First Principles

PEOPLE

Perception is reality.

• Placebos work.
• Hawthorne effect.
• Halo effect.
• There need be no commodities.
• Reality is relative: we each have our own.

Mental expectations set real limits.

• Learned helplessness.
• "They are able because they think they are able." Virgil
• Optimism works better than pessimism.
• Logic = blinders to intuitive exploration.

Modern people have cro magnon brains.

• The human brain is the product of 10 million years of evolution, 99.8% of it in caves, on the savennah, hunting and gathering.
• Our relatively modern "thinking" brains are in perpetual contact and conflict with our ancient "feeling" brains.
• Pre-agricultural troglodytes lived entirely in the now. Our brains didn't need to plan very far ahead, so looking longterm is not in our natural repertoire.
• Our brains seek patterns, often finding one when it's not intentionally there. As we retell a dream, our brains invent the context to make sense of nonsense. We do this in waking life as well, but are not conscious of it.

People are warm-blooded, omnivorous, sight-mammals.

• We are creatures.
• Circadian rhythms control our thinking.
• If it full empty it; if it's empty, fill it; if it itches, scratch it.
• Fight or flight response is the root of stress in the office as well as the jungle.

People like what they know; they don't know what they like.

• In marketing, position services for maximum halo effect.
• First we make our habits, then our habits make us.
• Personal comfort zone = blinders, rut.
• Change threatens stability.

Be alert. Keep an open mind. Follow your heart.

• Mindfulness matters.
• Be here now.
• Walk in other people's shoes.
• Get out of your comfort zone.
• Learning is an active process.

To every thing there is a cycle.

• You're born, you live, you die.
• You live on through your children, your start-ups.
• Epigensis = born at the right time.

THINGS

Everything flows.

• Time flies.
• Nothing alive is ever finished.
• Worthwhile documents, policies, reports, and relationships live.

All things are connected.

• Connections often as important as the things they connect.
• Value of a network increases exponentially to the number of nodes.

Less is more.

• Simplicity is the ultimate sophistication
• When confronted with two explanations, choose the simplest.

Everything exists on numerous levels.

• Level of abstraction/detail. Meta-.
• No matter what's happening in the plaza, you can always go up to the balcony for a look at the bigger picture.
• Laterality, everything/idea has neighbors, related by concept, co-location, timing, etc.
• Everything is rooted in a life cycle. It's young or old, evolving or dying.

Process is power.

• Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime. --Chinese Proverb
• One person's process is another person's content.

Virtually everything is on a continuum. It's shades of gray rather than black or white.

• There is no absolute truth. There is no meaning without context.

Most things in life are beyond our control.

• Better to think things through than to thrash and force-fit.
• The mind and body are one.

In diversity is strength.

• Diversification decreases risk.
• All of us are smarter than one of us.

Shit happens.

• Entropy.
• Moorphy's Law (On Internet time, shit happens exponentially.)
• Chaos.

ECONOMICS

Decisions are a tradeoff of risk & reward.

• Leverage = How much risk or reward.
• R & R are not logical.
• ...rather, a mix of logic, emotion, biological drives, habit, associations, current state of mind, etc.
• Information is valuable only to the extent that it will change decisions.

Does it matter?

• What's in it for me?
• What business are we in?
• Principle of materiality.
• Don't fret over the inconsequential.
• Don't sweat the small stuff.
• The past is a sunk cost.

Invest time and resources wisely.

• Time is the scarce resource.
• Optimize mix of up-front preparation and auctual doing and folllow-up.
• Do not confuse thought with action.
• There is no such thing as a free lunch.
• Beware of armchair data.
• Diversify
• Leverage

When management treats time, space and no-matter as resources rather than as roadblocks, our methods of organization will no longer be lagging behind, at the end. --Future Perfect

TECHNIQUE

In business, take Jack Welch's advice...

• focus on customers
• resist bureaucracy
• think imaginatively
• invigorate others.

How to behave

• Live as if this is all there is.
• Look for the best in others. Other esteem.
• Share my thoughts and feelings. Be authentic.
• Open the door to feedback.
• Smile. Learn. Laugh. Pay attention.
• Practice optmism. Be here now.
• Live with intention.
• Think out of the box.
• Do what I love. Do it with gusto.
• Maintain balance.
• Don't obsess.

