Clayton has written a lot of books around Innovation & Innovators, what fuels it, the problems around it, etc… Some of Clayton’s pretty bright classmates later in life got involved in Immoral & Illegal things even-tough they were doing very well for themselves in life. This prompted him to teach to his students how to not lose track in life & hence this book.
In summary these are the questions for which Clayton wants its readers to have a framework to workout the answers.
How Can I be sure that
- I will be successful and happy in my career?
- My realtionships with my spouse, my children, and my extended family and close friends become an enduring source of happiness?
- I live a life of integrity - and stay out of jail?
- How do you know the difference between good advice & bad? Afterall you are taking advice just because you are ignorant on the subject, the answer is to have a framework of thinking. Learn how to think & you can think about anything you want.
- “Disruption happens when a competitor enters a market with a low-priced product or service that most established industry players view as inferior. But the new competitor uses technology and its business model to continually improve its offering until it is good enough to satisfy what customers need.”
- In US, small mini-steel-mills disrupted the integrated ones by attacking the lowest end of the market. - The market is made by the unbranded & the unorganised. - Does this mean that the company at the bottom can’t be disrupted? Apple can be disrupted but not oppo?
- Rather than telling them what to think, or the solution itself, its always advisable to lead the listener to his own conclusions by giving alternate examples & questions. Be a guide, not a crystal bowl. Don’t answer directly, run the wuestion through a theory in my own mind. Good theory can help us categorize, explain, and, most important, predict. The hallmark of a good theory: it dispenses its advice in “if-then” statements.
- Terrorism disrupted the war mongering by countries. It’s a necessary evil, keeping the bigger one at bay.
- Co-relation is often evident but causality is not. That’s why research & theory. Use past data but don’t rely on it solely.
- If we can’t see beyond what’s close by, we’re relying on chance. Allow for positive black swans & minimise the negative ones.
- The only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking Don’t settle. As with all matters of the heart, you’ll know when you find it. -Steve Jobs
- Strategy defines: What you want to achieve & how you will get there. How we allocate our resources - our time, talent & energies - is how we determine the actual strategy of our lives. - Prioritize accordingly.
- Figuring the strategy & its execution is a continuous process not a one time endeavor.
- Incentives are lousy & generally lead to bad/complex unintended consequences. Motivation is higher & better than Incentives. True motivation is getting people to do something because they want to do it. This type of motivation continues, in good times and bad.
- It’s possible to both love & hate your job at the same time. You might love for the hygiene factors(incentives) but hate it because it doesn’t provide job-satisfaction(motivation). The opposite of job-dissatisfaction is absense-of-job-satisfaction.
- Learning, meaningful accomplishment & visible growth (more responsibility, staure, etc…) is what brings real happiness. Tangible aspects like salary, etc.. are a mirage. Meaningful, Development, Learning, Recognition, Achievement & Responsibility are the things we want.
- Taking advantage of unanticipated opportunities is often the difference between success & failure of companies & careers. Often the issue is the fight for resources between the deliberate strategy & new emerging opportunities. Often the focus on existing strategy is the distraction from new opportunities.
This is just 25% of the book. More to follow…
Find your intangible motivations & then deliberately keep untill you find yourself doing work that fulfills them. You’ll just know when you find it, just don’t fight it chasing external motivators. Sitting & just thinking is not enough, you have to act. Even when you find something you love, it can take years to get it right. Change can often be difficult but its necessary to do the right thing.
Strategise for discovery-driven planning. What has to prove true for this to work? Ask this question & plan around that, rather than planning with concrete assumptions in your mind. Attach probablities to your assumptions, it allows you to accept that you could be wrong. Start working with the most important assumptions that need to be proven right & determine how you will track them.
Think about what assumptions need to be proven right not just to be successful but also for you to be happy. Are the motivators internal or external?
It is just intent & won’t have any result until you devote resources (Time, Money & Energy) to acheive your goal. Why did Apple flounder without Steve Jobs & what did Jobs correct once back? Resource allocation!
