to leader-leader, but they behaved as if they believed.

On using regular conversations:

SHORT, EARLY CONVERSATIONS is a mechanism for CONTROL. It is a mechanism for control because the conversations did not consist of me telling them what to do. They were opportunities for the crew to get early feedback on how they were tackling problems. This allowed them to retain control of the solution. These early, quick discussions also provided clarity to the crew about what we wanted to accomplish. Many lasted only thirty seconds, but they saved hours of time…Here is a short list of “empowered phrases” that active doers use: I intend to…I plan on…I will…We will.

On resisting the urge to provide solutions and letting others react to situations:

RESIST THE URGE TO PROVIDE SOLUTIONS is a mechanism for CONTROL. When you follow the leader-leader model, you must take time to let others react to the situation as well. You have to create a space for open decision by the entire team, even if that space is only a few minutes, or a few seconds, long. This is harder than in the leader-follower approach because it requires you to anticipate decisions and alert your team to the need for an upcoming one. In a top-down hierarchy, subordinates don’t need to be thinking ahead because the boss will make a decision when needed.

On the importance of of improving the process as opposed to merely monitoring it:

In his book Out of the Crisis, W Edwards Deming lays out the leadership principles that became known as TQL, or Total Quality Leadership. This had a big effect on me. It showed me how efforts to improve the process made the organization more efficient, while efforts to monitor the process made the organization less efficient. What I hadn’t understood was the pernicious effect that “We are checking up on you” has on initiative, vitality, and passion until I saw it in action on Santa Fe.

On the need for constant communication among the team:

If you limit all discussion to crisp orders and eliminate all contextual discussion, you get a pretty quiet control room. That was viewed as good. We cultivated the opposite approach and encouraged a constant buzz of discussions among the watch officers and crew. By monitoring that level of buzz, more than the actual content, I got a good gauge of how well the ship was running and whether everyone was sharing information.

On deliberate action:

TAKE DELIBERATE ACTION is a mechanism for COMPETENCE. But selling the crew on this mechanism’s value was hard going. One problem in getting the crew to perform deliberately was the perception that deliberate action was for someone else’s (a supervisor’s, an inspector’s) benefit. Even though we continually talked about how deliberate action was to prevent the individual from making silly mistakes, I would overhear sailors discussing deliberate action among themselves in this misperceived way. The second problem was overcoming the perception that deliberate action was something you did as a training exercise. but in a “real situation,” you would just move your hands as fast as possible.

How to more effectively engage employees in training programs:

Want to have a training program that employees will want to go to? Here’s how it should work: 1) The purpose of training is to increase technical competence. 2) The result of increased technical competence is the ability to delegate increased decision making to the employees. 3) Increased decision making among your employees will naturally result in greater engagement, motivation, and initiative.

On active certification as opposed to passive briefings:

DON’T BRIEF, CERTIFY is a mechanism for COMPETENCE. Certification is also a decision point. It is possible to fail a certification. Individuals can reveal that they aren’t prepared to take part in an action because of their lack of knowledge or understanding. Otherwise, it’s just a brief. “Don’t brief, certify” became another example where we basically did the opposite of what we were supposed to.

On specifying goals, not the approach/method:

SPECIFYING GOALS, NOT METHODS is a mechanism for COMPETENCE. In our case, this was because the crew was motivated to devise the best approach to putting out the fire. Once they were freed from following a prescribed way of doing things they came up with many ingenious ways to shave seconds off our response time.

On the importance of clarity:

As more decision-making authority is pushed down the chain of command, it becomes increasingly important that everyone throughout the organization understands what the organization is about. This is called clarity, and it is the second supporting leg—along with competence—that is needed in order to distribute control…Build trust and take care of your people. Use your legacy for inspiration. Use guiding principles for decision criteria. Use immediate recognition to reinforce desired behaviors. Begin with the end in mind. Encourage a questioning attitude over blind obedience.

On the need for emancipation:

Empowerment is a necessary step because we’ve been accustomed to disempowerment. Empowerment is needed to undo all those top-down, do-what-you’re-told, be-a-team-player messages that result from our leader-follower model. But empowerment isn’t enough in a couple of ways…What we need is release, or emancipation. Emancipation is fundamentally different from empowerment. With emancipation we are recognizing the inherent genius, energy, and creativity in all people, and allowing those talents to emerge. We realize that we don’t have the power to give these talents to others, or “empower” them to use them, only the power to prevent them from coming out. Emancipation results when teams have been given decision-making control and have the additional characteristics of competence and clarity. You know you have an emancipated team when you no longer need to empower them. Indeed, you no longer have the ability to empower them because they are not relying on you as their source of power.

