Jim's Book Review

The Impact Equation: Are You Making Things Happen or Just Making Noise? by Chris Brogan

noreply@blogger.com (Jim) — Wed, 02 Jan 2013 12:59:00 +0000

Second book I have read by the author, concentrating on general principles that can be applied regardless of the technology used.

This is a unique time. It’s a time when ideas can spread, maybe for the first time ever, based not on who created them and how important or rich that person is but instead on how good the idea is. A quote, a meme, or a strong emotion can pass through a network of people faster, effecting political change, creating art, or even making people feel closer than ever before. Ideas can help people change the world, and now anyone can become powerful enough to be a catalyst for what matters to them.Read more at location 120

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Refining your ideas is a key part of the equation. So is building a platform and working on the human aspect. At any time, if you are wondering what you should be doing with your work or how you should be improving it, our general answer is that only these three aspects of marketing matter in the world of media. They are everything and they will direct you toward what you should work on.Read more at location 319

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The reality is that this transformation in media is happening. It’s happening now, and it is a moment in time that will never repeat itself—not in the same way it’s happening now. If you are among the first to know how to leverage it, you can go places and have advantages you never could have imagined before.Read more at location 379

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It seems like there must be easier ways to build influence and create impact. Strike “easier” from your repertoire. Nothing worth doing is easy. Simple, sometimes. Easy? Never.Read more at location 423

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The problem, such as it is, is that everyone has a whatever account. Everyone is using social media. At the time of this writing, over eight hundred million people use Facebook. That’s more than one in eleven humans on the planet. So just being there isn’t enough. If you build it, they won’t come. Definitely not right away, but in this day and age, possibly never.Read more at location 458

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ACTION: GET YOUR GAME FACE ON Want to start thinking about leveling up and games? What most real-world systems are missing is any kind of meaningful scoring and feedback system (among other traits). For instance, most employees get an annual review. Do you really have to wait a year to know how you’re doing? A month is probably too long, right? Make your own metrics. We’ll talk about it throughout the book in different ways, but it’s important to realize this: Your path is your path, and that has nothing to do with your current “job.” It has everything to do with your goals. So get your game face on. 1. Pick a metric for everything you’re doing that matters. If you want to be a better marketer, make your metric the number of subscribers on your e-mail list (or whatever). If you want to be healthy, pick a metric like “consecutive days of thirty minutes or more of activity.” Simple. Pick simple metrics. Where everyone goes wrong in this is in looking for too many numbers. 2. Level up. If your goal is to earn a million dollars next year, break that into monthly revenue (around $84,000) and make your daily grind include something to move that number. Even if you get to 10 percent of that by year-end, you’re doing great. 3. Take a wild swing. This is variable. It might mean seeking an introduction to someone above your “pay grade.” It might mean applying for a job you’re not qualified for. Try something bigger than what should be next in a natural progression. There’s risk, but the rewards are big too. 4. Play new games. Once you’re feeling fairly comfortable with the game you’re playing, look for a new way to mix it up. A few years back, Julien took on MovNat and CrossFit and many other fitness challenges to see just what he was capable of accomplishing. As we’re writing this book, Chris is relaunching his music studies for a project with Jacqueline Carly about blending ancient Indian chanting music with modern digital effects and tools. The moment you get too eased into the game you’re playing is the moment you’ll miss the chance to level up.Read more at location 515

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We all have excuses. There are obstacles in everyone’s way. But if you’re going to make your ideas happen and learn about impact, you’re going to have to accept your excuses and flaws and obstacles and do it anyway. That’s that dividing line we talked about earlier. Actors don’t let excuses get in the way. And again, we don’t mean Hollywood actors. We mean participants. We mean you.Read more at location 576

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For instance, if you introduce two people from your community and they’re able to do business (without your asking for anything in the transaction), that kind of effort gets remembered. In Trust Agents, we called this being at the elbow of every deal.Read more at location 632

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As the environment for our ideas gets more competitive and cluttered, these are no longer trivial subjects. Our friend Alistair Croll once told us that an environment with excess information devours the one thing that information truly demands: attention. Attention is becoming scarce, so we have to use it wisely when we get it.Read more at location 730

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Differentiation, however, isn’t that simple. If your offering is too similar to the remainder of your category, you are of course invisible, leading you to compete increasingly on price, creating low margins and reducing the value of what you do. However, if you are too dissimilar, you become a radical, making you so vastly different from your competitors that you either offend or repel customers.Read more at location 864

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This is really about letting the audience decide what is good or bad and curating less. It is a shotgun approach, or as publishers are fond of saying, “Throw everything at the wall and see what sticks.” Some publishers have even started to act like this, and Lord knows some of the greatest companies of our time have too.Read more at location 1001

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You can think of Contrast in lots of ways. Look at what competitors say, along with others in your space. Avoid almost all of the words they use. You might use a few specific phrases so search engines find you more easily, but beyond that, don’t do it. If your competitors all say, “We value our customer,” don’t ever say that. If they say, “We are next-generation technology,” strike it from yourRead more at location 1055

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Realize that in life and business, it’s always what stands out that gets remembered. If everyone competes on price, but you are the only one raging about your incredible customer service, then that’s what we’ll remember.Read more at location 1067

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presentations and wrote blog posts and launched projects, the more we recognized that information has no impact on people’s reactions. Instead of information, people largely react to emotion, and they feel an emotion when they are presented with something different and surprising.Read more at location 1155

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1. Judge the value proposition(s) of the space you are playing in. Consider the blogs you compete against or the products that are above and below you in sales or price. What are they doing for their clients? What offerings define the space? 2. Pan out. Is your value information or emotion? Is it entertainment or education? Pan out to ten thousand feet and ask yourself whether you’re really in the lug-nut business. But don’t go so high up that you begin to see yourself as a “business solutions” company, unless you’re IBM or something. At which point you may not need this book. 3. Where must you compete, and what is critical in this space in order to maintain position? If you lost an entire arm of your products, would you go bankrupt? Whatever offers are critical to your space must stay or, at the very minimum, must be identified. 4. What can be diminished? You panned out; now do the opposite. Focus on each value. What really matters to the audience you are targeting? Do they really care about a given product, or is it a vestigial part of your business? Has your business moved beyond it? What if it were forced to? What’s the worst that could happen? Consider this with each product you offer. 5. What can be eliminated? It’s time to make hard decisions. The values you serve up are not equal to all of your customers, and for some they don’t even matter. Is a circus without animals still a circus? Cirque du Soleil (and others) think so. In fact, they remove animals and more people want to attend. They can drive ticket prices up by closing in on what really matters to their clients. Of course, none of this can happen unless you are serious about Contrast. Anyone can differentiate themselves through any offering they have or anything they refuse to offer that their competitors do without thinking. In other words, what you are creating and what you are competing on is really up to you. You decide what business you’re in, how you’re going to make a living, and where your profits will come from. It’s a strange thought, but it’s true. You decide, and you can change anytime you want.Read more at location 1241

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One of our favorite Web sites, http://two.sentenc.es/, focuses on this concept by asking senders of all e-mail to restrict themselves to text message–like lengths. When concepts don’t fit into this structure, they can be addressed in a phone conversation, a blog post, or some other form of media. But the larger point is that format should be dictated by need, and restrictions can actually help you become better with your message.Read more at location 1359

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Was your subject line obvious and actionable? Could the recipient answer based almost entirely on it? Did you put the most important part of the e-mail in the first paragraph? Did you end the e-mail with the one question that was most important? Was there one “ask” in that e-mail or more than one? Was the e-mail HTML formatted and sent via a “donotreply@” e-mail address? (That is, was it a newsletter?) Had you messaged the recipient recently (within a few months) without making an ask? Was the e-mail fewer than three hundred words? Could the recipient read it in under thirty seconds?Read more at location 1515

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If you can’t simplify words, lines, and syntax and make your writing clearer for people to respond to, you are doomed.Read more at location 1544

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There are people who are really good at painting portraits or quirky street art, but there’s a reason people talk about being a “starving artist.” Art either sells remarkably well or it doesn’t. And you don’t have time to sell posthumously.Read more at location 1596

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Chuck Frey’s Web site (http://www.innovationtools.com/), as he’s the leading authority on all things mind mapping and our go-to person for learning what’s new and interesting in that world.Read more at location 1654

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In every case where you seek to get a point across, brevity is a core selling point. It will get you much further than trying to paint with words.Read more at location 1754

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Oh, and if you haven’t read The Alchemist, pick it up. It may change your life.Read more at location 1926

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Reaching people does nothing unless you provide them with enough value to make them stop what they’re doing, either now or later, and participate in your media. So a blog post must be well written enough or compel with its story enough that it will cause the reader to think a. this is an interesting new voice; b. I’ve been thinking this forever; finally someone is saying it; or c. I’ve never thought about this before! The most significant absence from this list is the reader’s reaction to an attempt to convert him into a customer, get him to pay for information, or extract value from him in some other way. You are not at this stage yet—whatRead more at location 1976

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(Before you discount the idea that there are bloggers already talking about your space, swing by alltop.com and see if you can find people writing about your industry.)Read more at location 2042

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In almost every case, the purpose of our outreach to someone influential has been first and foremost to help them. The side benefit is the social proof that clearly we have something of value to offer, because we are afforded time by people of standing.Read more at location 2060

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But again, let us stress: It’s important that you connect with people to serve them first. This delivers the best value and impact for everyone involved. Coming to someone with your hand out for help is always far less attractive than creating something of value for the person you’re hoping to connect with.Read more at location 2062

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Here’s how to tell if your content is hype, or if it really matters. This distinction is vitally important, especially if you are trying to build a lasting audience. Are you connecting with people over the long term, or are you distracting them in an attempt to give yourself a chance? Figuring this out is key. So here’s a quick checklist. Your material is something someone would be delighted to come across. You, your department, your company, or your clients look forward to what you send them. Your content is like a television show (not an advertisement).Read more at location 2209

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posts. Commenting and replying, it turns out, are much more valuable than posting your own original content, as far as engagement and response metrics indicate. On social networks, posting less frequently reduces the rate at which new people follow you, but it doesn’t often translate to a drop-off in subscribers.Read more at location 2266

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1. If you blog daily, your number of subscribers will go up (almost without fail, but with some kind of cutoff at the higher numbers if your posts are crap). 2. If you blog twice or more daily, your number of subscribers will go up even more. 3. If you blog weekly, you won’t necessarily lose subscribers. 4. If you blog monthly, you might lose subscribers, or you might not. 5. Sunday is a kind of magical day for releasing a blog post, because it appears that people take a break at some point during that day to catch up on nonhome matters, and they comment just a bit longer, visit just a bit longer, and more. Why? No idea. But every time we post on Sunday, the results are pretty good. 6. There’s no magical time of day to post a blog. Chris likes to post by 4:30 a.m. Eastern time, but he has some readers in India and the UK, in addition to those in the United States. It’s always at a weird time somewhere in the system. That said, posting around anyone’s 5:00 p.m. on a Friday isn’t a good idea.Read more at location 2285

