management

On Common Sense on Mutual Funds

I recently finished reading Common Sense on Mutual Funds – New Imperatives for the Intelligent Investor – by John C. Bogle.

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

Investing is an act of faith. We entrust our capital to corporate stewards in the faith—at least with the hope—that their efforts will generate high rates of return on our investments. When we purchase corporate America’s stocks and bonds, we are professing our faith that the long-term success of the U.S. economy and the nation’s financial markets will continue in the future.

To state the obvious, the long-term investor who pays least has the greatest opportunity to earn most of the real return provided by the stock market.

In my view, market timing and rapid turnover—both by and for mutual fund investors—betray both a lack of understanding of the economics of investing and an infatuation with the process of investing.

My guidelines also respect what I call the four dimensions of investing: (1) return, (2) risk, (3) cost, and (4) time. When you select your portfolio’s long-term allocation to stocks and bonds, you must make a decision about the real returns you can expect to earn and the risks to which your portfolio will be exposed. You must also consider the costs of investing that you will incur. Costs will tend to reduce your return and/or increase the risks you must take. Think of return, risk, and cost as the three spatial dimensions—the length, breadth, and width—of a cube. Then think of time as the temporal fourth dimension that interplays with each of the other three. For instance, if your time horizon is long, you can afford to take more risk than if your horizon is short, and vice versa.

Rule 1: Select Low-Cost Funds…Rule 2: Consider Carefully the Added Costs of Advice…Rule 3: Do Not Overrate Past Fund Performance…Rule 4: Use Past Performance to Determine Consistency and Risk…Rule 5: Beware of Stars…Rule 6: Beware of Asset Size…Rule 7: Don’t Own Too Many Funds…Rule 8: Buy Your Fund Portfolio—And Hold It.

No matter what fund style you seek, you should emphasize low-cost funds and eschew high-cost funds. And, for the best bet of all, you should consider indexing in whichever style category you want to include.

There are three major reasons why large size inhibits the achievement of superior returns: the universe of stocks available for a fund’s portfolio declines; transaction costs increase; and portfolio management becomes increasingly structured, group-oriented, and less reliant on savvy individuals.

Four principal problems are created by this overemphasis on marketing. First, it costs mutual fund shareholders a great deal of money— billions of dollars of extra fund expenses—which reduces the returns received by shareholders. Second, these large expenditures not only offer no countervailing benefit in terms of shareholder returns, but, to the extent they succeed in bringing additional assets into the funds, have a powerful tendency to further reduce fund returns. Third, mutual funds are too often hyped and hawked, and trusting investors may be imperiled by the risks assumed by, and deluded about the potential returns of, the funds. Lastly, and perhaps most significant of all, the distribution drive alters the relationship between investors and funds. Rather than being perceived as an owner oi the fund, the shareholder is perceived as a mere customer of the adviser.

On a closing note, on leadership:

To wrap up this litany, I put before you—both tentatively and humbly—a final attribute of leadership: courage. Sometimes, an enterprise has to dig down deep and have the courage of its convictions—to “press on,” regardless of adversity or scorn. Vanguard has been a truly contrarian firm in its mutual structure, in its drive for low costs and a fair shake for investors, in its conservative investment philosophy, in market index funds, and in shunning hot products, marketing gimmicks, and the carpet-bombing approach to advertising so abundantly evident elsewhere in this industry today. Sometimes, it takes a lot of courage to stay the course when fickle taste is in the saddle, but we have stood by our conviction: In the long run, when there is a gap between perception and reality, it is only a matter of time until reality carries the day.

A recommended read in the areas of investing and leadership.

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.

The Self-Aware Leader

I recently finished reading The Self-Aware Leader – A Proven Model for Reinventing Yourself – by Daniel P. Gallagher and Joseph Coastal.

Below are key insights from the book, that I found to be particularly insightful:

Two important keys to leadership success are to: (1) reinvent to remain relevant and (2) make moves that are proactive, not reactive. Middle managers need to be reminded that they are the masters of their own destiny Your position in the middle affords you greater reach and access. You communicate with more players than anyone else at the table, because you are, after all, in the middle of all the action. People look to you before making their own moves and you need to do the same. Self-aware leaders grow on their own, predicting and shaping change by observing the patterns of others to influence their own patterns of behavior.