Incentives have to match the higher strategy. Often companies want to promote a specific product but if salesman gets more incentive on promoting competitive products, its almost impossible to acheive higher strategy objectives. Align incentives with higher strategy. It becomes more difficult when the strategy for the long term makes no sense for the short term. Well-intended staff go off in the wrong direction when measures of success for employees are counter to those that will make the company successful.
High-acheivers allocate resources & focus a great deal on becoming the person they want to be at work - and far too little on the person they want to be at home. You have to force yourself to stay aligned with what matters most by setting hard stops, barriers and boundaries in life. You won’t get it right if you don’t commit to keep trying.
The time when it is most important to invest in building strong families & close friendships is when it appears, at the surface, as if it’s not necessary. It’s no point planting a sapling when you need shade. Similarly invest in new business/products when times are good.
93% of all companies that ultimately become successful had to abandon their original strategy. Most of those that fail, in contrast, spend all their money on their original strategy - which is usually wrong.
Good money from investors need to be patient for growth but impatient for profit, until you reach PMF. Don’t scale till you have PMF & unit economics in place.Once a profitable and viable way forward has ben discovered - success now depends on scaling out this model.
Need to watch the movie - It’s a Wonderful Life.
The most important time for the children to hear as many words as possible, the research suggests, is the first year of life. Talking in business language has limited effect on cognitive development. Engage with child in face-to-face conversation in what is called ‘language dancing’. Talk in ‘what if’, ‘do you remember’ and ‘wouldn’t it be nice if’ phrases with the kid. Language dancing is key for cognitive advantage - talk to kids as much as possible before age three.
In relationships we think about what we want rather but changing the perspective would deepen your relationships. Think what did the other person excepts from me (what did they hire you for?).
Similarly people hire products to do their jobs.
Right from Furntiture to milkshake to veggie-shakes to 12-min games, when people buy these products, they are hiring these for a particular job, fulfill a particular need. Understand this need, design your product & also have your product-positioning / marketing around this need/pain-point. The product should intuitively map in customers minds on a job that they are trying to do.
Why do most/traditional schools fail? They are not designed around what the students hire them for. Children have 2 fundamental jobs, feel-successful & to-have-friends. Unfortunately schools are structured to help most students feel like failures.
a. Is this the reason why ed-tech fails to catch hold in students minds? They do fulfill the need to be successful but what about making friends?
b. Can we redesign classes into companies/projects? Students don’t compete with each other but make friends as they all are working in different departments to make the company succeed. Various schools or sections can compete with each other.
Many unhappy marriages are often built upon selflessness. Partners giving each other things that they want to give but not what their spouse excepts. We project what we want and assume that it’s also what our spouse wants. We assume things.
The path to happiness in a relationship is not just about finding someone who you think is going to make you happy, but rather the path to happiness is about finding someone who you want to make happy, someone whose happiness is worth devoting yourself to. Happiness lies in sacrifice.
Read upto page-119 which is 50% of the book. More to follow..
Dell outsourced its computer manufacturing to ASUS bit by bit, starting from circuit boards to whole computers. So Dell actually not only taught it competitors how to make computers but also paid them for it. Never outsource the future!
A companies capabilities fall into three buckets: resources, processes and priorities.
The theory of capabilities gives companies the framework to determine when outsourcing makes sense, and when it doesn’t. Take a dynamic view of your suppliers’ capabilities & determine what capabilities you will need to succeed in the future. These critical capabilities should stay in-house.
What a student learns in a class becomes a resource for him. Only when he is able to use that knowledge(resource) to use it or create something out of it, does it become capability. So capability is a process, not a resource. Resources are what he uses to do it, processes are how does it, and priorities are why he does it.
When we so heavily focus on providing our children with resources, we need to ask ourselves a new set of questions: Has my child developed the skill to develop better skills? The knowledge to develop deeper knowledge? The experience to learn from new experiences?
Experiences in which they’re not deeply engaged and that don’t really challenge them to do hard things - denies our children the opportunity to develop the processes they’ll need to succeed in the future.