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Jeremiah Owyang did this a long time ago while working for Hitachi Data Systems. He created a very useful wiki site for all the various large storage companies, who were promoting competing products, along with his own products. People knew that Jeremiah represented Hitachi, but they found his site so useful that they considered his products alongside the other companies’ products and sometimes bought his, simply because they appreciated all his hard work in covering the space.Read more at location 2339

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Simplify e-mails to a single call to action, and lead with a sentence that explains the most important point you’re trying to make. People read the first line or two of your e-mail and decide whether or not to reply. You have about twenty-five words to hook someone into taking action. Choose wisely.Read more at location 2423

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You might look at this example and say, “So what? Anyone can do that.” Here’s the hint: Anyone can do that. Rachel is getting buyers because she does do it.Read more at location 2600

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“3 Tiny Habits.” We came across B. J. Fogg’s method of habit creation only recently, but his theory is that creating effective habits is itself a habit, and that you can get good at it. To get the full benefit, check out TinyHabits.com, but to start out, find the smallest possible behavior change you can, such as “write one word,” and do it immediately after something you already do (such as finishing dinner).Read more at location 2888

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1. Distill your message. Whittle it down to the tightest, sharpest thing possible. And we don’t mean something like “Google Panda is making it harder for small Web sites to get and keep high search-engine rankings.” If this is what you’re delivering, and it’s relevant to your audience, that’s fine—but deliver a punchier message as well. Use your tone, your words, and everything else to deliver a message that means more to your audience. For example, the message above might become “Big guys are making it hard for little guys to compete.” Then your message is more like an eighties movie and less like a horrible PowerPoint presentation. Think ten thousand feet. Think big. Big is emotional, and Google SERPs are not. 2. Discover the core emotion behind the message. For example, for years we used “Don’t be afraid to try new things” as the overarching message of our social-media presentations. Once you have your larger, blurrier, ten-thousand-foot message, you can think about how a message like this is supposed to make people feel. Since there are only a few core emotions, you can basicallyRead more at location 3135

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take your pick, either here or from Wikipedia: hope, gratitude, joy, pride, etc. But remember that a message that doesn’t connect with the right emotion can create a kind of emotional dissonance that leaves people feeling not quite right, perhaps even manipulated. 3. Deliver this feeling over and over again from multiple angles. Begin with real subtlety. Create wonder as you talk about how others have dealt with problem X or how great, unexpected successes occurred when person Y was in trouble and did thing Z. Act as if you were telling one of the great stories of mankind through your simple blog post, presentation, or video. Think about building one thing on top of another, not throwing it all out at once. 4. Combine number 3 with detailed examples of how it happened. Don’t make the mistake of providing only motivational speaker–type inspirational talk and expect it to consistently work. Your audience needs to feel like there’s some grounding in what you’re saying. Go from high to low, from general to very specific, and then up and down again. Using examples provides a strong foundation for your subject, and it will help people come along for the ride. 5. Practice … a lot. A ton of work is necessary to get seriously good at inspiring any audience, whether online or in person. This is because you need to both anticipate and feel out your audience’s emotional state, an ability that comes only with significant experience. So attempting to inspire weekly, if not daily, in different ways will help you understand what works and what doesn’t. There is no substitute.Read more at location 3144

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If you want one of our best and most secret magic tricks, it’s this: Reply. That’s it. We know it doesn’t look like much, but it’s magic. Julien is better at this in e-mail than Chris is. Chris does rather well in responding to people via his blog and social networks like Twitter. But both of us value replying to people, and it’s abundantly clear that when someone receives a reply, they are almost always amazed, for lack of a better term.Read more at location 3194

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answer, but when they get one, they love you. People know that e-mails and tweets take time. They are small sacrifices that imply you took a moment out of your day. They are the opposite of auto-responders that say, “Sorry, I get lots of e-mail.” Instead, a reply, even a short one says, “Yes, I am busy, but I actually give a damn.” This is important.Read more at location 3216

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Chris talks about the fact that we all keep our phones really close to our heads when we go to bed, as if we might get a very important call in the middle of the night. It’s as if we were surgeons or superheroes, which clearly we are not. This often raises a nervous and resonating giggle. He then strokes his phone as if he’s Gollum from The Lord of the Rings and says, “My preciousssssss,” as people bark out laughter, because they know the feeling.Read more at location 3271

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Do I make people feel comfortable? Can I look people in the eyes? Do I talk about myself or about others? Am I relatable? Do I let myself be vulnerable around others? Do I seem relaxed or tense? These are the measures by which you might judge your success in the land of Echo.Read more at location 3355

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Summary: Brand-Leadership - David Aaker and Erich Joachimsthaler

noreply@blogger.com (Jim) — Sat, 15 Dec 2012 12:46:00 +0000

Key management summary of Brand Leadership text

Avoid viewing the brand too narrowly. Instead, have a broad and rich brand identity which is aspirational.Read more at location 102

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As far as possible, always link the brand to one specific functional benefit which is compelling and expressive. Everything else should then be linked to that benefit by association.Read more at location 103

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Ignore the temptation to use too many dimensions in defining a brand. Instead, focus on just one or two key dimensions that fit and help the building of the brand identity. Ignore everything else.Read more at location 105

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Understand how competitors have positioned their brands and create a differentiated identity which takes into account whatever those competitors are doing. Understand their approach and do something different.Read more at location 109

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Wherever possible, have a single brand identity which applies across the entire range of products and in every geographic marketplace. Often, this involves having a single brand identity but emphasizing different elements in different markets.Read more at location 110

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Project the brand identity. Don’t let it become ambiguous. Be definitive in stating precisely what the brand stands for. Do this well and the brand identity will influence every decision the organization makes in the future.Read more at location 114

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Role models capture the emotion of a brand and say something about its vision. Internal role models can personalize the brand and build a heritage within the organization of actions which make up the company culture.Read more at location 117

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Visual metaphors which are aligned with the brand identity are powerful emotive devices. They can add depth and color to the way the brand is viewed. Strong visual metaphors are memorable and provide strategic direction for the brand identity.Read more at location 120

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Many brands are complex with a number of attributes, dimensions, associations and more. A good brand identity will set priorities, deciding which single attribute is most important in representing what the brand stands for. The brand identity will also help determine which legacy attributes should be maintained and which should be updated.Read more at location 122

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“In order to be communicated effectively, a brand identity needs to be punchy, memorable, focused and motivating.”Read more at location 133

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Create visibility. Brand visibility is a mix of three factors: Recognition – “Have you heard of this brand?” Awareness – “What brands do you know?” Top-of-mind status – “What do you think of?” Generally, brand builders strive for a mix of all three factors when attempting to create high visibility.Read more at location 204

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Understand customers and frame the brand in such a way it addresses factors which are central to their lives. This is the concept of “hitting them where they live”.Read more at location 215

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Rise above the clutter by having one single driving idea which resonates deeply with customers.Read more at location 216

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Reach target customers as intimately as possible. To do that, you’ll need to segment the broader market very tightly. Brand building always falters when segmentation becomes fuzzy. Delight, surprise and, if necessary, shock the customerRead more at location 219

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A good brand building organization will operate globally within a culture and organizational structure which nurtures and build the brand. That generally requires four elements: A brand champion who will oversee the long-term progress of the brand – avoiding ad-hoc decisions. An international communication system – allowing sharing of insights, ideas and best practices. A common global brand planning process. The ability to execute effective brand-building programs.Read more at location 277

The Power of Habit by Charles Duhigg

noreply@blogger.com (Jim) — Tue, 11 Dec 2012 12:39:00 +0000

Fascinating insights into how habit loops get triggered and how to adjust them, you can't break them just shift the harmful action to something else.

“All our life, so far as it has definite form, is but a mass of habits,” William James wrote in 1892.Read more at location 149

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Squire’s studies would show that even someone who can’t remember his own age or almost anything else can develop habits that seem inconceivably complex—until you realize that everyone relies on similar neurological processes every day.Read more at location 290

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One of Squire’s assistants visited the house one day and asked Eugene to draw a map of the block where he lived. He couldn’t do it. How about where his house was located on the street, she asked. He doodled a bit, then forgot the assignment. She asked him to point out which doorway led to the kitchen. Eugene looked around the room. He didn’t know, he said. She asked Eugene what he would do if he were hungry. He stood up, walked into the kitchen, opened a cabinet, and took down a jar of nuts.Read more at location 386

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This process within our brains is a three-step loop. First, there is a cue, a trigger that tells your brain to go into automatic mode and which habit to use. Then there is the routine, which can be physical or mental or emotional. Finally, there is a reward, which helps your brain figure out if this particular loop is worth remembering for the future:Read more at location 490

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Over time, this loop—cue, routine, reward; cue, routine, reward—becomes more and more automatic. The cue and reward become intertwined until a powerful sense of anticipation and craving emerges.Read more at location 495

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Habits never really disappear. They’re encoded into the structures of our brain, and that’s a huge advantage for us, because it would be awful if we had to relearn how to drive after every vacation. The problem is that your brain can’t tell the difference between bad and good habits, and so if you have a bad one, it’s always lurking there, waiting for the right cues and rewards.”Read more at location 508

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Researchers have learned that cues can be almost anything, from a visual trigger such as a candy bar or a television commercial to a certain place, a time of day, an emotion, a sequence of thoughts, or the company of particular people. Routines can be incredibly complex or fantastically simple (some habits, such as those related to emotions, are measured in milliseconds). Rewards can range from food or drugs that cause physical sensations, to emotional payoffs, such as the feelings of pride that accompany praise or self-congratulation.Read more at location 599

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In one set of experiments, for example, researchers affiliated with the National Institute on Alcohol Abuse and Alcoholism trained mice to press levers in response to certain cues until the behavior became a habit. The mice were always rewarded with food. Then, the scientists poisoned the food so that it made the animals violently ill, or electrified the floor, so that when the mice walked toward their reward they received a shock. The mice knew the food and cage were dangerous—when they were offered the poisoned pellets in a bowl or saw the electrified floor panels, they stayed away. When they saw their old cues, however, they unthinkingly pressed the lever and ate the food, or they walked across the floor, even as they vomited or jumped from the electricity.Read more at location 607

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Hopkins had helped establish toothbrushing as a daily activity. The secret to his success, Hopkins would later boast, was that he had found a certain kind of cue and reward that fueled a particular habit. It’s an alchemy so powerful that even today the basic principles are still used video game designers, food companies, hospitals, and millions of salesmen around the world. Eugene Pauly taught us about the habit loop, but it was Claude Hopkins that showed how new habits can be cultivated and grown. So what, exactly, did Hopkins do? He created a craving. And that craving, it turns out, is what makes cues and rewards work. That craving is what powers the habit loop.Read more at location 726

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shelves. The key, he said, was that he had “learned the right human psychology.” That psychology was grounded in two basic rules: First, find a simple and obvious cue. Second, clearly define the rewards. If you get those elements right, Hopkins promised, it was like magic. Look at Pepsodent: He had identified a cue—tooth film—and a reward—beautiful teeth—that had persuaded millions to start a daily ritual.Read more at location 774