A highly recommended practical read in the areas of leadership and personal development.

The Innovator’s Solution

It is hard to read any business article, blog, journal or magazine without coming across the word innovation. And while the profile of this topic has risen to prominence in the last few years, it is one that has been thoroughly studied particularly by professor Clayton M. Christensen. He is considered by many as “the architect of and the world’s foremost authority on disruptive innovation.” A few years ago, I read his seminal book in that area – The Innovator’s Dilemma, and recently I finished reading his second – The Innovator’s Solution which he co-authored with Michael E. Raynor.

Below are the key lessons from it that I wanted to share with you.

On the premise of the book:

If I wanted to start a company that could become significant and successful and ultimately topple the firms that now lead an industry, how could I do it? If indeed there are predictable reasons why businesses stumble, we might then help managers avoid those causes of failure and help them make decisions that predictably lead to successful growth. This is The Innovator’s Solution.

This is a book about how to create new growth in business. Growth is important because companies create shareholder value through profitable growth. Yet there is powerful evidence that once a company’s core business has matured, the pursuit of new platforms for growth entails daunting risk. Roughly one company in ten is able to sustain the kind of growth that translates into an above-average increase in shareholder returns over more than a few years. Too often the very attempt to grow causes the entire corporation to crash. Consequently, most executives are in a no-win situation: equity markets demand that they grow, but it’s hard to know how to grow. Pursuing growth the wrong way can be worse than no growth at all.

Can innovation be made predictable? Can it be turned into a process?

What can make the process of innovation more predictable? It does not entail learning to predict what individuals might do. Rather, it comes from understanding the forces that act upon the individuals involved in building businesses—forces that powerfully influence what managers choose and cannot choose to do. Rarely does an idea for a new-growth business emerge fully formed from an innovative employee’s head. No matter how well articulated a concept or insight might be, it must be shaped and modified, often significantly, as it gets fleshed out into a business plan that can win funding from the corporation. Along the way, it encounters a number of highly predictable forces. Managers as individuals might indeed be idiosyncratic and unpredictable, but they all face forces that are similar in their mechanism of action, their timing, and their impact on the character of the product and business plan that the company ultimately attempts to implement. Understanding and managing these forces can make innovation more predictable.

We often admire the intuition that successful entrepreneurs seem to have for building growth businesses. When they exercise their intuition about what actions will lead to the desired results, they really are employing theories that give them a sense of the right thing to do in various circumstances. These theories were not there at birth; They were learned through a set of experiences and mentors earlier in life. If some people have learned the theories that we call intuition, then it is our hope that these theories also can be taught to others. This is our aspiration for this book. We hope to help managers who are trying to create new-growth businesses use the best research we have been able to assemble to learn how to match their actions to the circumstances in order to get the results they need. As our readers use these ways of thinking over and over, we hope that the thought processes inherent in these theories can become part of their intuition as well.

On the difference between sustaining innovation and disruptive innovation and the associate strategies associated with each:

We must emphasize that we do not argue against the aggressive pursuit of sustaining innovation…Almost always a host of similar companies enters an industry in its early years, and getting ahead of that crowd—moving up the sustaining-innovation trajectory more decisively than the others—is critical to the successful exploitation of the disruptive opportunity. But this is the source of the dilemma: Sustaining innovations are so important and attractive, relative to disruptive ones, that the very best sustaining companies systematically ignore disruptive threats and opportunities until the game is over. Sustaining innovation essentially entails making a better mousetrap. Starting a new company with a sustaining innovation isn’t necessarily a bad idea: Focused companies sometimes can develop new products more rapidly than larger firms because of the conflicts and distractions that broad scope often creates. The theory of disruption suggests, however, that once they have developed and established the viability of their superior product, entrepreneurs who have entered on a sustaining trajectory should turn around and sell out to one of the industry leaders behind them. If executed successfully, getting ahead of the leaders on the sustaining curve and then selling out quickly can be a straightforward way to make an attractive financial return…A sustaining-technology strategy is not a viable way to build new-growth businesses, however. If you create and attempt to sell a better product into an established market to capture established competitors’ best customers, the competitors will be motivated to fight rather than to flee. This advice holds even when the entrant is a huge corporation with ostensibly deeper pockets than the incumbent.

On where disruptive innovation occurs:

Because new-market disruptions compete against nonconsumption, the incumbent leaders feel no pain and little threat until the disruption is in its final stages. In fact, when the disruptors begin pulling customers out of the low-end of the original value network, it actually feels good to the leading firms, because as they move up-market in their own world, for a time they are replacing the low-margin revenues that disruptors steal, with higher-margin revenues from sustaining innovations.