Perhaps the most important lesson of this book is that it teaches you how to leverage self-awareness in specific ways that drive professional reinvention. The guiding light for your reinvention journey is an interdependent model with three elements: the reinvention of self, the reinvention of others, and the reinvention of business.

Reinvent Self teaches you how to g;row new skills and leverage these on a larger platform on which imaginative ideas become substantive solutions. Reinvent Others teaches you how to use inclusion and collaboration as a tool for increasing the productivity of others, and therefore yourself. Reinvent the Business creates a lens for you to look at your organization, projects, and decisions in terms of profits, products, services, and people.

In the end, readers will walk away from this book with two key takeaways: a new mental framework on leadership, a functional, practical plan for putting it into practice.

Reinvention is about proactively anticipating the need to shift how you create value as a leader. It’s a way of ensuring your relevance as a leader and being ahead of the change curve. Self-awareness is what triggers you to know it s time to reinvent. There are three aspects of the reinvention model: Self: Find new skills that make you more relevant than last year. Others: Find ways to add value by helping others to be more valuable. Business: Find opportunities to upgrade the business before your competition does. Self-aware leaders know to reinvent before being asked. They take time to observe what’s needed and use that insight to adjust their leadership portfolio.

Professional authenticity is about bringing as much of your true self as is appropriate. Appropriateness should be based on what you want (not what your employer wants). Self-awareness of your professional authenticity is like brand management for yourself; you need to understand how others perceive you. Other points emphasized in this chapter include: Self-assessment on variables such as trust, rapport, and feedback from others is one method to analyzing the professional authenticity you have with others. Not bringing your true self to work will negatively influence your personal contentment with work and your ability to productively contribute. Reinvention within professional authenticity is about letting you be you—so you can be more productive and more fulfilled. You could also help do the same with others.

Embrace the fact that business literacy is leadership development. There is an extreme difference between coaching and profitable coaching. It’s no different than the difference between growth and profitable growth. One is simply more, the other is magnificent. Learning the key elements of a coaching conversation is generally simple. Define the difference between a result and a behavior, clarify how to position the conversation so the coachee owns it, and be a good listener through the process. You can use a five-step model and rectangle model or no model at all. What makes the difference between good and great coaches is that they know what drives the business and how their employees contribute. If they look at a weekly or monthly report that shows numerous productivity metrics, how do they know which one they should coach about?

Self-aware leaders know their people and their business. They make decisions every day on what and how to prioritize. If their business is evolving, leaders need to be taught how the definition of success has been altered. As the definition of insanity states, you cannot expect to do the same thing and get different results.

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

On The Lean Startup

I recently finished reading The Lean Startup – How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses – by Eric Ries. This book has been in my to-read list for quite some time, and has been recommended to me by several friends over the past few years. I am very glad that I was finally able to read this gem in entrepreneurship and management.

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

After more than ten years as an entrepreneur, I came to reject that line of thinking. I have learned from both my own successes and failures and those of many others that it’s the boring stuff hat matters the most. Startup success is not a consequence of good genes or being in the right place at the right time. Startup success can be engineered by following the right process, which means it can be learned, which means it can be taught. Entrepreneurship is a kind of management. No, you didn’t read that wrong. We have wildly divergent associations with these two words, entrepreneurship and management.

This is a book for entrepreneurs and the people who hold them accountable. The five principles of the Lean Startup, which inform all three parts of this book, are as follows: 1. Entrepreneurs are everywhere. 2. Entrepreneurship is management. 3. Validated learning. 4. Build-Measure-Learn. 5. Innovation accounting.

The Lean Startup method, in contrast, is designed to teach you how to drive a startup. Instead of making complex plans that are based on a lot of assumptions, you can make constant adjustments with a steering wheel called the Build-Measure-Learn feedback loop. Through this process of steering, we can learn when and if it’s time to make a sharp turn called a pivot or whether we should persevere along our current path. Once we have an engine that’s revved up, the Lean Startup offers methods to scale and grow the business with maximum acceleration.

Mark explained, “Traditionally, the product manager says, ‘I just want this.’ In response, the engineer says, ‘I’m going to build it.’ Instead, I try to push my team to first answer four questions: 1. Do consumers recognize that they have the problem you are trying to solve? 2. If there was a solution, would they buy it? 3. Would they buy it from us? 4. Can we build a solution for that problem?”

What differentiates the success stories from the failures is that the successful entrepreneurs had the foresight, the ability, and the tools to discover which parts of their plans were working brilliantly and which were misguided, and adapt their strategies accordingly.