Self-esteem - the sense that “i’m not afraid to confron this problem and I think I can solve it” - doesn’t come from abundant resources Rather, self-esteem comes from achieving something important when it’s hard to do.
An alternative view to why the youth today could be unemployed could be because an entire generation has reached adulthood without the capabilities - particularly the processes - that translate into employment. Why? because everything was provided to them on the silver platter. By sheltring children from the problems that arise in life, we have inadvertently denied this generation the ability to develop the processes and priorities it needs to succeed.
Clayton - “ Some of the greatest gifts I received from my parents stemmed not from what they did for me - but rather from what they didn’t do for me. They helped me to learn that I should solve my own problems whenever possible; they gave me the confidence that I could solve my own problems.”
The feeling of “I did that.” is really very important to a kid. They need to be challenged. They need to solve hard problems. They need to develop values.
Try to outsource the learning of your kid to as little as possible. When they go out to learn Maths or Chemistry, they don’t just learn these subjects, to they also learn & imbibe the value systems & culture of these people. If your children gain their priorities and values from other people… whose children are they?
If you outsource more and more of your role as a parent, you will lose more and more of the precious opportunities to help your kids develop their values - which may be the most important capability of all.
We focus more towards giving the kids resources over processes. Always bias more towards process rather than resource.
Children will learn when they are ready to learn, not when we’re ready to teach them. So parents have to be available for the child as much as possible.
First, when children are ready to learn, we need to be there. And second, we need to be found displaying through our actions, the priorities and values that we want our children to learn.
If you want to become CEO of a company, ask this question to yourself: “ What are all the experiences and problems that I have to learn about and master so that what comes out at the other end is somebody who is ready and capable of becoming a successful CEO?” Now go find work that would give you these capabilities. Optimize for capabilities, not money or prestige.
If you are the team-leader/coach, don’t just always use your A-players, give juniors the training & chance to perform under pressure or one-day you will find that the seniors have become old or left & you have nobody to fill into their shoes.
When you aim to acheinve great things, it is inevitable that sometimes you’re not going to make it. Urge them to pick themselves up, dust themselves off, and try again. Tell them that if they’re not ocassionally failing, then they’re not aiming high enough. Also celebrate failure, if it’s a result of a child striving for an out-of-reach goal.
By bailing out & doing the projects for your kids, you are teaching to take shortcuts. You are giving them the wrong lesson: Good grades matter more than doing the work. Allow the child to see the consequences of neglecting an important assignment. If our children don’t face difficult challenges, and sometimes fail along the way, they will not build the resilience they will need throughout their lives.
The important thing for a parent is, as always to never give up; never stop trying to help your children get the right experiences to prepare them for life. By not letting them fail, we make them incapable fo succeeding, because their experiences have not prepared them for the challenges.
The gap between the family we want and the family we get is culture. Their priorities need to be set correctly so they will know how to evaluate their options and make a good choice. That’s what makes them independent. It works the same for both kids & companies.
Culture is a way of working together toward common goals that have been followed so frequently and so successfully that people don’t even think about trying to do things another way. If a culture has formed, people will autonomously do what they need to do to be successful.
Every time they tackle a problem, employees aren’t just solving the problem itself, in solving it, they are learning what matters. A culture is the unique combination of processes and priorities within an organisation.
Pixar’s employees have come to respect the honesty, which sometimes feel brutal, because everyone at Pixar agreees on the same goal: making high-quality, original films. That’s the priority. Is hierarchy important or solving the customers problems?
Disadvantage of a strong culture? As long as the company’s competitive and technological environments remain as they are today, the strength of its culture is a blessing. If the environment changes substantially, however, then the strength of the culture will make it hard to change things, too.
Culture in any organisation is formed through repetition. Once it has been shown to work, write it down and talk about it, as often as possible.
No vacation policy: take as much as you want, as long as you’re doing a great job and covering your responsibilities.
Outstanding employees only: doing an “adequate” job leads to your getting a “generous severance package.” so the company can hire an A-player in your place.