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Studies of people who have successfully started new exercise routines, for instance, show they are more likely to stick with a workout plan if they choose a specific cue, such as running as soon as they get home from work, and a clear reward, such as a beer or an evening of guilt-free television.13 Research on dieting says creating new food habits requires a predetermined cue—such as planning menus in advance—and simple rewards for dieters when they stick to their intentions.14Read more at location 781

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Schultz watched a new pattern emerge: craving. When Julio anticipated juice but didn’t receive it, a neurological pattern associated with desire and frustration erupted inside his skull. When Julio saw the cue, he started anticipating a juice-fueled joy. But if the juice didn’t arrive, that joy became a craving that, if unsatisfied, drove Julio to anger or depression.Read more at location 970

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For those monkeys who hadn’t developed a strong habit, the distractions worked. They slid out of their chairs, left the room, and never looked back. They hadn’t learned to crave the juice. However, once a monkey had developed a habit—once its brain anticipated the reward—the distractions held no allure. The animal would sit there, watching the monitor and pressing the lever, over and over again, regardless of the offer of food or the opportunity to go outside. The anticipation and sense of craving was so overwhelming that the monkeys stayed glued to their screens, the same way a gambler will play slots long after he’s lost his winnings.Read more at location 976

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“There is nothing programmed into our brains that makes us see a box of doughnuts and automatically want a sugary treat,” Schultz told me. “But once our brain learns that a doughnut box contains yummy sugar and other carbohydrates, it will start anticipating the sugar high. Our brains will push us toward the box. Then, if we don’t eat the doughnut, we’ll feel disappointed.”Read more at location 991

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To understand this process, consider how Julio’s habit emerged. First, he saw a shape on the screen: Over time, Julio learned that the appearance of the shape meant it was time to execute a routine. So he touched the lever: As a result, Julio received a drop of blackberry juice. That’s basic learning. The habit only emerges once Julio begins craving the juice when he sees the cue. Once that craving exists, Julio will act automatically. He’ll follow the habit:Read more at location 995

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Because Hopkins’s success was driven by the same factors that caused Julio the monkey to touch the lever and housewives to spray Febreze on freshly made beds. Pepsodent created a craving.Read more at location 1132

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“Consumers need some kind of signal that a product is working,” Tracy Sinclair, who was a brand manager for Oral-B and Crest Kids Toothpaste, told me. “We can make toothpaste taste like anything—blueberries, green tea—and as long as it has a cool tingle, people feel like their mouth isRead more at location 1149

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clean. The tingling doesn’t make the toothpaste work any better. It just convinces people it’s doing the job.”Read more at location 1152

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Want to craft a new eating habit? When researchers affiliated with the National Weight Control Registry—a project involving more than six thousand people who have lost more than thirty pounds—looked at the habits of successful dieters, they found that 78 percent of them ate breakfast every morning, a meal cued by a time of day.32 But most of the successful dieters also envisioned a specific reward for sticking with their diet—a bikini they wanted to wear or the sense of pride they felt when they stepped on the scale each day—something they chose carefully and really wanted. They focused on the craving for that reward when temptations arose, cultivated the craving into a mild obsession. And their cravings for that reward, researchers found, crowded out the temptation to drop the diet. The craving drove the habit loop.33Read more at location 1157

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“Champions don’t do extraordinary things,” Dungy would explain. “They do ordinary things, but they do them without thinking, too fast for the other team to react. They follow the habits they’ve learned.”Read more at location 1210

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His coaching strategy embodied an axiom, a Golden Rule of habit change that study after study has shown is among the most powerful tools for creating change. Dungy recognized that you can never truly extinguish bad habits. Rather, to change a habit, you must keep the old cue, and deliver the old reward, but insert a new routine. That’s the rule: If you use the same cue, and provide the same reward, you can shift the routine and change the habit. Almost any behavior can be transformed if the cue and reward stay the same.Read more at location 1220

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Asking patients to describe what triggers their habitual behavior is called awareness training, and like AA’s insistence on forcing alcoholics to recognize their cues, it’s the first step in habit reversal training. The tension that Mandy felt in her nails cued her nail biting habit.Read more at location 1434

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It wasn’t God that mattered, the researchers figured out. It was belief itself that made a difference. Once people learned how to believe in something, that skill started spilling over to other parts of their lives, until they started believing they could change. Belief was the ingredient that made a reworked habit loop into a permanent behavior.Read more at location 1601

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For most people who overhaul their lives, there are no seminal moments or life-altering disasters. There are simply communities—sometimes of just one other person—who make change believable.Read more at location 1678

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But we do know that for habits to permanently change, people must believe that change is feasible. The same process that makes AA so effective—the power of a group to teach individuals how to believe—happens whenever people come together to help one another change. Belief is easier when it occurs within a community.Read more at location 1687

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How do habits change? There is, unfortunately, no specific set of steps guaranteed to work for every person. We know that a habit cannot be eradicated—it must, instead, be replaced. And we know that habits are most malleable when the Golden Rule of habit change is applied: If we keep the same cue and the same reward, a new routine can be inserted. But that’s not enough. For a habit to stay changed, people must believe change is possible. And most often, that belief only emerges with the help of a group.Read more at location 1736

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The evidence is clear: If you want to change a habit, you must find an alternative routine, and your odds of success go up dramatically when you commit to changing as part of a group. Belief is essential, and it grows out of a communal experience, even if that community is only as large as two people.Read more at location 1747

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“Every time I looked at a different part of the government, I found these habits that seemed to explain why things were either succeeding or failing,” O’Neill told me. “The best agencies understood the importance of routines. The worst agencies were headed by people who never thought about it, and then wondered why no one followed their orders.”Read more at location 1909

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Studies have documented that families who habitually eat dinner together seem to raise children with better homework skills, higher grades, greater emotional control, and more confidence.11 Making your bed every morning is correlated with better productivity, a greater sense of well-being, and stronger skills at sticking with a budget.12 It’s not that a family meal or a tidy bed causes better grades or less frivolous spending. But somehow those initial shifts start chain reactions that help other good habits take hold.Read more at location 1992

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Poor teacher training, the officials working with O’Neill finally figured out, was a root cause of high infant mortality. If you asked doctors or public health officials for a plan to fight infant deaths, none of them would have suggested changing how teachers are trained. They wouldn’t have known there was a link. However, by teaching college students about biology, you made it possible for them to eventually pass on that knowledge to teenagers, who started eating healthier, and years later give birth to stronger babies. Today, the U.S. infant mortality rate is 68 percent lower than when O’Neill started the job.Read more at location 2173

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Then, in 2009 a group of researchers funded by the National Institutes of Health published a study of a different approach to weight loss.24 They had assembled a group of sixteen hundred obese people and asked them to concentrate on writing down everything they ate at least one day per week. It was hard at first. The subjects forgot to carry their food journals, or would snack and not note it. Slowly, however, people started recording their meals once a week—and sometimes, more often. Many participants started keeping a daily food log. Eventually, it became a habit. Then, something unexpected happened. The participants started looking at their entries and finding patterns they didn’t know existed.Read more at location 2192

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And at Alcoa, O’Neill’s legacy lives on. Even in his absence, the injury rate has continued to decline. In 2010, 82 percent of Alcoa locations didn’t lose one employee day due to injury, close to an all-time high. On average, workers are more likely to get injured at a software company, animating cartoons for movie studios, or doing taxes as an accountant than handling molten aluminum at Alcoa.Read more at location 2289

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Students who exerted high levels of willpower were more likely to earn higher grades in their classes and gain admission into more selective schools. They had fewer absences and spent less time watching television and more hours on homework. “Highly self-disciplined adolescents outperformed their more impulsive peers on every academic-performance variable,” the researchers wrote. “Self-discipline predicted academic performance more robustly than did IQ. Self-discipline also predicted which students would improve their grades over the course of the school year, whereas IQ did not.… Self-discipline has a bigger effect on academic performance than does intellectual talent.”Read more at location 2371

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“If you want to do something that requires willpower—like going for a run after work—you have to conserve your willpower muscle during the day,” Muraven told me. “If you use it up too early on tedious tasks like writing emails or filling out complicated and boring expense forms, all the strength will be gone by the time you get home.”Read more at location 2473

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At KIPP, or the “Knowledge Is Power Program”—a collection of charter schools serving low-income students across the nation—teaching self-control is part of the schools’ philosophy. (A KIPP school in Philadelphia gave students shirts proclaiming “Don’t Eat the Marshmallow.”) Many of these schools have dramatically raised students’ test scores.12Read more at location 2510

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Put another way, the patients’ plans were built around inflection points when they knew their pain—and thus the temptation to quit—would be strongest. The patients were telling themselves how they were going to make it over the hump.Read more at location 2576

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When Muraven started exploring why students who had been treated kindly had more willpower he found that the key difference was the sense of control they had over their experience. “We’ve found this again and again,” Muraven told me. “When people are asked to do something that takes self-control, if they think they are doing it for personal reasons—if they feel like it’s a choice or something they enjoy because it helps someone else—it’s much less taxing. If they feel like they have no autonomy, if they’re just following orders, their willpower muscles get tired much faster. In both cases, people ignored the cookies. But when the students were treated like cogs, rather than people, it took a lot more willpower.”Read more at location 2703

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Or, put in language that people use outside of theoretical economics, it may seem like most organizations make rational choices based on deliberate decision making, but that’s not really how companies operate at all. Instead, firms are guided by long-held organizational habits, patterns that often emerge from thousands of employees’ independent decisions.16 And these habits have more profound impacts than anyone previously understood.Read more at location 2881

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Most economists are accustomed to treating companies as idyllic places where everyone is devoted to a common goal: making as much money as possible. Nelson and Winter pointed out that, in the real world, that’s not how things work at all. Companies aren’t big happy families where everyone plays together nicely. Rather, most workplaces are made up of fiefdoms where executives compete for power and credit, often in hidden skirmishes that make their own performances appear superior and their rivals’ seem worse.Read more at location 2906

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Now, imagine what you would tell a new colleague who asked for advice about how to succeed at your firm. Your recommendations probably wouldn’t contain anything you’d find in the company’s handbook. Instead, the tips you would pass along—who is trustworthy; which secretaries have more clout than their bosses; how to manipulate the bureaucracy to get something done—are the habits you rely on every day to survive. If you could somehow diagram all your work habits—and the informal power structures, relationships, alliances, and conflicts they represent—and then overlay your diagram with diagrams prepared by your colleagues, it would create a map of your firm’s secret hierarchy, a guide to who knows how to make things happen and who never seems to get ahead of the ball.Read more at location 2940

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Then, one afternoon, a few of Pole’s colleagues from the marketing department stopped by his desk. They were trying to figure out which of Target’s customers were pregnant based on their buying patterns, they said. Pregnant women and new parents, after all, are the holy grail of retail. There is almost no more profitable, product-hungry, price-insensitive group in existence. It’s not just diapers and wipes. People with infants are so tired that they’ll buy everything they need—juice and toilet paper, socks and magazines—wherever they purchase their bottles and formula. What’s more, if a new parent starts shopping at Target, they’ll keep coming back for years. Figuring out who was pregnant, in other words, could make Target millions of dollars.Read more at location 3279