Thus, for startups, I believe in the following quality principle: If we do not know who the customer is, we do not know what quality is.

These examples from Grockit demonstrate each of the three A’s of metrics: actionable, accessible, and auditable.

My goal in advocating a scientific approach to the creation of startups is to channel human creativity into its most productive form, and there is no bigger destroyer of creative potential than the misguided decision to persevere. Companies that cannot bring themselves to pivot to a new direction on the basis of feedback from the marketplace can get stuck in the land of the living dead, neither growing enough nor dying, consuming resources and commitment from employees and other stakeholders but not moving ahead.

For the Five Whys to work properly, there are rules that must be followed. For example, the Five Whys requires an environment of mutual trust and empowerment. In situations in which this is lacking, the complexity of Five Whys can be overwhelming. In such situations, I’ve often used a simplified version that still allows teams to focus on analyzing root causes while developing the muscles they’ll need later to tackle the full-blown method. I ask teams to adopt these simple rules: L Be tolerant of all mistakes the first time. 2. Never allow the same mistake to be made twice.

I highly recommend this book!

On Emotions Revealed

I recently finished read Emotions Revealed – Recognizing Faces and Feelings to Improve Communication and Emotional Life – by Paul Ekman. This book was recommended by best-selling author Daniel Pink as one of the top 6 books on the Art and Science of Sales. This book’s aim, as best summarized by the author: “My goal in writing Emotions Revealed was to help people improve four essential skills, and thus I have included suggestions and exercises in the book that I hope you will find both helpful and provocative. Those four skills are: First, becoming more i consciously aware of when you are becoming emotional, even before you speak or act…Second, choosing how you behave when you are emotional, so you achieve your goals without damaging other people…Third, becoming more sensitive to how others are feeling…Fourth, carefully using the information you acquire about how others are feeling.”

Below are key excerpts from this book:

Emotions determine the quality of our lives. They occur in every relationship we care about—in the workplace, in our friendships, in dealings with family members, and in our most intimate relationships. They can save our lives, but they can also cause real damage. They may lead us to act in ways that we think are realistic and appropriate, but our emotions can also lead us to act in ways we regret terribly afterward.

I reconciled our findings that expressions are universal with Birdwhistell’s observation of how they differ from one culture to another by coming up with the idea of display rules. These, I proposed, are socially learned, often culturally different, rules about the management of expression, about who can show which emotion to whom and when they can do so. It is why in most public sporting contests the loser doesn’t show the sadness and disappointment he or she reels. Display rules are embodied in the parent’s admonition—”Get that smirk off your face.” These rules may dictate that we diminish. exaggerate, hide completely, or mask the expression of emotion we are feeling.

Nearly everyone who does research on emotion today agrees with what I have described so far: first, that emotions are reactions to matters that seem to be very important to our welfare, and second, that emotions often begin so quickly that we are not aware of the processes in our mind that set them off Research on the brain is consistent with what I have so far suggested. We can make very complex evaluations very quickly, in milliseconds, without being aware of the evaluative process.

I am convinced that one of the most distinctive features of emotion is that the events that trigger emotions are influenced not just by our individual experience, but also by our ancestral past. Emotions, in the felicitous phrase of Richard Lazarus, reflect the “wisdom of the ages,” both in the emotion themes and the emotion responses. The autoappraisers are scanning for what has been important to survival not just in our own individual lives, but also in the lives of our hunter-gatherer ancestors.

In another study focusing just on smiles, Richard Davidson, a psychologist who studies the brain and emotion, and I found that making a smile produced many of the changes in the brain that occur with enjoyment. It wasn’t just any kind of smile; only the smile that I had earlier found truly signified enjoyment (see chapter 9).

I have described nine paths for accessing or turning on our emotions. The most common one is through the operation of the autoappraisers, the automatic-appraising mechanisms. A second path begins in reflective appraisal that then clicks on the autoappraisers. Memory of a past emotional experience is a third path, and imagination is a fourth path. Talking about a past emotional event is a fifth path. Empathy is the sixth path. Others instructing us about what to be emotional about is the seventh path. Violation of social norms is an eighth path. Last is voluntarily assuming the appearance of emotion.