We call disruptions that take root at the low-end of the original or mainstream value network low-end disruptions…New-market disruptions induce incumbents to ignore the attackers, and low-end disruptions motivate the incumbents to flee the attack.

And why do executives of existing companies segment markets counterproductively?

There are at least four reasons or countervailing forces in established companies that cause managers to target innovations at attribute-based market segments that are not aligned with the way that customers live their lives. The first two reasons—the fear of focus and the demand for crisp quantification—reside in companies’ resource allocation processes. The third reason is that the structure of many retail channels is attribute focused, and the fourth is that advertising economics influence companies to target products at customers rather than circumstances.

How can this be resolved?

Identifying disruptive footholds means connecting with specific jobs that people—your future customers—are trying to get done in their lives. The problem is that in an attempt to build convincing business cases for new products, managers are compelled to quantify the opportunities they perceive, and the data available to do this are typically cast in terms of product attributes or the demographic and psychographic profiles of a given population of potential consumers. This mismatch between the true needs of consumers and the data that shape most product development efforts leads most companies to aim their innovations at nonexistent targets. The importance of identifying these jobs to be done goes beyond simply finding a foothold. Only by staying connected with a given job as improvements are made, and by creating a purpose brand so that customers know what to hire, can a disruptive product stay on its growth trajectory.

On extracting growth from nonconsumption (new-market disruption pattern):

1. The target customers are trying to get a job done, but because they lack the money or skill, a simple, inexpensive solution has been beyond reach.

2. These customers will compare the disruptive product to having nothing at all. As a result, they are delighted to buy it even though it may not be as good as other products available at high prices to current users with deeper expertise in the original value network. The performance hurdle required to delight such new-market customers is quite modest.

3. The technology that enables the disruption might be quite sophisticated, but disruptors deploy it to make the purchase and use of the product simple, convenient, and foolproof. It is the “foolproofedness” that creates new growth by enabling people with less money and training to begin consuming.

4. The disruptive innovation creates a whole new value network. The new consumers typically purchase the product through new channels and use the product in new venues.

On what makes competing against nonconsumption so hard for existing companies?

In a very insightful stream of research, Harvard Business School Professor Clark Gilbert has helped us understand the fundamental mechanism that causes the established competitors in an industry to consistently cram the disruptive technology into the mainstream market. With that understanding, Gilbert also provides guidance to established company executives on how to avoid this trap, and capture the growth created by disruption instead. Gilbert’s work, fortunately, not only defines an innovator’s dilemma but suggests a way out. The solution is twofold: First, get top-level commitment by framing an innovation as a threat during the resource allocation process. Later, shift responsibility for the project to an autonomous organization that can frame it as an opportunity.

On determining the right scope for the business:

When the functionality and reliability of a product are not good enough to meet customers’ needs, then the companies that will enjoy significant competitive advantage are those whose product architectures are proprietary and that are integrated across the performance-limiting interfaces in the value chain. When functionality and reliability become more than adequate, so that speed and responsiveness are the dimensions of competition that are not now good enough, then the opposite is true. A population of non-integrated, specialized companies whose rules of interaction are defined by modular architectures and industry standards holds the upper hand. At the beginning of a wave of new-market disruption, the companies that initially will be the most successful will be integrated firms whose architectures are proprietary because the product isn’t yet good enough. After a few years of success in performance improvement, those disruptive pioneers themselves become susceptible to hybrid disruption by a faster and more flexible population of non-integrated companies whose focus gives them lower overhead costs.

On how to avoid commoditization:

1. The low-cost strategy of modular product assemblers is only viable as long as they are competing against higher-cost opponents. This means that as soon as they drive the high-cost suppliers of proprietary products out of a tier of the market, they must move up-market to take them on again in order to continue to earn attractive profits.

2. Because the mechanisms that constrain or determine how rapidly they can move up-market are the performance-defining subsystems, these elements become not good enough and are flipped to the left side of the disruption diagram.

3. Competition among subsystem suppliers causes their engineers to devise designs that are increasingly proprietary and interdependent. They must do this as they strive to enable their customers to deliver better performance in their end-use products than the customers could if they used competitors’ subsystems.

4. The leading providers of these subsystems therefore find themselves selling differentiated, proprietary products with attractive profitability.

5. This creation of a profitable, proprietary product is the beginning, of course, of the next cycle of commoditization and de-commoditization.