Seek patterns

• Homeostasis -- central tendency, self-correction, standard deviation.
• Pareto's law: 20% of the resources yield 80% of the results.
• Self-organization
• Organize by product or area or function

I don't ask him ”What's the problem?" I say, "Tell me the story." That way, I find out what the problem really is. --Avram Goldberg

Structure follows strategy. (Strategy = plans and policies by which a company aims to gain advantages over its competitors.)

Drivel, BS, and caution signs

Time problems.

• Anachronism. Fighting the last war.
• And so he continues to plan his future with the rules of the present in mind -- heedless of the possibility that the future will have rules of its own. Change is inherent in civilization." --Harry Brown
• Finding comfort in obsolete, vestigial rules and concepts. Accounting is BS.
• Short-term fix for long-term problem
• Too busy chopping down trees to sharpen his ax

Accepting the wrong answer to the right problem.

• Illogical expediency
• Group think
• The madness of crowds

Evaluating with what's easy to measure rather than what's appropriate.

• examples: $/hour, academic grades, IQ, multiple choice
• need to measure what counts
• Nasrudin story
• confusion of means & ends

Information is not instruction.

• Telling is not teaching.

Using my context to understand your situation.

• Jimmy Swaggart syndrome
• Jungian projections
• Cobbler's children
• Crazy psychiatrists

Confusing meaningless social noise with a message.

• "It's a communicating problem."
• "We don't have time."
• "How 'bout them Niners?"
• "Thanks a lot."

A word is not the thing itself.

The Principle of Materiality

As Alan Watts titled a book, "Does it matter?" Contrary to what you may think, accountants don't strive to account for every penny. They strive to present a fair picture of an organization's financial condition, not to balance its checkbook. If your employer is auditing your expenses, a $300 discrepancy on your hotel bill is probably significant; it's "material." If Deloitte is auditing Exxon, a $5 million discrepancy in expense reimbursements is trivial -- it's a drop in the bucket that won't even show up on Exxon's financial statements. I interpret the Principle of Materiality as "Don't sweat the small stuff." Don't fixate on false accuracy. And if you're unsure whether or not something's material, change its value up or down to see if it makes a meaningful difference. Impress your friends by saying you're performing a "sensitivity analysis." And, never confuse activity with results.

Words to Live By

Time is all we have. Barnaby Conrad

There is no free lunch.

Perception is reality.

Be here now.

Become who you are! Nietsche

Perform every act as if it is all that matters.

Give a man a fish, feed him for a day. Teach a man to fish, feed him for a lifetime. Chinese Proverb

Make no little plans. They have no magic to stir men's blood. Daniel H. Burnham

Imagination rules the world. Napoleon

Think like a man of action, act like a man of thought. Henri Bergson

One person's constant is another person's variable.

One person's process is another person's content. Jay

Expecting the world to treat you fairly because you are a good person is like expecting the bull not to charge you because you are a vegetarian. Harold Kushner

Never, Never, Never, Never give up. Winston Churchill

In my life I've experienced many terrible things, a few of which actually happened. Mark Twain

The word processor is mightier than the particle beam weapon. George Carlin

Life shrinks or expands in proportion to one's courage. The Talmud, also Anais Nin

None of us really understands what's going on with all these numbers. David Stockman

Don't compromise yourself. You're all you've got. Janis Joplin

If you think you can do a thing, or think you can't do a thing, you're right. Henry Ford

There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. - From the tomb of Machiavelli

The truth will set you free - but first it will piss you off.

An invasion of armies can be resisted but not an idea whose time has come. Victor Hugo

We look at the present through the rear-view mirror.