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Other companies analyze photos that consumers post online, cataloging if they are obese or skinny, short or tall, hairy or bald, and what kinds of products they might want to buy as a result.Read more at location 3358

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we know you’ve got a Target Visa, a debit card, and we can tie that to your store purchases,” Pole told an audience of retail statisticians at a conference in 2010. The company can link about half of all in-store sales to a specific person, almost all online sales, and about a quarter of online browsing.Read more at location 3373

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Andreasen wanted to know why these people had deviated from their usual patterns. What he discovered has become a pillar of modern marketing theory: People’s buying habits are more likely to change when they go through a major life event. When someone gets married, for example, they’re more likely to start buying a new type of coffee. When they move into a new house, they’re more apt to purchase a different kind of cereal. When they get divorced, there’s a higher chance they’ll start buying different brands of beer. Consumers going through major life events often don’t notice, or care, that their shopping patterns have shifted.7 However, retailers notice, and they care quite a bit.Read more at location 3411

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having someone enter or leave the household,” Andreasen wrote, are life changes that make consumers more “vulnerable to intervention by marketers.” And what’s the biggest life event for most people? What causes the greatest disruption and “vulnerability to marketing interventions”? Having a baby. There’s almost no greater upheaval for most customers than the arrival of a child. As a result, new parents’ habits are more flexible at that moment than at almost any other period in an adult’s life. So for companies, pregnant women are gold mines.Read more at location 3419

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New parents are so valuable that major retailers will do almost anything to find them, including going inside maternity wards, even if their products have nothing to do with infants.Read more at location 3436

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Disney estimates the North American new baby market is worth $36.3 billion a year.10Read more at location 3441

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in 1941, they set themselves a goal of systematically identifying the cultural barriers that discouraged Americans from eating organ meat. In all, more than two hundred studies were eventually published, and at their core, they all contained a similar finding: To change people’s diets, the exotic must be made familiar. And to do that, you must camouflage it in everyday garb22Read more at location 3642

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“With the pregnancy products, though, we learned that some women react badly. Then we started mixing in all these ads for things we knew pregnant women would never buy, so the baby ads looked random. We’d put an ad for a lawnmower next to diapers. We’d put a coupon for wineglasses next to infant clothes. That way, it looked like all the products were chosen by chance.Read more at location 3722

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Whether selling a new song, a new food, or a new crib, the lesson is the same: If you dress a new something in old habits, it’s easier for the public to accept it. IV. The usefulness of this lesson isn’t limited to large corporations, government agencies, or radio companies hoping to manipulate our tastes. These same insights can be used to change how we live.Read more at location 3740

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A movement starts because of the social habits of friendship and the strong ties between close acquaintances. It grows because of the habits of a community, and the weak ties that hold neighborhoods and clans together. And it endures because a movement’s leaders give participants new habits that create a fresh sense of identity and a feeling of ownership. Usually, only when all three parts of this process are fulfilled can a movement become self-propelling and reach a critical mass.Read more at location 3835

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liked. “Rosa Parks was one of those rare people of whom everyone agreed that she gave more than she got,”Read more at location 3878

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Parks’s friends, in contrast, spanned Montgomery’s social and economic hierarchies. She had what sociologists call “strong ties”—firsthand relationships—with dozens of groups throughout Montgomery that didn’t usually come into contact with one another. “This was absolutely key,” Branch said. “Rosa Parks transcended the social stratifications of the black community and Montgomery as a whole. She was friends with field hands and college professors.” And the power of those friendships became apparent as soon as Parks landed in jail.Read more at location 3889

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There’s a natural instinct embedded in friendship, a sympathy that makes us willing to fight for someone we like when they are treated unjustly. Studies show that people have no problem ignoring strangers’ injuries, but when a friend is insulted, our sense of outrage is enough to overcome the inertia that usually makes protests hard to organize. When Parks’s friends learned about her arrest and the boycott, the social habits of friendship—the natural inclination to help someone we respect—kicked in.Read more at location 3921

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She was a normal mom, with the same highs and lows as everyone else. So the compulsion she felt to gamble—the insistent pull that made her feel distracted or irritable on days when she didn’t visit the casino, the way she found herself thinking about it all the time, the rush she felt on a good run—caught her completely off guard. It was a new sensation, so unexpected that she hardly knew it was a problem until it had taken hold of her life. In retrospect, it seemed like there had been no dividing line. One day it was fun, and the next it was uncontrollable.Read more at location 4409

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Gamblers who keep betting after near wins are what make casinos, racetracks, and state lotteries so profitable. “Adding a near miss to a lottery is like pouring jet fuel on a fire,” said a state lottery consultant who spoke to me on the condition of anonymity. “You want to know why sales have exploded? Every other scratch-off ticket is designed to make you feel like you almost won.”Read more at location 4675

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Habits are not as simple as they appear. As I’ve tried to demonstrate throughout this book, habits—even once they are rooted in our minds—aren’t destiny. We can choose our habits, once we know how. Everything we know about habits, from neurologists studying amnesiacs and organizational experts remaking companies, is that any of them can be changed, if you understand how they function.Read more at location 4758

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Some are simple and others are complex, drawing upon emotional triggers and offering subtle neurochemical prizes. But every habit, no matter its complexity, is malleable. The most addicted alcoholics can become sober. The most dysfunctional companies can transform themselves. A high school dropout can become a successful manager.Read more at location 4763

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The framework described in this appendix is an attempt to distill, in a very basic way, the tactics that researchers have found for diagnosing and shaping habits within our own lives. This isn’t meant to be comprehensive. This is merely a practical guide, a place to start. And paired with deeper lessons from this book’s chapters, it’s a manual for where to go next. Change might not be fast and it isn’t always easy. But with time and effort, almost any habit can be reshaped.Read more at location 4858

The Big Questions: Ethics by Julian Baggini

noreply@blogger.com (Jim) — Thu, 15 Nov 2012 12:21:00 +0000

Part of a series of books looking at issues of our time: this one a series of essays looking at various sides of ethical arguments. In the end it doesn't come out with nice clean answers - more of 'it depends' but then life isn't made of nice clean answers.

this reflects a deeper truth about ethics: values often conflict, not because one is wrong and one is right, but simply because sometimes having more of one good means we cannot have as much of another.Read more at location 83

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movements around the Western world are claiming to stand for the 99 per cent against the 1 per cent, the wealthy minority in our countries who together own between a fifth and a third of each nation’s wealth. But, as Ord points out, this indignation is somewhat selective, since if we look at the world as a whole, many of those protesters are in the top 1 per cent and almost all are in the top 5 per cent. ‘When I was earning £14,000 as a student, I found I was in the richest 4 per cent in the world, even adjusting for how much further money goes in developing countries,’ Ord told the BBC in 2010. ‘Giving away 10 per cent of that, I found that I would still be in the top 5 per cent.’17 ‘It’s not particularly heroic or anything,’ he told another reporter. ‘At least half the people in Britain could probably think much more seriously about how much they could give.’Read more at location 604

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Given that nearly 50 per cent of people worldwide survive on less than $2.50 a day, almost all of us are among the richest people in the world and the majority of us could give away much more than we do and still be relatively wealthy, enjoying a very comfortable quality of life. Still, if we don’t want to do that, why should we?Read more at location 611

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Nonetheless, the argument that most of us do not do nearly as much as we should to help the world’s poor seems strong and compelling. It is no doubt unsettling to conclude this. But why should we expect moral philosophy to provide comfort? It’s role is not to justify everything we do, but to point us to how we might do better. In the case of global inequality, it points the way all too clearly.Read more at location 708

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Equasy is not an obscure drug. ‘It is used by many millions of people in the UK including children and young people,’ wrote Nutt. About ten people a year die of it, serious damage is caused once every 350 exposures and it is associated with over 100 road traffic accidents per year. Nutt concluded that, bearing in mind all its harms, ‘it seems likely that the ACMD would recommend control under the Misuse of Drugs Act, perhaps as a class A drug given it appears more harmful than ecstasy.’ So why does the law allow equasy but ban ecstasy? Because equasy stands for Equine Addiction Syndrome, ‘a condition characterized by gaining pleasure from horses and being prepared to countenance the consequences especially the harms from falling off/under the horse’. No government is going to ban horse-riding, but most do ban drugs that are arguably less harmful.Read more at location 722

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People are often reluctant to accept that rights are not natural because they think that if rights were just cultural artefacts they would be less binding. But perhaps this ‘just’ is misplaced. A non-natural right that is globally endorsed and upheld is surely worth more than a natural right that most people trample over. What matters for upholding rights is that laws and institutions recognize and value them, not whether they are natural or not.Read more at location 876

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Nonetheless, some do argue that life is of such value that it is always worth prolonging, no matter how horrible. But why would one think that? Does anyone seriously believe that it would be better if a person died at midday rather than was tortured for twelve hours from noon onwards and died at midnight? Surely everyone would prefer to die sooner than later in this situation. Although extreme, this example demonstrates the point that simply having more life does not mean having a better life overall. Quality matters as well as quantity.Read more at location 1143

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why is it OK if changes are natural and not if they are human-made? Cause seems irrelevant. What matters is whether changes are good or bad, and there is just no way to make sense of things being good or bad for the planet. The planet just is. For billions of years before humans came along it existed with no life, and will probably exist for billions more years after we’ve died out too. Far from making us humble, the idea that we have the power to hurt the earth is hubristic. From the hypothetical perspective of the earth (since, lacking consciousness, it has no perspective) we are at worst a temporary itch on something bigger and incomprehensibly longer-lived than ourselves. Nature doesn’t care what we do because it doesn’t have any thoughts or feelings, but it would not care even if it did.Read more at location 1681

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In that sense, what we need to protect is not the environment but our environment. What matters is keeping the planet hospitable to human life. It may seem as though respect for nature for nature’s sake is a worthy value which can only do us good. But it can in fact lead us badly astray.Read more at location 1693

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And so murder, infidelity, theft and so on are almost always wrong. But that doesn’t establish rules like ‘murder is wrong’ and it certainly doesn’t mean such actions are wrong because they break a moral rule. In that sense moral rules are more like laws of nature than laws of courts: they describe regularities found in nature, they do not prescribe regularities we ought to follow.Read more at location 2062

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We can identify many things that matter for morality: happiness, respect, equality and so on. But it is impossible to say that one principle is the master principle, from which all other moral rules are derived. In different times, at different places, for different people, moral priorities change. Just as babies, children, adults and the elderly need to be treated differently, so other variations in the human condition require different moral responses. That, I suspect, is the truth that makes some kind of relativism inevitable.Read more at location 2302

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Let’s say, for example, that you are a Christian. In the Book of Leviticus, there are all sorts of bizarre-sounding rules, laid down by God, which Christians no longer feel themselves obliged to follow. These include the death penalty for homosexuals and children who do not respect their parents, bans on eating hares and calamari, prohibitions on men trimming their beards, and approval of slavery. Most Christians believe, however, that the New Testament supersedes the Old and that these rules no longer apply. What this adds up to is the belief that what was wrong for the ancient Israelites is not wrong for modern Christians, on God’s command. That seems to me like a clear combination of relativism and the belief that God’s will underpins ethics.Read more at location 2326

