I had written down these notes/excerpts in Aug 2012 while reading the book How Will You Measure Your Life by Clayton Christensen. He wrote the book around the time he was battling illness. While he’s known for books on innovation, in this book he shares business and life advice. I enjoyed the book.
Notes from the book
Things like compensation, job security, work conditions, company policy, etc. are hygiene factors, not motivators.
Incentive theory says you have to provide monetary benefits to retain talent. On the other hand, motivation theory suggests that you have to get people to do something because they want to do it. The proponent of motivation theory says that viewing job satisfaction as one big continuous spectrum is incorrect, in fact it’s possible to love your job and hate it at the same time. Therefore, the opposite of job dissatisfaction is not job satisfaction, rather an absence of job dissatisfaction. Things like compensation, job security, work conditions, company policy, etc. are hygiene factors, not motivators. Don’t prioritise hygiene factors above all else.
Understand that there’s a deliberate and emergent strategy, and don’t be too fixated on the deliberate strategy.
To understand a company’s strategy, look at what they actually do rather than what they say they will do.
Everything related to strategy inside a company is only intent until it gets to the resource allocation stage. “To understand a company’s strategy, look at what they actually do rather than what they say they will do.”
Capital that seeks growth before profit is bad capital. Be impatient for profit and patient for growth.
The path to happiness is about finding someone who you want to make happy; someone whose happiness is worth devoting yourself to.
Resources are what you use to do something, processes are how he does it and priorities are why he does it.
The factors that determine what a company can or cannot do – its capabilities – fall into one of three buckets: resources (people, equipment, brands, information, cash, relationships) , processes (ways in which products are made, employees coordinate and interact, resource allocation) and priorities (how a company makes decisions). A process is how you take a resource and create value out of it. Resources are what you use to do something, processes are how he does it and priorities are why he does it.
“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?” – Nolan Archibald
Culture is a way of working together toward common goals that have been followed so frequently and so successfully that people don’teven think about trying to do things another way. If a culture has been formed, people will automatically do what they need to do, to be successful. Culture is the result of shared learning – it’s a unique combination of processes and priorities within an organization.
Enron had a Vision and Values statement which was totally violated by its own upper management.
Life seldom comes with warning signs. Over time, small decisions can play out more dramatically. Basic finance says that ignore the fixed/sunk costs and instead base decision on marginal costs/revenues. But, this is a dangerous way of thinking as it biases companies to leverage what was put in place in the past, instead of guiding them to create the capabilities they’ll need in the future. Failure is often at the end of a path of marginal thinking, you end up paying full price anyway.
“If you need a machine and don’t buy it, then you’ll ultimately find that you have paid for it and don’t have it.”
Henry Ford
Everytime an executive in a company makes a decision, there are two alternatives – the full cost of making something new or leverage something that already exists, so that you only need to incur the marginal cost and revenue. Like Henry Ford said “If you need a machine and don’t buy it, then you’ll ultimately find that you have paid for it and don’t have it.”
“100% of the time is easier than 98% of the time.”
Three parts comprise a company’s purpose – likeness (what the managers want the company to become at the end of the path they’re on), committment to the likeness they’re trying to create, and metrics to calibrate employees’ work to keep them moving in a coherent way. Purpose must be deliberately conceived and chosen.