We march backwards into the future.Marshal McLuhan

Don't just learn the tricks of the trade. Learn the trade. James Bennis

In a time of drastic change it is the learners who inherit the future. The learned usually find themselves equipped to live in a world that no longer exists. Eric Hoffer

It is best to learn as we go, not go as we have learned. Leslie Jeanne Sahler

Edward De Bono on

Simplicity

1. Value simplicity highly.
2. Strive for it.
3. Understanding begets simplicity.
4. Explore alternatives and possibilities.
5. Challenge and discard vestiges.
6. Always be ready to start over.
7. Think conceptually.
8. Break things into pieces.
9. Trade off other values for simplicty.
10. Know who you're making it simple for.

Hubris

Early in life, I had to choose between honest arrogance and hypocritical humility. I chose honest arrogance and have seen no occasion to change. Frank Lloyd Wright

My father was a contemptible man. I owe my success to not following in his footsteps. He was lazy; I work very hard. He frittered away his talent, and I nurtured mine. He was poor as a church mouse, and I'm worth $550 million." John Sperling, founder and CEO of Apollo Group

Perspective

The real voyage of discovery, wrote Marcel Proust, "lies not in seeking new lands but in seeing with new eyes."

To get a different view, go up to the balcony. Look at the big picture. Look down from a higher level to gain a broader perspective. Try to discern what’s really going on. Back away from the trees to see the forest.

The Law of Raspberry Jam

Formulated by consultant Gerald Weinberg, the Law of Raspberry Jam states "The more you spread it, the thinner it gets." Few things scale forever.

Focus on core

Focus on core; outsource everything else. Shareholder value (AKA market cap) is a function of sustained competitive advantage, and organizations achieve it by leveraging their core competencies. Everything else is context (overhead), and context is a needless distraction. Without careful management, context always gets in the way of core because it absorbs time, talent and management attention.

Sunk cost

Don't throw good money after bad. Imagine you've sunk $100,000 into a project. Another $10,000 and it will be completed. But market conditions have changed and you'll only recoup $25,000. A colleague discovers an open-source code that will generate the same $25,000 return for an investment of only $8,000 total. Do you go for the first option and complete the $110,000 project? Or do you abandon the $100,000 and go for the cheaper new alternative? The rational businessperson chooses the second option. The $100,000 is a "sunk cost." It's water over the dam. You need to make decisions based on incremental costs and incremental rewards. Paying $8,000 to get $25,000 beats paying $10,000 to get $25,000 any time, anywhere.

Setting Personal Goals

• Examine attitudes twd money, power, success and time.
• Clarify values, needs, wants.
• Inventory desires in all parts of life.
• Create clear, focused images or mental pictures of what you want.
• Figure out an action plan -- the strategies and tactics necessary to achieve the goals. "Doubt your doubts and radiate optimism."

"I shall pass through this world but once; any good things, therefore, that I can do, or any kindness that I can show to any human being, or dumb animal, let me do it now. Let me not deter it or neglect it, for I shall not pass this way again." --John Galsworthy

From a review of In Pursuit of Happiness: "the invisible foot," says Milton Friedman. That's the law of unintended consequences.

Martin Seligman: Life is about happiness -- which people (when pressed) generally concur isn't a new BMW or an orgasm, but rather lasting and justified satisfaction with one's life as a whole. Happiness includes the self-respect that comes from accepting responsibility for one's life and earning one's way in the world. It flows from realizing your innate capacities by doing productive work and overcoming ever more challenging obstacles, impelled more by your own inner imperatives than by the mere need to make a living.

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From the Well: Conf: News On/Off the WELL Topic: 643 I should be telecommuting from Tahiti. Dawn on a beach of pure white sand and green sparkling seas....I catch the few fish I need for my daily fare and then walk naked down the beach to my grass hut with massive metal Linking up with the satellite, I quickly type in enough code to make my daily expenses. Length of my workday? Three minutes and thirty-seven seconds. I yawn as I turn off my battery-powered laptop and head for my hammock and a cool glass of fermented coconut milk.

Getting Things Done

Life in the Projects

Fast Company, May 1999, Tom Peters

Distinguished project work is the future of work—for the simple reason that more than 90% of white-collar jobs are in jeopardy today. They are in the process of being transformed beyond identification—or completely eliminated. “WOW” projects add value and leave a legacy (and make you a star.)