Controlling emotional behavior will not always work. When the emotion aroused is very strong, when we are in a mood that predisposes us toward the emotion, when the event resonates very closely with one of the evolved emotional themes or with an early learned emotion trigger, my suggestions will be more difficult to use. And, depending on the emotion, some people’s affective style—those who characteristically become emotional very quickly and very intensely—will make it harder to control some emotions. The fact that we will not always succeed does not mean that we cannot improve. The key is to understand ourselves better. By analyzing our emotional episodes afterward, we can begin to develop the habit of attentiveness. By learning to focus more on what it is we are feeling, by learning some of the internal clues that signal to us what emotions we are feeling, we are more likely to be able to monitor our feelings. Increasing our ability to spot the signs of how others are responding to us emotionally can alert us to be attentive to what it is we are doing and feeling—and help us respond to others’ emotions in an appropriate way. And, learning about the common triggers for each emotion, those we share with others and those that are especially important or unique for us, can help us prepare for emotional encounters.

These examples are meant to show that having information about how someone feels doesn’t itself tell vou what to do about it. It doesn’t confer the right or obligation to tell that person you know how he or she feels. There are alternatives, depending on who that person is and what your relationship to that person is, the circumstances at the moment, and what you yourself are comfortable with. But spotting sadness when it is subtle does tell you that something important is happening or has happened, that it involves loss, and that this person needs comforting. The expression itself doesn’t tell you whether you are the right person to give that comforting, or if this is the right time to offer it.

We often think we know why someone has become angry with us, but our version of the grievance may not match the other person’s version. While avoiding what makes someone angry leads to resentments, building a backlog of trouble, rarely should the matter be dealt with when one or both people are in the heat of their anger. If it is so urgent that the matter must be dealt with at once, and it cannot be postponed until a cooler moment, then it is important that both people try to be certain that they are past the refractory period. Otherwise, the discussion is bound only to fuel the anger. not focus on what the problem is and how it can be solved.

Neither empathy nor compassion is an emotion; they refer to our reactions to another person’s emotions. In cognitive empathy we recognize what another person is feeling. In emotional empathy we actually feel what that person is feeling, and in compassionate empathy we want to help the other person deal with his situation and his emotions. We must have cognitive empathy, in order to achieve either of the other forms of empathy, but we need not have emotional empathy in order to have compassionate empathy.

While all four of these contextual issues must be considered when evaluating a normal facial expression, or macro expression, of an emotion, they can be especially revelatory when studying a micro expression. They must also be considered when evaluating signs of emotion in the voice, in posture, and in other cognitively based clues to deceit. Most people do not notice micro expressions when they occur during a conversation, when a micro is competing for attention with words, the tone of the voice, and gestures. They are ; also missed because we are often distracted by thinking about what to say next rather than closely watching for a person’s micro expressions.

As I mention in chapter 9, the great French neurologist Duchenne du Boulogne was the first to suggest that the absence of emotion-based muscle movements that most people cannot perform voluntarily “unmasks the false friend.”‘ The absence of such involuntary movements suggests that the expression may be fabricated rather than genuine.

More generally, we have not found any behavioral change that always occurs in every person who is lying; that is why lie catchers must learn to be alert to every aspect of demeanor, tor it is never possible to know ahead of time how important information will appear. This news always disheartens television interviewers and print media writers, who are disappointed I can’t tell them the one surefire behavioral clue to deceit. It doesn’t exist. Anyone who says there is an absolutely reliable signal that someone is lying is either misguided or a charlatan.

A very perceptive and recommended read.

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.

dweck_mindset

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 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 48 Laws Of Power

I recently finished reading The 48 Laws of Power by Robert Greene.

Greene on Power, and the importance of developing Emotional Intelligence:

Power is a social game. To learn and master it, you must develop the ability to study and understand people…To be a master player you must also be a master psychologist. You must recognize motivations and see through the cloud of dust with which people surround their actions. An understanding of people’s hidden motives is the single greatest piece of knowledge you can have in acquiring power… People are of infinite complexity and you can spend a lifetime watching them without ever fully understanding them. So it is all the more important, then, to begin your education now. In doing so you must also keep one principle in mind: Never discriminate as to whom you study am whom you trust. Never trust anyone completely and study everyone, including friends and loved ones. Finally, you must learn always to take the indirect route to power. Disguise your cunning. Like a billiard ball that caroms several times before it hits its target, your moves must be planned and developed in the least obvious way. By training yourself to be indirect, you can thrive in the modem court, appearing the paragon of decency while being the consummate manipulator.