A reminder that integrated companies possess a strategic advantage in their ability to respond to changes of value across the value chain:

To the extent that an integrated company such as IBM can flexibly couple and decouple its operations, rather than irrevocably sell off operations, it has greater potential to thrive profitably for an extended period than does a nonintegrated firm such as Compaq. This is because the processes of commoditization and de-commoditization are continuously at work, causing the place where the money will be to shift across the value chain over time.

The concept of core competency, which is often used to determine which part of the value chain to keep in-house, is misguiding:

Core competence, as it is used by many managers, is a dangerously inward-looking notion. Competitiveness is far more about doing what customers value than doing what you think you’re good at. And staying competitive as the basis of competition shifts necessarily requires a willingness and ability to learn new things rather than clinging hopefully to the sources of past glory. The challenge for incumbent companies is to rebuild their ships while at sea, rather than dismantling themselves plank by plank while someone else builds a new. faster boat with what they cast overboard as detritus.

To successfully build and manage growth businesses you need the right people, processes and values:

Executives who are building new-growth businesses therefore need to do more than assign managers who have been to the right schools of experience to the problem. They must ensure that responsibility for making the venture successful is given to an organization whose processes will facilitate what needs to be done and whose values can prioritize those activities. The theory is that the requirements of an innovation need to fit with the host organization’s processes and values, or the innovation will not succeed.

On managing the strategy development process:

In every company there are two simultaneous processes through which strategy comes to be defined. Figure 8-1 suggests that both of these strategy-making processes—deliberate and emergent—are always operating in every company. The deliberate strategy-making process is conscious and analytical. It is often based on rigorous analysis of data on market growth, segment size, customer needs, competitors’ strengths and weaknesses, and technology trajectories. Strategy in this process typically is formulated in a project with a discrete beginning and end, and then implemented “top down.”…Emergent strategy, which as depicted in figure 8-1 bubbles up from within the organization, is the cumulative effect of day-to-day prioritization and investment decisions made by middle managers, engineers, salespeople, and financial staff. These tend to be tactical, day-to-day operating decisions that are made by people who are not in a visionary, futuristic, or strategic state of mind…When the efficacy of a strategy that was developed through an emergent process is recognized, it is possible to formalize it, improve it, and exploit it, thus transforming an emergent strategy into a deliberate one. Emergent processes should dominate in circumstances in which the future is hard to read and in which it is not clear what the right strategy should be. This is almost always the case during the early phases of a company’s life. However, the need for emergent strategy arises whenever a change in circumstances portends that the formula that worked in the past may not be as effective in the future. On the other hand, the deliberate strategy process should be dominant once a winning strategy has become clear, because in those circumstances effective execution often spells the difference between success and failure.

On the execution of the strategy, three points of leverage:

1. Carefully control the initial cost structure of a new-growth business, because this quickly will determine the values that will drive the critical resource allocation decisions in that business.

2. Actively accelerate the process by which a viable strategy emerges by ensuring that business plans are designed to test and confirm critical assumptions using tools such as discovery-driven planning.

3. Personally and repeatedly intervene, business by business, exercising judgment about whether the circumstance is such that the business needs to follow an emergent or deliberate strategy-making process. CEOs must not leave the choice about strategy process to policy, habit, or culture.

General rules of thumbs relating to the financial management of growth businesses:

  • Launch new-growth businesses regularly when the core is still healthy —when it can still be patient for growth—not when financial results signal the need.
  • Keep dividing business units so that as the corporation becomes increasingly large, decisions to launch growth ventures continue to be made within organizational units that can be patient for growth because they are small enough to benefit from investing in small opportunities.
  • Minimize the use of profit from established businesses to subsidize losses in new-growth businesses. Be impatient for profit: There is nothing like profitability to ensure that a high-potential business can continue to garner the funding it needs, even when the corporation’s core businesses turn sour.

On a concluding note:

Many successful companies have disrupted once. A few, including IBM, Intel, Microsoft, Hewlett-Packard, Johnson & Johnson, Kodak, Cisco, and Intuit, have disrupted several times. Sony did it repeatedly between 1955 and 1982, before its engine of disruption got shut down. To our knowledge, no company has been able to build an engine of disruptive growth and keep it running and running. That reality has made this a risky book for us to write: Few business books say “Do this; no one’s ever done it before.” But there is little choice. Creating and sustaining successful growth has, historically speaking, vexed some great managers. Given the existence of principles but no precedent, we have simply done our best to suggest how successful growth can be created and sustained. We have offered an integrated body of theory derived from the successes and the failures of hundreds of different companies, each of which has illuminated a different aspect of the innovator’s dilemma. And so we now pass the baton to you, in the hope that you will find our efforts to be a valuable foundation upon which to build your own innovator’s solution.

I highly recommend this book, as a follow-on to Clayton’s earlier work.