“Will we be bragging about this project five years from now? If the odds are low, what can we do right now to turn up the heat?” Draft people as if you’re an NBA general manager – get the hottest people you can. And pick projects like a venture capitalist: bet on cool people who have demonstrated their capacity to deliver cool projects.

Point of the exercise is not to do a good job; it’s to use every project opportunity that you can get your hands on to create surprising new ways of looking at old problems.

Never accept a project as given. That’s someone else’s way of conceptualizing the project!

1. everyone focuses on the tangibles but the intangibles (i.e. emotion) are what matters.
2. embrace the confusion: “when we launched this project, we thought we knew what we were doing. Now we know that we don’t know what we’re doing—but the things that we’re confused about are much more important.”
3. be your own firm within a firm.
4. think diversity.
5. project management is emotion management.

Reengineering

Reengineering by Mike Hammer (See HBR '89). Managing, or administering, businesses doesn't work today. What a retched work--administer. It conjures up the image of a bureaucrat.

The apotheosis of mid-20th-century administrator was Robert McNamara at Ford. McNamara didn't know anything about cars. He knew nothing about making cars, nothing about selling cars. He was a financial analyst. He had a deep, unspoken assumption that work didn't matter.

Reengineering means radically changing how we do our work. Work is the way in which we create value for customers, how we design, invent, and make products, how we sell them, how we serve customers. Reengineering means radically rethinking and redesigning those processes by which we create value and do work.

Titles: I would rip out VP/marketing and replace it with "process owner of finding and keeping customers."

In a reengineered company you have to leave behind this single-function mentality and wear more than one hat. You need to do whatever it takes to keep the customer coming back. Managers are not value-added. A customer never buys a product because of the caliber of management. Less is better. One of the goals is to minimize the necessary amount of management.

If you are designing a business for a world of stable growth, then you want the Adam Smith, Frederick Taylor, Henry Ford model. Trouble is, stable growth does not characterize our environment today.

"Folks, we're going on a journey. On this journey, we'll carry our wounded and shoot the dissenters."

A worker is someone who cares about a task, about getting things done, and is basically working for the wage at the time. We don't need workers in our company. We need professionals. A professional is someone who focuses on the result, on the customers rather than on tasks. Professionals need coaches and leaders.

De-engineering

London: What do you think about all the talk today about "re- engineering the organization." One word I've heard you use is not "re- engineering" but "de-engineering."

Wheatley: Yes, I put that word out to the world. We really have to "de-engineer" our thinking, which means that we have to examine how mechanistically we are oriented -- even in our treatment of one another. This is especially true in corporations. We believe that we can best manage people by making assumptions more fitting to machines than people. So we assume that, like good machines, we have no desire, no heart, no spirit, no compassion, no real intelligence -- because machines don't have any of that. The great dream of machines is that if you give them a set of instructions, they will follow it.

I see the history of management as an effort to perfect the instructions that you hope someone will follow this time -- even though they have never followed directions in their whole life.

How is the world going to be different because you and I are working together?

A Simpler Way

Author: Margaret Wheatley and Myron Kellner-Rogers in A Simpler Way

There is a simpler way to organize human endeavor. It requires a new way of being in the world. It requires being in the world without fear. Being in the world with play and creativity. Seeking after what's possible. Being willing to learn and be surprised.

This simpler way to organize human endeavor requires a belief that the world is inherently orderly. The world seeks organization. It does not need us humans to organize it.

This simpler way summons forth what is best about us. It asks us to understand human nature differently, more optimistically. It identifies us as creative. It acknowledges that we seek after meaning. It asks us to be less serious, yet more purposeful, about our work and our lives. It does not separate play from the nature of being.

The world of a simpler way is a world we already know. We may not have seen it clearly, but we have been living in it all our lives. It is a world that is more welcoming, more hospitable to our humanness. Who we are and what is best about us can more easily flourish.

The world of a simpler way has a natural and spontaneous tendency toward organization. It seeks order. Whatever chaos is present at the start, when elements combine, systems of organization appear. Life is attracted to order -- order gained through wandering explorations into new relationships and new possibilities.