The book’s main premise:

Consider The 48 Laws of Power a kind of handbook on the arts of indirection. The laws are based on the writings of men and women who have studied and mastered the game of power. These writings span a period of more than three thousand years and were created in civilizations as disparate as ancient China and Renaissance Italy; yet they share common threads and themes, together hinting at an essence of power that has yet to be fully articulated. The 48 laws of power are the distillation of this accumulated wisdom, gathered from the writings of the most illustrious strategists (Sun-tzu, Clausewitz), statesmen (Bismarck, Talleyrand), courtiers (Castighone, Gracian), seducers (Ninon de Lenclos, Casanova), and con artists (“Yellow Kid” Weil) in history. The laws have a simple premise: Certain actions almost always increase one’s power (the observance of the law), while others decrease it and even ruin us (the transgression of the law). These transgressions and observances are illustrated by historical examples. The laws are timeless and definitive.

The 48 Laws of Power:

Law 1: Never Outshine the Master

Always make those above you feel comfortably superior.  In your desire to please or impress them, do not go too far in displaying your talents or you might accomplish the opposite – inspire fear and insecurity.  Make your masters appear more brilliant than they are and you will attain the heights of power.

Law 2: Never put too Much Trust in Friends, Learn how to use Enemies

Be wary of friends-they will betray you more quickly, for they are easily aroused to envy.  They also become spoiled and tyrannical. But hire a former enemy and he will be more loyal than a friend, because he has more to prove.  In fact, you have more to fear from friends than from enemies.  If you have no enemies, find a way to make them.

Law 3: Conceal your Intentions

Keep people off-balance and in the dark by never revealing the purpose behind your actions.  If they have no clue what you are up to, they cannot prepare a defense.  Guide them far enough down the wrong path, envelope them in enough smoke, and by the time they realize your intentions, it will be too late.

Law 4: Always Say Less than Necessary

When you are trying to impress people with words, the more you say, the more common you appear, and the less in control.  Even if you are saying something banal, it will seem original if you make it vague, open-ended, and sphinxlike.  Powerful people impress and intimidate by saying less.  The more you say, the more likely you are to say something foolish.

 Law 5: So Much Depends on Reputation – Guard it with your Life

Reputation is the cornerstone of power.  Through reputation alone you can intimidate and win; once you slip, however, you are vulnerable, and will be attacked on all sides.  Make your reputation unassailable.  Always be alert to potential attacks and thwart them before they happen.  Meanwhile, learn to destroy your enemies by opening holes in their own reputations.  Then stand aside and let public opinion hang them.

 Law 6: Court Attention at all Cost

Everything is judged by its appearance; what is unseen counts for nothing.  Never let yourself get lost in the crowd, then, or buried in oblivion.  Stand out.  Be conspicuous, at all cost.  Make yourself a magnet of attention by appearing larger, more colorful, more mysterious, than the bland and timid masses.

  Law 7: Get others to do the Work for you, but Always Take the Credit

Use the wisdom, knowledge, and legwork of other people to further your own cause.  Not only will such assistance save you valuable time and energy, it will give you a godlike aura of efficiency and speed.  In the end your helpers will be forgotten and you will be remembered.  Never do yourself what others can do for you.

 Law 8: Make other People come to you – use Bait if Necessary

When you force the other person to act, you are the one in control.  It is always better to make your opponent come to you, abandoning his own plans in the process.  Lure him with fabulous gains – then attack.  You hold the cards.

 Law 9: Win through your Actions, Never through Argument

Any momentary triumph you think gained through argument is really a Pyrrhic victory:  The resentment and ill will you stir up is stronger and lasts longer than any momentary change of opinion.  It is much more powerful to get others to agree with you through your actions, without saying a word.  Demonstrate, do not explicate.

Law 10: Infection: Avoid the Unhappy and Unlucky

You can die from someone else’s misery – emotional states are as infectious as disease.  You may feel you are helping the drowning man but you are only precipitating your own disaster.  The unfortunate sometimes draw misfortune on themselves; they will also draw it on you.  Associate with the happy and fortunate instead.

Law 11: Learn to Keep People Dependent on You

To maintain your independence you must always be needed and wanted.  The more you are relied on, the more freedom you have.  Make people depend on you for their happiness and prosperity and you have nothing to fear.  Never teach them enough so that they can do without you.