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In many ways this should not be surprising, since many have argued that the trouble with divine command theory – the idea that what is right or wrong is what God commands – is that it leaves open the possibility that God could command what is currently wrong to be right and vice versa. (See the next chapter for more on this.) Christian texts seem to provide evidence that this is precisely what their God has done.Read more at location 2332

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If you put all these things together, you can see quite readily how something like morality emerges. Given brute facts and our desires, feelings and needs, we have good reason to uphold justice, to be fair and honest in our dealings with people, to show compassion, not to kill the innocent, and so on. These four factors together add up to a rationale for morality that is more than just enlightened self-interest, although that too is part of the mix and more often than not doing the right thing is better for us than not doing the right thing, in the long run at least.Read more at location 2426

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Without an effective police force, it’s not that everything is permitted but nothing is enforced.Read more at location 2463

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In morality, as in many other difficult areas of life, we want answers, so much so that we’ll often prefer a clear answer with a weak justification than accept a good justification for why there is no clear answer. Accepting a lack of answers in ethics is particularly difficult, since it seems to most of us that surely there must be some way of knowing what the right thing to do is. But is there?Read more at location 2472

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ethics. If we are looking for clear answers, strict objective rules, then I think we’ll look in vain. If we think that all moral dilemmas can be resolved, we will be disappointed. But if we accept that we can make better moral choices, ones with genuinely better outcomes, by thinking clearly and attending carefully to what we really value, then there is a point to philosophical ethics. The final choice is always your own, and only you can bear responsibility for it. And to take that responsibility requires, I think, giving ethics the serious time and thought it deserves.Read more at location 2587

Makers by Chris Anderson

noreply@blogger.com (Jim) — Sat, 10 Nov 2012 12:15:00 +0000

A fascinating book about the movement of people making things in their own backyards and then transferring the idea into mass production through 3rd party subcontract manufacturing houses.

When you go open source, you’re giving away something in hopes of getting back more in return. Is it guaranteed? No. You also need to build a community, ensure that the initial product is needed, documented, and distinct enough for people to want to join in its development. And even then, managing an open-source community can be a full-time job in itself. But when it works, it can be magical: an R&D model that’s faster, better, and cheaper than those of some of the biggest companies in the world.Read more at location 1654

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Bill Joy, one of the cofounders of Sun Microsystems, revealed a flaw in Coase’s model. “No matter who you are, most of the smartest people work for someone else,” he observed, stating what has now come to be known as “Joy’s Law.” His implication: for the sake of minimizing transaction costs, we don’t work with the best people. Instead, we work with whomever our company was able to hire. Even for the best companies, that’s a woefully inefficient process.Read more at location 2141

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As I write this, the hot product at the moment at Quirky is the “Pivot Power” flexible power strip. It’s like a regular power strip, but each outlet can pivot so that bulky power adapters don’t block neighboring outlets. Designed by Jake Zein, a software programmer from Milwaukee, Wisconsin, it’s classic Quirky: clever, clearly solving a problem, stylishly designed, and slightly inessential. It’s the kind of thing you’d see in the store and think, “Yeah, I hate it when I can’t fit power adapters in all the power strip outlets,” admire its design, and maybe buy one. You don’t need it, but once you’ve seen it you might want it.Read more at location 2698

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As at Kickstarter, there are countdown clocks and competitions everywhere—the whole thing feels like a game. You don’t need to have any ideas of your own to participate and feel as though you’re helping create things, or at least improve them. And it suits everyone from words people (names and taglines) to visual thinkers (design). Top influencers participate in dozens of projects and can earn thousands of dollars. It can be addictive, they report.Read more at location 2716

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Unlike Kickstarter and Quirky, Etsy doesn’t try to help Makers fund or create their products. Instead, it’s simply a way to sell them, with a strong social component that comes from its focus on handmade goods and the crafting and arts communities that make them. Like eBay, Etsy offers simple ways for sellers to create their own listings and handles the payment processing. It charges twenty cents for each listing for four months, and 3.5 percent of the sale.Read more at location 2744

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MFG.com would now remain independent, with Bezos as its main investor. Today it is the world’s largest custom manufacturing marketplace. It has more than 200,000 members in fifty countries and has brokered more than $115 billion in deals so far, with an average of $3–4 billion a month today. The deals that scroll by on any given day are typically pretty prosaic stuff—injection-molded plastic enclosures, machined metal rods, fasteners, specialty cables—but they give Free an unmatched window on the world of manufacturing today.Read more at location 3114

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For a lens into the new world of open-access factories in China, just search Alibaba (in English), find some companies producing more or less what you’re looking to make, and then use instant messaging to ask them if they can manufacture what you want. Alibaba’s IM can translate between Chinese and English in real time, so each person can communicate using their native language. Typically, responses come in minutes: we can’t make that; we can make that and here’s how to order it; we already make something quite like that and here’s what it costs.Read more at location 3176

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Perhaps the best known of these are Ponoko and Shapeways. Ponoko (on whose advisory board I sit as an unpaid volunteer) started in New Zealand as a laser-cutting service, but is now global and offers laser cutting, 3-D printing, and CNC cutting.Read more at location 3223

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Similar services exist for electronics (printed circuit boards), fabrics, and even ceramics. Meanwhile, the grandfather of them all is the Lego company, whose Lego Digital Designer CAD program for kids lets them do exactly the same thing with Lego bricks, creating a design onscreen, then uploading it to the service to be turned into a custom kit that is shipped back to them, looking just like an official Lego kit. Then, if others buy it, the designer will get a cut of the revenues.Read more at location 3238

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And that’s just chemistry. What happens when the tools get powerful enough to extend to biology and genetics? Today we can amplify and identify DNA at the kitchen table. Tomorrow we will be able to sequence it, too. But after that comes synthesizing it, modifying it, and the rest of genetic engineering. The day when only a small number of professional labs can do this, checking and screening every request that comes in, will soon end. At that point, people will start hacking life. We’ve been doing that for thousands of years with cross-breeding and agricultural genetics, but that was always within the bounds of nature. But in the lab, there are fewer such bounds. And the DIYbio Movement aims to create countless new labs. Why should trained scientists have all the fun?Read more at location 3349

The Connected Company by Dave Gray, Thomas Vander Wal

noreply@blogger.com (Jim) — Sun, 04 Nov 2012 10:52:00 +0000

Written about how to treat customers in the connected age, and how to treat employees so they treat customers well.

What I have come to realize is that without organizational and management innovation, business model innovation and adaptation to today’s fast-changing world rarely happens. To make it happen, we need to build new spaces for experimentation and learning.Read more at location 305

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If you make customers unhappy in the physical world, they might each tell six friends. If you make customers unhappy on the Internet, they can each tell 6,000 friends.Read more at location 327

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Customers trust each other more than they trust companies, who have a vested interest in making themselves look good. A 2009 Nielsen study found that 90% of customers trusted recommendations from other customers more than any other form of advertising. And customers have begun to recognize, and exercise, their power.Read more at location 486

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The problem is that the organizations that generated all this wealth were not designed to listen, adapt, and respond. They were designed to create a ceaseless, one-way flow of material goods and information. Everything about them has been optimized for this one-directional arrow, and product-oriented habits are so deeply embedded in our organizational systems that it will be difficult to root them out.Read more at location 587

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A recent study found that Great Britain, where the industrial revolution began, reached “peak stuff” levels between 2001 and 2003 — long before the 2008 recession — and material consumption has been declining ever since (it’s now down to the 1989 level).Read more at location 624

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Fifty percent of the world’s population today lives on 2 percent of the earth’s crust. In 1950, that number was 30%. By 2050, it is expected to be 70%.Read more at location 643

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Furthermore, products are anchors. Investments in manufacturing take time to provide returns, and during this time period, customer needs are likely to change. Investing in physical products “hardens” the offering and reduces the company’s ability to respond and adapt to changing customer preferences. Investing in services “softens” the offering and increases the company’s flexibility. Since costs aren’t sunk into a single product, it’s easier to shift the offering and keep pace with customer demands.Read more at location 761

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The first step to a service orientation is to change the way we think about products. Instead of thinking about products as ends in themselves, we need to think of them as just one component in an overall service, the point of which is to deliver a stellar customer experience.Read more at location 782

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A service is different. While processes are designed to be consistent and uniform, services are co-created with customers each and every time a service is rendered. This difference is not superficial but fundamental. A process has only one customer: the person who receives the final result. A process is rule-bound and tightly regulated. The quality of a process’s output can be judged by the customer at the end of the line. A service, on the other hand, is at its core a relationship between server and served. Service is work performed in support of another person. At every point of interaction, the measure of success is not a product but the satisfaction, delight, or disappointment of the customer.Read more at location 847

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Many companies focus on those costs that are easily identified on the financial statements. But by cutting those costs, they are playing a shell game. In actuality, they are just moving those costs around. They are eating their own future: reducing today’s costs at the expense of long-term customer relationships and customer loyalty. Pissed-off customers won’t stay any longer than they have to.Read more at location 1021

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Of course, the more idiot-proof the system, the more behavior is constrained, forcing people to act like idiots even when it’s against their better judgment. Even when your employees know there’s a better way to do something, they will often be constrained by policies and procedures that were designed to reduce variety in the system. If your system needs to solve problems that you can’t anticipate, then it’s going to fail, because automated systems and employees who are treated like idiots can’t solve problems.Read more at location 1367

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Attempts to standardize the work will make costs go up, not down. This is because standardizing the work reduces the ability of your system to absorb variety. We try to cage variety into nice neat swim lanes — for example, voice menus in an automated voice system. But when there is a lot of variety in your environment, these kinds of control systems are exactly the way to make things not work.Read more at location 1411

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This fast-follower strategy is common both in nature and in business. McDonald’s uses sophisticated market research when deciding to open a new store. But competitor Burger King simply watches McDonalds’ moves and opens new locations nearby. Adaptive moves can also change the environment in which firms operate.Read more at location 1608

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Darwin said, “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.” When the world is constantly changing, the speed at which you can learn is the only thing that can give you a long-term, sustainable advantage. The problem is that while today’s companies are very good at processing information and producing outputs, they don’t know how to learn.Read more at location 1683

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Companies are made up of people, who have wills of their own. People can be guided and governed, but they don’t like to be controlled. They prefer to have control over their work, and if you push them too hard, they push back.Read more at location 1841

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The problem comes with scale. As the number of employees grows, the profit per employee shrinks. It’s a game of diminishing returns. Efficiencies of scale are balanced by the burdens of bureaucracy. Divisions become silos, disconnected from each other. Overhead costs increase with size. Eventually, the company reaches a point where the costs of control exceed the benefits of further growth, or the company becomes too internally focused and loses touch with the market.Read more at location 1917

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intent is a style of management used by the US Military when a situation is too complex or uncertain to give detailed orders. Command intent is a set of goals and a vision for possible methods of achieving those goals. It’s sufficiently high-level that it can be broadcast widely to everyone in the system, and front-line troops can then interpret how those goals apply to their front-line situation.Read more at location 1974