“Freedom and responsibility” vs command-and-control: good managers give their employees the right context in which to make decisions - and then the employees make the decisions.
Some cultures for your family to consider
Love & support each other
People, esp children should have fun in whatever they do. Make sure they know why they are doing something & always thank for it.
A home made & furnished by the members & children teaches them important life skills, along with a lot of attachement. “I painted that wall.” “I sanded it.” “I did it.”
A culture happens, whether you want it to or not. The only question is how hard you are going to try to influence it.
Praise children when they follow culture & call-out on them when they don’t. It’s not just about controlling bad behavior; it’s about celebrating the good. Don’t allow yourself or your family to become the kind-of-person you are to chance. You have deliberately shape it.
The professional pursuits & interests of your children need to emerge - and, in all probability, will be very different from another. The culture of your family ought to welcome such diversity. But I recommend that, for the foundational dimensions of your family culture, there be uniformity. Getting this right will prove to be a source of happiness and pride for each of you.
The safest road to Hell(Jail) is the gradual one - the gentle slope. The way you end up bankrupt or in Jail is by marginal thinking. I have written about in detail in this blog post along with my few doubts around it.
Netflix was founded in 1990s & it took 11years for it to reach a substantial size, It became a threat for ‘Blockbuster’ in 2002. It took 12 years for Netflix to reach that level being a under-dog. But by 2002 Blockbuster had already lost race & was bankrupt by 2010. It took 20 years since Netflix’s foundation. The path was so gradual that Blockbuster never realised its slipping into hell.
Everything starts with one small error & then one starts doing marginal small adjustments/errors. These small adjustments/degradations add up to something explosive. Remember the Volkswagen recalls of due to such a thinking. The company had to recall millions of vehicles worldwide and face 100s of millions of dollars in losses in recalls, fines, suits & brand value degradation. The marginal cost of “just this once” appears alluringly low.
On 20 November 2015, the EPA said Volkswagen officials told the agency that all 3.0-litre TDI diesel engines sold in the US from 2009 through 2015 were also fitted with emissions-cheating software, in the form of "alternate exhaust control devices". These are prohibited in the United States, however the software is legal in Europe. Volkswagen acknowledges these devices' existence, but maintains that they were not installed with a "forbidden purpose".
He also talks about how one small mistake by a broker - followed by many small mistakes led to undoing of a 233-year-old merchant bank. One person brought down a 200 year old organisation & also his own marriage because of thinking “Just this once.”
100% of the Time is easier than 90 percent of the time. Respect somebody who wants to keep their commitment. Don’t tell them, just this once. Because life is just one unending stream of extenuating circumstances. Decide what you stand for, And stand for it all the time.
The only way to avoid the consequences of uncomfortable moral concessions in your life is to never start making them in the first place. When the first step down that path presents itself, turn around and walk the other way.
In companies, when thinking of investing in a new potentially disruptive technology, we can see & calculate the immediate costs of investing, but it’s really hard to accurately see the costs of not investing.
If an organization has a clear and compelling purpose, its impact and legacy can be extraordinary. The business purpose & business mission are so rarely given adequate thought is perhaps the most important cause of business frustration & failure.
A useful purpose statement has 3 parts, likeness - the higher/general vision, commitment & metrics.
Be rigid on the kind of person you want to become, it needs to be deliberately conceived, chosen & managed. Be flexible in how you achieve it.
These is Christensen’s purpose statement. What he wanted to become as a person. - The likeness
A man who is dedicated to helping improve the lives of other people.
A kind, honest, forgiving, and selfless husband, father and friends.
A man who just doesn’t believe in God, but who believes God.
Don’t just draft such a purpose but commit to it & stay committed to it in every decision of your life.
Often finding the likeness would be fairly easy, finding the right metric to judge yourself on would be more difficult. It’s OK to think through it & let it come to it. As long as you are in the right direction, it will come to you.
The metric on which Christensen judges himself is that how many people has he been able to help in his life, one-by-one. How will you measure your life?
Books references to read:
- High Flyers