 Law 12: Use Selective Honesty and Generosity to Disarm your Victim

One sincere and honest move will cover over dozens of dishonest ones.  Open-hearted gestures of honesty and generosity bring down the guard of even the most suspicious people.  Once your selective honesty opens a hole in their armor, you can deceive and manipulate them at will.  A timely gift – a Trojan horse – will serve the same purpose.

 Law 13: When Asking for Help, Appeal to People’s Self-Interest, Never to their Mercy or Gratitude

If you need to turn to an ally for help, do not bother to remind him of your past assistance and good deeds.  He will find a way to ignore you.  Instead, uncover something in your request, or in your alliance with him, that will benefit him, and emphasize it out of all proportion.  He will respond enthusiastically when he sees something to be gained for himself.

 Law 14: Pose as a Friend, Work as a Spy

Knowing about your rival is critical.  Use spies to gather valuable information that will keep you a step ahead.  Better still: Play the spy yourself.  In polite social encounters, learn to probe.  Ask indirect questions to get people to reveal their weaknesses and intentions.  There is no occasion that is not an opportunity for artful spying.

 Law 15: Crush your Enemy Totally

All great leaders since Moses have known that a feared enemy must be crushed completely.  (Sometimes they have learned this the hard way.)  If one ember is left alight, no matter how dimly it smolders, a fire will eventually break out.  More is lost through stopping halfway than through total annihilation:  The enemy will recover, and will seek revenge.  Crush him, not only in body but in spirit.

 Law 16: Use Absence to Increase Respect and Honor

Too much circulation makes the price go down:  The more you are seen and heard from, the more common you appear.  If you are already established in a group, temporary withdrawal from it will make you more talked about, even more admired.  You must learn when to leave.  Create value through scarcity.

 Law 17: Keep Others in Suspended Terror: Cultivate an Air of Unpredictability

Humans are creatures of habit with an insatiable need to see familiarity in other people’s actions.  Your predictability gives them a sense of control.  Turn the tables: Be deliberately unpredictable.  Behavior that seems to have no consistency or purpose will keep them off-balance, and they will wear themselves out trying to explain your moves.  Taken to an extreme, this strategy can intimidate and terrorize.

Law 18: Do Not Build Fortresses to Protect Yourself – Isolation is Dangerous

The world is dangerous and enemies are everywhere – everyone has to protect themselves.  A fortress seems the safest. But isolation exposes you to more dangers than it protects you from – it cuts you off from valuable information, it makes you conspicuous and an easy target.  Better to circulate among people find allies, mingle.  You are shielded from your enemies by the crowd.

Law 19: Know Who You’re Dealing with – Do Not Offend the Wrong Person

There are many different kinds of people in the world, and you can never assume that everyone will react to your strategies in the same way.  Deceive or outmaneuver some people and they will spend the rest of their lives seeking revenge.  They are wolves in lambs’ clothing.  Choose your victims and opponents carefully, then – never offend or deceive the wrong person.

Law 20: Do Not Commit to Anyone

It is the fool who always rushes to take sides.  Do not commit to any side or cause but yourself.  By maintaining your independence, you become the master of others – playing people against one another, making them pursue you.

Law 21: Play a Sucker to Catch a Sucker – Seem Dumber than your Mark

No one likes feeling stupider than the next persons.  The trick, is to make your victims feel smart – and not just smart, but smarter than you are.  Once convinced of this, they will never suspect that you may have ulterior motives.

Law 22: Use the Surrender Tactic: Transform Weakness into Power

When you are weaker, never fight for honor’s sake; choose surrender instead.  Surrender gives you time to recover, time to torment and irritate your conqueror, time to wait for his power to wane.  Do not give him the satisfaction of fighting and defeating you – surrender first.  By turning the other check you infuriate and unsettle him.  Make surrender a tool of power.

Law 23: Concentrate Your Forces

Conserve your forces and energies by keeping them concentrated at their strongest point.  You gain more by finding a rich mine and mining it deeper, than by flitting from one shallow mine to another – intensity defeats extensity every time.  When looking for sources of power to elevate you, find the one key patron, the fat cow who will give you milk for a long time to come.

Law 24: Play the Perfect Courtier

The perfect courtier thrives in a world where everything revolves around power and political dexterity.  He has mastered the art of indirection; he flatters, yields to superiors, and asserts power over others in the mot oblique and graceful manner.  Learn and apply the laws of courtiership and there will be no limit to how far you can rise in the court.