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The causes of success are never revenue, cost, profit, or other financial measures; these are lagging indicators or effects. A profit number by itself tells you nothing about the long-term value of a company. What matters are the activities that generate the profits: are they activities that create long-term value? Or are they activities that destroy value?Read more at location 2048

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Marketing’s job is to make realistic promises that help set customer expectations. It’s the job of the rest of the organization to deliver on that promise. It’s all about the match. A company that promises more than it can deliver will disappoint customers, and that’s very dangerous, because today’s customers have the tools to tell the world about their poor service experiencesRead more at location 2172

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Promoters are less price sensitive, they increase their spending faster, they accelerate your growth, and they have a positive lifetime value to your business. Detractors defect at higher rates, complain more, and cost more to serve. They are a drag on growth and have a negative lifetime value to your business. New customers referred by promoters are more likely to become promoters themselves. Another study found that improving your client retention rate by 5% boosts profits from 25 to 100%.Read more at location 2223

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The Net Promoter Score The Net Promoter Score (NPS), developed by Fred Reichheld of Bain & Company, measures the customer perception of quality with a single question: “On a 0 to 10 scale, how likely are you to recommend us to a friend or colleague?” The Net Promoter Score gives you an unambiguous number that can be used to quantify the value you are delivering to customers. Customers fall into three well-defined categories, each of which exhibits a distinct kind of behavior. Promoters, who respond with a nine or a ten, are your most loyal customers and your biggest fans. They make repeat purchases and spend more than other customers. They recommend you to others. They also contribute more, by taking the time to give constructive feedback and suggestions. Passives, who respond with a seven or eight, are not loyal to you. They are likely to defect if another company comes up with a better offer. They rarely recommend you to others, and if they do, the recommendation is likely to be qualified or unenthusiastic. Detractors are customers who give you a score of six or lower. They feel that their lives have been diminished by interactions with you. They are likely to badmouth you to anyone who will listen. They complain and they drive up your costs. Reichheld also recommends a follow-up question: “What is the primary reason for your score?” This question serves as a diagnostic, to help you determine which of your practices have the most impact on customers, for good or ill. It’s a request for feedback about how you can do better. The Net Promoter Score is calculated by subtracting the percentage of customer detractors from the percentage of promoters (you throw out the passives). In 10 years of research, Reichheld and his colleagues have found that companies with high Net Promoter Scores gain more market share, spend less on marketing, and make more in profits than their peers. No other question correlated more strongly with sales and profits.Read more at location 2266

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Logitech tracks NPS alongside revenue in each product category. Every product has a Net Promoter Score and products can be rank-ordered by score. And NPS translates directly into business results: products that are number one in the company’s NPS rankings are consistently number one in revenue.Read more at location 2384

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In many companies today, the people at the top try to design processes with rules and procedures that will predictably and reliably solve any problem that should arise. But processes are brittle. A new process breaks a lot. And when a process breaks, we usually fix it by changing it, or adding a few more rules to handle exceptions. Over time, most processes become rigid, bureaucratic, and bloated with rules, regulations, and procedures for handling this or that.Read more at location 2425

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People at the edge, therefore, have a lot of autonomy, and they tend to make more accurate decisions and take them more seriously as a result. When people who are accountable for decisions encounter uncertainty, they will rely on the more experienced members of the crew, regardless of rank.Read more at location 2558

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Agile development is about small teams that deliver real, working software at all times, get meaningful feedback from users as early as possible, and improve the product over time in iterative development cycles. Developing software in an agile way allows developers to respond rapidly to changing requirements. Agile developers believe that where uncertainty is high, there is no such thing as a perfect plan, and the farther ahead you plan, the more likely you are to be wrong.Read more at location 2636

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Teams are limited in size to about 8–10 people. At Amazon, they call them two-pizza teams: if you can’t feed a team with two pizzas, it’s too large.Read more at location 3225

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In the US, the average Internet user spends more time on Facebook than on any other site. And Facebook provides zero content. Zero. All of Facebook’s content is provided by users. Facebook concentrates on providing a platform for all of its users to interact, start businesses, advertise, and exchange information. Facebook is a city, more than 20 times the size of Tokyo.Read more at location 3328

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The logic of innovation is simple: work with what you have, seek commitments from others, evolve goals from individual to mutual, grow, and gain momentum. If you fail, move on.Read more at location 3629

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Exercise of power in networks requires high awareness of the network’s state, risks, and potential; an ability to influence other nodes; and a high degree of compatibility with existing standards. The greatest power in a network is the degree to which a node can influence or control the platforms and standards that set the rules for connection.Read more at location 4032

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To build momentum for a network, it is often very advantageous to give a lot away to early adopters. The lower the uncertainty and the easier it is for people to join, the faster the network will grow.Read more at location 4057

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The more people and organizations that depend on a platform, the greater its power; but any platform is only as powerful as the people and companies that depend on it. If members decide to abandon a platform, it can become a ghost town. Consider AOL and MySpace. Facebook developers are dependent on Facebook for the platform they use to build, sell, distribute and manage their services. Thus, Facebook has a great degree of power over the network. But even Facebook, as powerful as it is, depends on developers as much as the developers depend on it. If developers abandon Facebook’s platform, Facebook will be in trouble. The best platform approach is to extract enough value from the network members to cover your costs, and then share the benefits with members.Read more at location 4091

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Part Four. How do you lead a connected company? Connected companies are living, learning networks that live within larger networks. Power in networks comes from awareness and influence, not control. Leaders must create an environment of clarity, trust, and shared purpose, while management focuses on designing and tuning the system that supports learning and performance.Read more at location 4118

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Strategy is usually considered the province of senior executives. But senior executives are in some ways the least qualified to envision the future, because they are the most invested in the past and the least likely to be around in the long term. In a connected company, strategy happens at all levels, across diverse groups and different time scales, generating a rich pool of experiments for senior leaders to draw from.Read more at location 4131

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Diversity breeds creativity — ecosystems are richest where habitats and species overlap. With more connections and diversity comes more creativity: diverse communities are more interesting, more provocative, and more stimulating.Read more at location 4181

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Without a lot of exciting new options, managers will inevitably opt for more of the same. That’s why renewal depends on a company’s ability to generate and test hundreds of new strategic options. There’s a power law here: Out of 1,000 crazy ideas, only 100 will merit a small-scale experiment. Of those, only 10 will be worth serious investment, and out of that bundle, only 1 or 2 will have the power to transform a business or spawn a new one. Google gets this. Within its core search business, the company tests more than 5,000 software changes a year and implements around 500.Read more at location 4191

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Many companies solicit innovation ideas from employees and customers, but few are successful in generating a large and diverse enough set of ideas to generate valuable insights. This is partly because in many companies, new ideas must run through a harrowing gauntlet of filters before anyone is allowed to make a move. Companies can increase the number of experiments by lowering the bar. In order to “let a thousand flowers bloom,” you need to make it as easy as possible for people to try things. Diversity requires tolerance for some degree of redundancy and slack in the system. People who are 100% utilized don’t have time to generate new ideas. Google and 3M allow employees to spend 20% of their time — that’s equivalent to one day a week — exploring ideas for new projects, products, and initiatives. W.L. Gore does the same thing. They call it “dabble time.”Read more at location 4208

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For medium bets, you want to think like a venture capitalist, spreading risk around by making a number of medium-sized bets, with the expectation that only one or two of them will really take off. The idea is to create a market for good ideas, so that a person or team with an innovative idea can shop it around. For example, give managers throughout the company discretionary budgets that can only be used for innovation projects. Let them fund ideas across the organization, not just in their own team.Read more at location 4230

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From this, we derive leadership rule number one: attract good people. Good people have more choices about where they go to work. Good people don’t tolerate bad bosses. Good people commit themselves to the work because they enjoy the work, they enjoy the challenge, and they enjoy making things happen. And good people manage themselves, for the most part. The better your people, the better your performance will be. As a leader, if you attract and hire good people in the first place, half of your leadership problems are solved right out of the gate. Your job is to set an example, articulate the strategy, appreciate people, and for the most part, get out of the way. The role of leader is not given or appointed, it is earned. There are leaders in every organization, and they are not always at the top. You are a leader not because you say you are, but because people listen to you and because people follow you. Do people like their bosses and get along with them? Do people feel appreciated?Read more at location 4447

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Prefer richer communication whenever possible. You can reach out via email, but you can only hug someone or put a hand on the shoulder in real life. As a leader, you embody the purpose, and the purpose needs to be not only seen and heard, but also felt.Read more at location 4536

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Principles are liberating, whereas policies are constraining. Principles are rules of thumb that can help people make decisions in all kinds of situations. Principles make use of human judgment. Policies, on the other hand, restrict and constrain and reduce the human element. You know you have a good principle when you can write a simple yes-or-no question that will enable anyone in your company to make strategy decisions at both macro and micro scales. For example, “Will this decision put the customer first?” Nordstrom employees know that they will never be punished or reprimanded for making a decision that puts a customer first.Read more at location 4617

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When principles are at the core of your competitive strategy, you must hire for attitude first. You can train people on skills, but you can’t train them on attitude. Employees must be a good fit. Hire for attitude, orient for values, and train for skills. Rackspace CEO Lanham Napier says, “It really comes down to core values, and we don’t train our employees in core values. Their parents did that a long time ago.”Read more at location 4654

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Waiting time increases gradually until utilization reaches a critical tipping point (around 70%), after which response times start to shoot up exponentially. So incremental increases in efficiency are good up to a point, after which they become a very bad thing indeed. In other words, an ambulance that arrives after the patient has died is of no use at all.Read more at location 4789

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Gore CEO Terri Kelly on how Gore manages incentives: An associate will be evaluated by 20 or 30 peers and will, in turn, evaluate 20–30 colleagues. You rank your peers from top to bottom. It’s a forced ranking. You’re asked to rank only people you know. What we find is that there’s typically a lot of consistency in who people view as the top contributors, and who they put at the bottom of the list…We have a cross-functional committee of individuals with leadership roles who look at all this input, debate it, and then put together an overall ranking, from first to last, of those particular associates. Then, in setting compensation, they ensure there’s a nice slope to the pay curve so that the folks who are making the biggest contributions are also making the most money.Read more at location 4808

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The pace of information flow at 7-Eleven Japan allows it to run circles around competitors. The approach has been so successful that sales at 7-Eleven Japan exceeded sales of the parent 7-Eleven company, and in 1991, 7-Eleven Japan bought the debt-burdened American parent. In 2007 7-Eleven became the largest chain store in the world, bigger even than McDonald’s, with over 40,000 locations.Read more at location 5028

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“When you do innovation in a large company, the immune system will come and attack you. A large company is basically an organism, and it has antibodies and an immune system, and those things will come and attack.”Read more at location 5193

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Do You Work at a Place that Ignites Your Passion? The first step on the journey is to ask yourself what you want. Do you identify with the purpose of your company? Is it a place you want to be? Companies run on passion, and if you can’t find the passion in the work you’re doing today, then you’re in the wrong place. The core of a connected company is a shared purpose that everyone in the company can get excited about. That’s the starting point. Companies are in many ways just like people. They all have their lovable qualities and they all have flaws. If you can’t find something to love about your company, then you are not doing yourself or the company a favor by staying. Even if it is deeply flawed in many ways, you need to be able to believe in a future that’s worth pursuing, or there’s no point. I’m not suggesting you need to quit today, but the world is too exciting and there are too many opportunities out there to stay in a job you don’t enjoy. Start looking for something you can get excited about.Read more at location 5318

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What customers want is not just connectedness. They want people who can serve their needs and solve their problems. If employees have access to social technologies but are still bound by scripts and procedures, if workers can connect with customers but don’t have the power to act, then you haven’t got a connected company. You’ve got a connected prison, and your employees will be worse than demoralized when they find they are connected to customers but unable to do anything for them.Read more at location 5667

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In the future, every company will be a connected company. Although they may be able to survive for some time, eventually every company must give customers what they want — or they will die. And connected customers are already demanding more than divided, industrial-age companies can deliver. This future is inevitable and it’s only a matter of time. Some leaders are rising to the challenge. They are organizing for adaptiveness by distributing control and building platforms to support autonomous teams. They are creating open environments of trust and connection with employees, partners, and customers. They are managing their companies as complex adaptive systems where continual learning and experimentation are part of the game. The challenges are substantial, but there is no choice. As connected company pioneer Jack Welch said, “Change before you have to.”Read more at location 5680

Transforming the Corporation - Running a Successful Business in the 21st Century by Andreas C. Kramvis

noreply@blogger.com (Jim) — Tue, 25 Sep 2012 09:00:00 +0000

I was recommended this book by Peter Conway and he was right, it did contain several useful insights into how to manage companies from someone who has turned around a few in his time.