OLD ways die hard. Amid all the evidence that our world is radically changing, we cling to what has worked in the past. We still think of organizations in mechanistic terms, as collections of replaceable parts capable of being reengineered. We act as if even people were machines, redesigning their jobs as we would prepare an engineering diagram, expecting them to perform to specifications with machinelike obedience. Over the years, our ideas of leadership have supported this metaphoric myth. We sought prediction and control, and also charged leaders with providing everything that was absent from the machine: vision, inspiration, intelligence, and courage. They alone had to provide the energy and direction to move their rusting vehicles of organization into the future.

Michael Crichton: In recent decades, many American companies have undergone a wrenching, painful restructuring to produce high-quality products. We all know what this requires: Flattening the corporate hierarchy. Moving critical information from the bottom up instead of the top down. Empowering workers. Changing the system, not just the focus of the corporation. And relentlessly driving toward a quality product. because improved quality demands a change in the corporate culture. A radical change.

Drucker

the first constant in the job of management is to make human strength effective and human weaknesses irrelevant. That's the purpose of any organization, the one thing an organization does that individuals can't do better.

Managers are accountable for results, period. They are not being paid to be philosophers; they are not even being paid for their knowledge. They are paid for results.

These are the factors stressed by GE in its new management process:

• focus on customers
• resist bureaucracy
• think imaginatively
• invigorate others

Dee Hock on Management and Organizations

Dee Hock on Management

An organization, no matter how well designed, is only as good as the people who live and work in it. Ultimately what determines the organization's performance is the approach to management its leaders take. Some of Dee Hock's management principles, in his own words:

PhD in Leadership, Short Course: Make a careful list of all things done to you that you abhorred. Don't do them to others, ever. Make another list of things done for you that you loved. Do them for others, always.

Associates: Hire and promote first on the basis of integrity; second, motivation; third, capacity; fourth, understanding; fifth, knowledge; and last and least, experience. Without integrity, motivation is dangerous; without motivation, capacity is impotent; without capacity, understanding is limited; without understanding, knowledge is meaningless; without knowledge, experience is blind. Experience is easy to provide and quickly put to good use by people with all the other qualities.

Employing Yourself: Never hire or promote in your own image. It is foolish to replicate your strength. It is idiotic to replicate your weakness. It is essential to employ, trust, and reward those whose perspective, ability, and judgment are radically different from yours. It is also rare, for it requires uncommon humility, tolerance, and wisdom.

Compensation: Money motivates neither the best people, nor the best in people. It can move the body and influence the mind, but it cannot touch the heart or move the spirit; that is reserved for belief, principle, and morality. As Napoleon observed, "No amount of money will induce someone to lay down their life, but they will gladly do so for a bit of yellow ribbon."

Form and Substance: Substance is enduring, form is ephemeral. Failure to distinguish clearly between the two is ruinous. Success follows those adept at preserving the substance of the past by clothing it in the forms of the future. Preserve substance; modify form; know the difference. The closest thing to a law of nature in business is that form has an affinity for expense, while substance has an affinity for income.

Creativity: The problem is never how to get new, innovative thoughts into your mind, but how to get old ones out. Every mind is a room packed with archaic furniture. You must get the old furniture of what you know, think, and believe out before anything new can get in. Make an empty space in any corner of your mind, and creativity will instantly fill it.

Leadership: Here is the very heart and soul of the matter. If you look to lead, invest at least 40% of your time managing yourself--your ethics, character, principles, purpose, motivation, and conduct. Invest at least 30% managing those with authority over you, and 15% managing your peers. Use the remainder to induce those you "work for" to understand and practice the theory. I use the terms "work for" advisedly, for if you don't understand that you should be working for your mislabeled "subordinates," you haven't understood anything. Lead yourself, lead your superiors, lead your peers, and free your people to do the same. All else is trivia.

Dee Hock on Organizations

Whenever Dee Hock talks to people about chaordic organizations, someone always wants to know, "Where's the plan? How do we implement it?" But that's the wrong question, he says, because an organization isn't a machine that can be built according to a blueprint.

"All organizations are merely conceptual embodiments of a very old, very basic idea--the idea of community. They can be no more or less than the sum of the beliefs of the people drawn to them; of their character, judgments, acts, and efforts," Hock says. "An organization's success has enormously more to do with clarity of a shared purpose, common principles and strength of belief in them than to assets, expertise, operating ability, or management competence, important as they may be."