Law 25: Re-Create Yourself

Do not accept the roles that society foists on you.  Re-create yourself by forging a new identity, one that commands attention and never bores the audience.  Be the master of your own image rather than letting others define if for you.  Incorporate dramatic devices into your public gestures and actions – your power will be enhanced and your character will seem larger than life.

Law 26: Keep Your Hands Clean

You must seem a paragon of civility and efficiency: Your hands are never soiled by mistakes and nasty deeds.  Maintain such a spotless appearance by using others as scapegoats and cat’s-paws to disguise your involvement.

Law 27: Play on People’s Need to Believe to Create a Cultlike Following

People have an overwhelming desire to believe in something.  Become the focal point of such desire by offering them a cause, a new faith to follow.  Keep your words vague but full of promise; emphasize enthusiasm over rationality and clear thinking.  Give your new disciples rituals to perform, ask them to make sacrifices on your behalf.  In the absence of organized religion and grand causes, your new belief system will bring you untold power.

Law 28: Enter Action with Boldness

If you are unsure of a course of action, do not attempt it.  Your doubts and hesitations will infect your execution.  Timidity is dangerous:  Better to enter with boldness.  Any mistakes you commit through audacity are easily corrected with more audacity. Everyone admires the bold; no one honors the timid.

Law 29: Plan All the Way to the End

The ending is everything.  Plan all the way to it, taking into account all the possible consequences, obstacles, and twists of fortune that might reverse your hard work and give the glory to others.  By planning to the end you will not be overwhelmed by circumstances and you will know when to stop.  Gently guide fortune and help determine the future by thinking far ahead.

Law 30: Make your Accomplishments Seem Effortless

Your actions must seem natural and executed with ease.  All the toil and practice that go into them, and also all the clever tricks, must be concealed.  When you act, act effortlessly, as if you could do much more.  Avoid the temptation of revealing how hard you work – it only raises questions.  Teach no one your tricks or they will be used against you.

Law 31: Control the Options: Get Others to Play with the Cards you Deal

The best deceptions are the ones that seem to give the other person a choice:  Your victims feel they are in control, but are actually your puppets.  Give people options that come out in your favor whichever one they choose.  Force them to make choices between the lesser of two evils, both of which serve your purpose.  Put them on the horns of a dilemma:  They are gored wherever they turn.

Law 32: Play to People’s Fantasies

The truth is often avoided because it is ugly and unpleasant.  Never appeal to truth and reality unless you are prepared for the anger that comes for disenchantment.  Life is so harsh and distressing that people who can manufacture romance or conjure up fantasy are like oases in the desert:  Everyone flocks to them. There is great power in tapping into the fantasies of the masses.

Law 33: Discover Each Man’s Thumbscrew

Everyone has a weakness, a gap in the castle wall.  That weakness is usual y an insecurity, an uncontrollable emotion or need; it can also be a small secret pleasure.  Either way, once found, it is a thumbscrew you can turn to your advantage.

Law 34: Be Royal in your Own Fashion:  Act like a King to be treated like one

The way you carry yourself will often determine how you are treated; In the long run, appearing vulgar or common will make people disrespect you.  For a king respects himself and inspires the same sentiment in others.  By acting regally and confident of your powers, you make yourself seem destined to wear a crown.

Law 35: Master the Art of Timing

Never seem to be in a hurry – hurrying betrays a lack of control over yourself, and over time.  Always seem patient, as if you know that everything will come to you eventually.  Become a detective of the right moment; sniff out the spirit of the times, the trends that will carry you to power.  Learn to stand back when the time is not yet ripe, and to strike fiercely when it has reached fruition.

Law 36: Disdain Things you cannot have:  Ignoring them is the best Revenge

By acknowledging a petty problem you give it existence and credibility.  The more attention you pay an enemy, the stronger you make him; and a small mistake is often made worse and more visible when you try to fix it.  It is sometimes best to leave things alone.  If there is something you want but cannot have, show contempt for it.  The less interest you reveal, the more superior you seem.

Law 37: Create Compelling Spectacles

Striking imagery and grand symbolic gestures create the aura of power – everyone responds to them.  Stage spectacles for those around you, then full of arresting visuals and radiant symbols that heighten your presence.  Dazzled by appearances, no one will notice what you are really doing.