Great Positions in Good Industries – a simple, yet powerful concept, based on the idea that a great position allows you to gain share because you have critical mass in R&D, feet-on-the-street, and in the back office, and a good industry provides a tailwind for growth.Read more at location 75

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The market research is very simple. Ask the people who work in each department to answer a few basic questions: • What are the first five priorities for this department? • What are the priorities, in order of importance, for the company? • How do you fit in them? The same questions can be asked of the team working directly for you, no matter what type of team you manage. The differing results obtained from this piece of research can be astounding and will reveal the level of alignment existing in your business.Read more at location 433

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Furthermore, if the decisions were made by somebody not knowledgeable of the marketplace then surely we would soon become disconnected from it. Disconnection from the marketplace leads to decision-making based on financial and internal considerations alone, which does not lead to growth and prosperity.Read more at location 631

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My visit with the European team was very timely. They were very frustrated and knew the business was steadily heading in the wrong direction but could not do much about it. They had no real authority and had to refer decisions to somebody who was a long way away and did not understand the real issues or the implications.Read more at location 633

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A number of organizations are terrifically in love with their own processes; with these companies, there is an implicit belief that the function of the organization is to execute these processes.Read more at location 653

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Productivity is one of the great pillars of success. But, when productivity is the sole pillar, it becomes a very disabling activity. It results in types of behavior that cause the fear of investment in the business, the automatic removal of cost without assessing the value created by the cost,Read more at location 658

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Organizations that are not sales and marketing driven simply have a very inflated view of their knowledge of the market and are sometimes not even knowledgeable about their channels or their customer’s customer.Read more at location 665

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In a control culture people work in an environment where they are not given any room for initiative; this is a common failure in the structure of many organizations. Over time, people learn to execute orders and have stopped thinking. It is a sad situation and a lot of energy can be released if it is turned around. Unfortunately, it always takes longer than expected to train and empower people to think for themselves and take ownership when they have no experience with ownership or thinking.Read more at location 685

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Ultimately, however, any executive has one item to dispense and one item to manage; he dispenses his know-how and he manages his time. Incidentally, the same applies to the next level down and the level after that. So, in any operating mechanism, you need to come up with a system that is effective but very economical on the time of the leadership and of the organization.Read more at location 1110

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As we move from issue to issue in each session (most topics require a focus of about 30 minutes, including a 15-minute prepared presentation), what unfolds is a panoramic exposure to the affairs of the company. An enormous amount of learning takes place as these issues are resolved and progressed.Read more at location 1218

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In my role as a business leader, I do not require personal loyalty but I do require a high level of professionalism. I also expect that anyone who holds a particular viewpoint (contrary or not) is able to explain and perhaps document his or her reasoning, and argue the merits of his or her case succinctly. I do not measure employee loyalty by how much any one individual agrees with me, but rather by how hard he or she works to help generate good economic solutions that will further the company’s goals and vision. I understand,Read more at location 1370

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For instance, our ability to establish data on daily inventory results in our factories and warehouses completing all inventory transactions on a daily basis, thus avoiding piling or postponing transactions for the future.Read more at location 1431

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require major investments be aired at their infancy and again as cases are prepared and investigated. With all of our major projects, and with investments in particular, we systematically prepare a 90-day look ahead. In some instances, we may follow a risky situation as it progresses over the span of a year or more.Read more at location 1564

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1. A good decision does not depend on the external or economic conditions of the moment. Its foundations are not ephemeral and can withstand tests on either side of economic expectation. In other words, it is a decision with a built-in margin for error as it allows for a degree of things to go awry. In practical terms this means I prefer to rely on strong trends, and undertake continuous market confirmation of these trends, rather than try to exploit a situation of special circumstances.Read more at location 1640

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2. A good decision is directionally correct and does not aim up-front to be correct at the detail level.Read more at location 1645

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3. A good decision, to the extent possible, is reversible.Read more at location 1648

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4. A good decision has a number of beneficial by-products and I always aim to capture those, although I never count them into my financial evaluation.Read more at location 1650

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5. A good decision balances the upside and downside risks; it avoids the situations where the downside can be catastrophic.Read more at location 1656

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1. Fast-Cycle Application Product Development, which takes an expansive view of opportunities, focuses on the most profitable applications and brings them to market rapidly – usually within 12-24 months. 2. Large Molecule/Scale-Up, which seeks advantaged cost positions and long-term productivity, supported by strong intellectual property positions and the required capabilities to scale-up inventions from the laboratory to world-class production facilities. This process can take 5-8 years or more, but once the new products are in place, they can last a generation or more. 3. Technology Leadership, which emphasizes deploying the best scientific talent to identify and capitalize on process improvement opportunities and commercializing process technologies that improve customer economics.Read more at location 1702

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Your decision about where you place your focus depends first on the way the business provides its products and services to customers and second on how these activities are supported by the decision flow up and down the organization. In particular, you need to: • Understand the dynamics of how customers are acquired and how new business is earned, or conversely lost. • Understand how the competition delivers these same products. • Assess and understand the internal organization needed to develop and deliver profitable and differentiated products. • Understand how decisions are made and how they flow at all levels in the organization to support the above activities.Read more at location 1747

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generating alternatives—are spread throughout an organization, they have major impact on the amount of money we spend, as well as on the quality of projects and ideas we invest in. Generally speaking, the amount of capital required hitherto is significantly reduced as people readily discover more intelligent and less capital-intensive ways to achieve the same or better results.Read more at location 1883

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As a rule and also by way of a shortcut in the analysis, the closer to the end customer you can influence the sale of a product, the stronger your long-term positionRead more at location 1917

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In my experience, transforming a sagging sales force into a powerhouse is a long-term activity. Generally speaking, it requires at least two years of determined effort. You must develop the data and the tools, as well as implement the new direction before you begin realizing results. Even then, you are talking about a multiyear effort of continuous improvement. The reason the whole activity takes so long is that it involves many complex steps: you must first develop a market-map, then develop the marketing strategy, and finally determine the needed sales skills. After that, to achieve maximum effectiveness, you must retrain your sales force and assign new tasks to redeploy.Read more at location 1947

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In most markets, market-share loss occurs because a competitor has entered the low end of the market. When this happens, companies that eventually fail are those willing to cede the low end under some notion that this is the only option to protect profitability.Read more at location 1981

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Planning how you will protect the low end of your market and preparing for that time when a new entrant comes along should be a pivotal, perennial objective if you want to run a successful business. In addition, it will reveal opportunities you have with respect to your competitors and what action you must take to become the aggressor.Read more at location 1988

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Allocate new resources into the new areas with the most promising potential as opposed to the areas of strength of the past. The organization will automatically lead you to do the latter, something you need to avoid.Read more at location 2012

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You also need to pay attention to which customer you are asking the questions about. It generally pays to focus on the end customer, but also take into consideration whether there are enough benefits to any others involved such as distributors, OEMs and channel partners. There must be value for all, otherwise the initiative will not succeed.Read more at location 2474

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4. To effect transformation, it is necessary to go beyond the normal plan and target activities into four groups: • Identify areas for disinvestment • Develop areas that give constant productivity • Improve the fundamentals in the business • Invest in game-changing movesRead more at location 2773

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1. Establish Market Metrics: Share, Customer Preference and Satisfaction, Quality The most common areas to keep a continuous eye on are the areas of market share, customer preference and satisfaction, and quality of product compared to competition. These metrics are a requirement, although it may not be possible to establish them accurately in some industries.Read more at location 3235

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Improving Your Memory (Essential Managers) by David Thomas

noreply@blogger.com (Jim) — Mon, 20 Aug 2012 08:52:00 +0000

I know the book author and have heard him speak on this topic several times. The book contains the key elements of his presentations but you really should hear him in person if you get the chance.

Memory-training techniques will certainly improve your IQ – by broadening your vocabulary, for example. Another way to increase your score is to practise doing the test: each time you do an IQ test, you learn from the questions asked, so your memory builds up a bank of experience that it can call upon in the future.Read more at location 99

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Also fundamental to memory training is the brain’s natural propensity to organize information in patterns. Look for patterns and, if order is not paramount, reorganize the information. For example, when you have a list, look for words beginning with the same letter. See if things fit into categories: perhaps five things are items of stationery and four are household objects. Are any of the things the same colour? By breaking a large group of things into several smaller ones, you make it easier to assimilate.Read more at location 355

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A second system to help memorize names is known by the acronym SLUG. The letters stand for Slow down the introduction, Listen to the name, Use the name, Go over the name.Read more at location 540

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“Learning without thought is labour lost; thought without learning is perilous.” ConfuciusRead more at location 1025

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Most new information is lost within one day if you do not go over it an hour after learning it. Only by reviewing at regular intervals will you maintain long-term recall. As you become proficient at memorizing and recalling, you will feel confident enough to set new targets.Read more at location 1047

Everything is Obvious by Duncan J. Watts

noreply@blogger.com (Jim) — Tue, 31 Jul 2012 08:45:00 +0000

A great book about our delusions of understanding the real causes or explanations of events and instead settling for the simpler or easier to recall ones.