The organization must be adaptable and responsive to changing conditions, while preserving overall cohesion and unity of purpose. This is the fundamental paradox facing businesses, governments, and societies alike, says Hock--not to mention living cells, brains, immune systems, ant colonies, and most of the rest of the natural world. Adaptability requires that the individual components of the system be in competition. And yet cohesion requires that those same individuals cooperate with each other, thereby giving up at least some of their freedom to compete.

Selling your ideas

Selling the value of a project to management takes more than talking like a businessperson. It requires thinking like a business person. In essence, if you’re not there already, you must become a business person. The overriding focus of business leaders is creating value for stakeholders. Stakeholders include owners, managers, workers, partners, and customers. The firm’s leaders are responsible for articulating a vision of how the organization will create value and specifying milestone objectives along the way there. Any businessperson worthy of the name can relate how his or her activities support those objectives and help fulfill the vision. You should be able to articulate how what you're doing establishes value in these areas. This is your "elevator pitch" and you should be able to giive it in your sleep. Analysis and Decision-making Techniques Here are techniques for business analysis and decision-making that we rely on continually. We suggest you run through them when making major decisions until they become second nature.

• Trade-off. Every business decision is a trade-off. (If there’s no trade-off, it’s a no-brainer.) We find it useful to list the pro’s of doing something and the con’s of not doing it or doing something else. Try to be aware of what you’re trading off when making a decision.
• Risk. Every decision is made with less than perfect information, and every decision entails taking a risk. The way to make sound decisions is to judge when you have enough information to move ahead and when the level of risk is acceptable. A decision-maker who takes no risk receives no reward. A decision-maker who disregards risk is a fool, a pauper, or both. Financial decisions trade off risk and reward. An important corollary: There is no free lunch.
• Empathy. To understand your customer, walk a mile in her shoes. Here’s how. Make up several representative customers (personas). Give them names, positions, likes, gripes, habits, intelligence and personalities. When you’re planning marketing campaigns and learning activities, stop every now and again to slip into these personas’ shoes. How does our proposal make them feel?
• The Pareto Principle, also known as the 80/20 rule, describes the common situation where 20% of the effort gets 80% of the results. It’s not uncommon for 20% of the sales force to make 80% of the sales. Or 20% of the customers to generate 80% of the profits. It’s likely that 20% of your effort produces 80% of your results. The point is that input and output are not balanced. As marketers, we break the market into pieces (“segments”) in order to identify and focus our attention on the significant few who produce most of the results. As designers of learning experiences, less is often more. Find the elusive 20% of the learner’s time that yields 80% of what is learned and put your energies there.
• The bottom line. Earnings. Profit. Revenue minus costs. Over time, profit and shareholder value are the same thing. The total value of the shares is equivalent to the stream of expected future profits, discounted for the cost of capital. Forgive us if you find this obvious, but you must be able to relate your decisions and choices to the profitability of your organization. Otherwise, you will not be able to make sound decisions as conditions change. Focus on core; outsource everything else. Shareholder value (AKA market cap) is a function of sustained competitive advantage, and organizations achieve it by leveraging their core competencies. Everything else is context (overhead), and context is a needless distraction. Without careful management, context always gets in the way of core because it absorbs time, talent and management attention.
• To get a different view, go up to the balcony. Look down from a higher level to gain a broader perspective. Try to discern what’s really going on. Back away from the trees to see the forest.

Business leaders present themselves to the world as confident, authoritative, conservative, results-oriented, deliberate, and a bit staid. It’s best to leave your clown suit in the closet when you’re selling a concept to executives. Be concise. Hit the concepts described above as they apply to your project. When you’ve said your piece, ask for questions and sit down.

"It is useless for the sheep to pass resolutions in favor of vegetarianism while the wolf remains of a different opinion." -W.R. Inge

"A democracy is a sheep and two wolves deciding on what to have for lunch. Freedom is a well armed sheep contesting the results of the decision." - Benjamin Franklin