Law 38: Think as you like but Behave like others

If you make a show of going against the times, flaunting your unconventional ideas and unorthodox ways, people will think that you only want attention and that you look down upon them.  They will find a way to punish you for making them feel inferior.  It is far safer to blend in and nurture the common touch. Share your originality only with tolerant friends and those who are sure to appreciate your uniqueness.

Law 39: Stir up Waters to Catch Fish

Anger and emotion are strategically counterproductive.  You must always stay calm and objective.  But if you can make your enemies angry while staying calm yourself, you gain a decided advantage.  Put your enemies off-balance: Find the chink in their vanity through which you can rattle them and you hold the strings.

Law 40: Despise the Free Lunch

What is offered for free is dangerous – it usually involves either a trick or a hidden obligation.  What has worth is worth paying for.  By paying your own way you stay clear of gratitude, guilt, and deceit.  It is also often wise to pay the full price – there is no cutting corners with excellence.  Be lavish with your money and keep it circulating, for generosity is a sign and a magnet for power.

Law 41: Avoid Stepping into a Great Man’s Shoes

What happens first always appears better and more original than what comes after.  If you succeed a great man or have a famous parent, you will have to accomplish double their achievements to outshine them.  Do not get lost in their shadow, or stuck in a past not of your own making:  Establish your own name and identity by changing course.  Slay the overbearing father, disparage his legacy, and gain power by shining in your own way.

Law 42: Strike the Shepherd and the Sheep will Scatter

Trouble can often be traced to a single strong individual – the stirrer, the arrogant underling, the poisoned of goodwill.  If you allow such people room to operate, others will succumb to their influence.  Do not wait for the troubles they cause to multiply, do not try to negotiate with them – they are irredeemable.  Neutralize their influence by isolating or banishing them.  Strike at the source of the trouble and the sheep will scatter.

Law 43: Work on the Hearts and Minds of Others

Coercion creates a reaction that will eventually work against you.  You must seduce others into wanting to move in your direction.  A person you have seduced becomes your loyal pawn.  And the way to seduce others is to operate on their individual psychologies and weaknesses.  Soften up the resistant by working on their emotions, playing on what they hold dear and what they fear.  Ignore the hearts and minds of others and they will grow to hate you.

Law 44: Disarm and Infuriate with the Mirror Effect

The mirror reflects reality, but it is also the perfect tool for deception: When you mirror your enemies, doing exactly as they do, they cannot figure out your strategy.  The Mirror Effect mocks and humiliates them, making them overreact.  By holding up a mirror to their psyches, you seduce them with the illusion that you share their values; by holding up a mirror to their actions, you teach them a lesson.  Few can resist the power of Mirror Effect.

Law 45: Preach the Need for Change, but Never Reform too much at Once

Everyone understands the need for change in the abstract, but on the day-to-day level people are creatures of habit.  Too much innovation is traumatic, and will lead to revolt.  If you are new to a position of power, or an outsider trying to build a power base, make a show of respecting the old way of doing things.  If change is necessary, make it feel like a gentle improvement on the past.

Law 46: Never appear too Perfect

Appearing better than others is always dangerous, but most dangerous of all is to appear to have no faults or weaknesses.  Envy creates silent enemies.  It is smart to occasionally display defects, and admit to harmless vices, in order to deflect envy and appear more human and approachable.  Only gods and the dead can seem perfect with impunity.

Law 47: Do not go Past the Mark you Aimed for; In Victory, Learn when to Stop

The moment of victory is often the moment of greatest peril.  In the heat of victory, arrogance and overconfidence can push you past the goal you had aimed for, and by going too far, you make more enemies than you defeat.  Do not allow success to go to your head.  There is no substitute for strategy and careful planning.  Set a goal, and when you reach it, stop.

Law 48: Assume Formlessness

By taking a shape, by having a visible plan, you open yourself to attack.  Instead of taking a form for your enemy to grasp, keep yourself adaptable and on the move.  Accept the fact that nothing is certain and no law is fixed.  The best way to protect yourself is to be as fluid and formless as water; never bet on stability or lasting order.  Everything changes.

 

On a concluding note from Niccolo Machiavelli in The Prince:

Any man who tries to he good all the time is bound to come to ruin among the great number who are not good. Hence a prince who wants to keep his authority must learn how not to be good, and use that knowledge, or refrain from using it, as necessity requires.

A highly recommended read in the areas of social philosophy, and political strategy. Additional recommendations for this genre would be The Art of War – Sun Tzu and The Prince by Machiavelli.