When every answer and its opposite appears equally obvious, then, as Lazarsfeld put it, “something is wrong with the entire argument of ‘obviousness.’Read more at location 105

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whether it’s learning to fit in at a new school, or learning the ropes in a new job, or learning to live in a foreign country, we’ve all had to learn to negotiate new environments that at first seem strange and intimidating and filled with rules that we don’t understand but eventually become familiar. Very often the formal rules—the ones that are written down—are less important than the informal rules, which just like the rule about subway seats may not even be articulated until we break them. Conversely, rules that we do know about may not be enforced, or may be enforced only sometimes depending on some other rule that we don’t know about. When you think about how complex these games of life can be, it seems kind of amazing that we’re capable of playing them at all. Yet in the way that young children learn a new language seemingly by osmosis, we learn to navigate even the most novel social environments more or less without even knowing that we’re doing it.Read more at location 219

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But as a number of management scholars have shown in recent years, corporate plans—whether strategic bets, mergers and acquisitions, or marketing campaigns—also fail frequently, and for much the same reasons that government plans do.22 In all these cases, that is, a small number of people sitting in conference rooms are using their own commonsense intuition to predict, manage, or manipulate the behavior of thousands or millions of distant and diverse people whose motivations and circumstances are very different from their own.23Read more at location 435

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Continuing this litany of irrationality, psychologists have found that human judgments are often affected by the ease with which different kinds of information can be accessed or recalled. People generally overestimate the likelihood of dying in a terrorist attack on a plane relative to dying on a plane from any cause, even though the former is strictly less likely than the latter, simply because terrorist attacks are such vivid events. Paradoxically, people rate themselves as less assertive when they are asked to recall instances where they have acted assertively—not because the information contradicts their beliefs, but rather because of the effort required to recall it. They also systematically remember their own past behavior and beliefs to be more similar to their current behavior and beliefs than they really were. And they are more likely to believe a written statement if the font is easy to read, or if they have read it before—even if the last time they read it, it was explicitly labeled as false.14Read more at location 683

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All our participants were recruited from a website called Amazon’s Mechanical Turk, which Amazon launched in 2005 as a way to identify duplicate listings among its own inventory. Nowadays, Mechanical Turk is used by hundreds of businesses looking to “crowd-source” a wide range of tasks, from labeling objects in an image to characterizing the sentiment of a newspaper article or deciding which of two explanations is clearer. However, it is also an extremely effective way to recruit subjects for psychology experiments—muchRead more at location 788

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We also found that for any given pay rate, workers who were assigned “easy” tasks—like sorting sets of two images—completed more tasks than workers assigned medium or hard tasks (three and four images per set respectively). All of this, in other words, is consistent with common sense. But then the kicker: in spite of these differences, we found that the quality of their work—meaning the accuracy with which they sorted images—did not change with pay level at all,Read more at location 798

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In other words, no matter what they were actually paid—and remember that some of them were getting paid ten times as much as others—everyone thought they had been underpaid. What this finding suggested to us is that even for very simple tasks, the extra motivation to perform that we intuitively expect workers to experience with increased financial incentives is largely undermined by their increased sense of entitlement.Read more at location 807

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cumulative advantage models have disruptive implications for the kinds of explanations that we give of success and failure in cultural markets. Commonsense explanations, remember, focus on the thing itself—the song, the book, or the company—and account for its success solely in terms of its intrinsic attributes. If we were to imagine history being somehow “rerun” many times, therefore, explanations in which intrinsic attributes were the only things that mattered would predict that the same outcome would pertain every time. By contrast, cumulative advantage would predict that even identical universes, starting out with the same set of people and objects and tastes, would nevertheless generate different cultural or marketplace winners. TheRead more at location 1126

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Employees, for example, may well influence their bosses as much as their bosses influence them, but they are not equally likely to name each other as sources of influence—simply because bosses are supposed to be influential, whereas employees are not. In other words, our perceptions of who influences us may say more about social and hierarchical relations than influence per se.Read more at location 1383

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as it turned out, the most important condition had nothing to do with a few highly influential individuals at all. Rather, it depended on the existence of a critical mass of easily influenced people who influence other easy-to-influence people.Read more at location 1453

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What we concluded, therefore, is that the kind of influential person whose energy and connections can turn your book into a bestseller or your product into a hit is most likely an accident of timing and circumstances. An “accidental influential” as it were.22Read more at location 1465

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Of 74 million events in our data, only a few dozen generated even a thousand retweets, and only one or two got to ten thousand. In a network of tens of millions of users, ten thousand retweets doesn’t seem like that big a number, but what our data showed is that even that is almost impossible to achieve. For practical purposes, therefore, it may be better to forget about the large cascades altogether and instead try to generate lots of small ones. And for that purpose, ordinary influencers may work just fine. They don’t accomplish anything dramatic, so you may need a lot of them, but in harnessing many such individuals, you can also average out much of the randomness, generating a consistently positive effect.Read more at location 1568

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In other words, although it is tempting to attribute the outcome to a single special person, we should remember that the temptation arises simply because this is how we’d like the world to work, not because that is how it actually works.Read more at location 1761

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common sense and history conspire to generate the illusion of cause and effect where none exists. On the one hand, common sense excels in generating plausible causes, whether special people, or special attributes, or special circumstances. And on the other hand, history obligingly discards most of the evidence, leaving only a single thread of events to explain. Commonsense explanations therefore seem to tell us why something happened when in fact all they’re doing is describing what happened.Read more at location 1763

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at no point in time is the story ever really “over.” Something always happens afterward, and what happens afterward is liable to change our perception of the current outcome, as well as our perception of the outcomes that we have already explained.Read more at location 1881

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psychologists have found that simpler explanations are judged more likely to be true than complex explanations, not because simpler explanations actually explain more, but rather just because they are simpler.Read more at location 1897

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The real problem of prediction, in other words, is not that we are universally good or bad at it, but rather that we are bad at distinguishing predictions that we can make reliably from those that we can’t.Read more at location 1993

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Whenever people get together—in social gatherings, sports crowds, business firms, volunteer organizations, markets, political parties, or even entire societies—they affect one another’s thinking and behavior.Read more at location 2046

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another way, there is a difference between being uncertain about the future and the future itself being uncertain. The former is really just a lack of information—something we don’t know—whereas the latter implies that the information is, in principle, unknowable. The former is the orderly universe of Laplace’s demon, where if we just try hard enough, if we’re just smart enough, we can predict the future. The latter is an essentially random world, where the best we can ever hope for is to express our predictions of various outcomes as probabilities.Read more at location 2108

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As I mentioned at the beginning of the previous chapter, keeping track of our predictions is not something that comes naturally to us: We make lots of predictions, but rarely check back to see how often we got them right. But keeping track of performance is possibly the most important activity of all—because only then can you learn how accurately it is possible to predict, and therefore how much weight you should put on the predictions you make.12Read more at location 2441

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This is the strategy paradox. The main cause of strategic failure, Raynor argues, is not bad strategy, but great strategy that just happens to be wrong. Bad strategy is characterized by lack of vision, muddled leadership, and inept execution—not the stuff of success for sure, but more likely to lead to persistent mediocrity than colossal failure. Great strategy, by contrast, is marked by clarity of vision, bold leadership, and laser-focused execution. When applied to just the right set of commitments, great strategy can lead to resounding success—as it did for Apple with the iPod—but it can also lead to resounding failure. Whether great strategy succeeds or fails therefore depends entirely on whether the initial vision happens to be right or not. And that is not just difficult to know in advance, but impossible.Read more at location 2521

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errors—Mintzberg recommended that planners should rely less on making predictions about long-term strategic trends and more on reacting quickly to changes on the ground. Rather than attempting to anticipate correctly what will work in the future, that is, they should instead improve their ability to learn about what is working right now. Then, like Zara, they should react to it as rapidly as possible, dropping alternatives that are not working—no matter how promising they might have seemed in advance—and diverting resources to those that are succeeding,Read more at location 2621

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Plans fail, in other words, not because planners ignore common sense, but rather because they rely on their own common sense to reason about the behavior of people who are different from them.Read more at location 2958

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The Halo Effect, in other words, turns conventional wisdom about performance on its head. Rather than the evaluation of the outcome being determined by the quality of the process that led to it, it is the observed nature of the outcome that determines how we evaluate the process.Read more at location 3077

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whenever we find ourselves describing someone’s ability in terms of societal measures of success—prizes, wealth, fancy titles—rather than in terms of what they are capable of doing, we ought to worry that we are deceiving ourselves.Read more at location 3213

Persuasion Skills Blackbook: Practical NLP Language Patterns for Getting The Response You Want by Rintu Basu

noreply@blogger.com (Jim) — Thu, 05 Jul 2012 08:35:00 +0000

I never actually finished reading the book. It is designed as a series of exercises built on each other week by week to enhance your persuasion skills using NLP techniques

This pattern works on the basis that people like to be agreed with. Often to the point that the words “I agree” are enough for them. Think about this for a moment. If I said I disagreed with you it would feel worse than if I said I agreed. In fact what I am agreeing or not agreeing with is almost irrelevant at this point.Read more at location 308

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Your reality is only a matter of perspective and it can and does change. If my manager had been focused on my version of reality he might have seen the easy route to change it and create a new reality that gave the company what was needed and made me a happier man.Read more at location 491

The Magic of Reality by Richard Dawkins

noreply@blogger.com (Jim) — Thu, 28 Jun 2012 07:04:00 +0000

A bit "dumbed down" from some of his earlier work, I guess in a bid to try and win a wider audience. He draws on various magical and miraculous stories from various texts and explains why teh simple explanation is much more plausible, and in fact all the more 'magical' in the sense of wondrous.

All peoples around the world have origin myths, to account for where they came from. Many tribal origin myths talk only about that one particular tribe – as though other tribes don’t count! In the same way, many tribes have a rule that they mustn’t kill people – but ‘people’ turns out to mean only others of your own tribe. Killing members of other tribes is just fine!Read more at location 302 •
You were once a baby. Now you are not. When you are a lot older you’ll look quite different again. Yet every day of your life, when you wake up, you are the same person as when you went to bed the previous night. A baby changes into a toddler, then into a child, then into an adolescent; then a young adult, then a middle-aged adult, then an old person. And the change happens so gradually that there never is a day when you can say, ‘This person has suddenly stopped being a baby and become a toddler.’ And later on there never comes a day when you can say, ‘This person has stopped being a child and become an adolescent.’ There’s never a day when you can say, ‘Yesterday this man was middle-aged: today he is old.’Read more at location 385 •
So, the question of who was the first person, and when they lived, doesn’t have a precise answer. It’s kind of fuzzy, like the answer to the question: When did you stop being a baby and become a toddler? At some point, probably less than a million years ago but more than a hundred thousand years ago, our ancestors were sufficiently different from us that a modern person wouldn’t have been able to breed with them if they had met.Read more at location 408 •
Next time you see an animal – any animal – or any plant, look at it and say to yourself: what I am looking at is an elaborate machine for passing on the genes that made it. I’m looking at a survival machine for genes. Next time you look in the mirror, just think: that is what you are too.Read more at location 812 •
armed with science, we can at least ask sensible, meaningful questions about it and recognize credible answers when we find them. We don’t have to invent wildly implausible stories: we have the joy and excitement of real scientific investigation and discovery to keep our imaginations in line. And in the end that is more exciting than fantasy.Read more at location 2229 •
Bad things happen because things happen. Whether they are bad or good from our point of view doesn’t influence how likely it is that they will happen. Some people find it hard to accept this. They’d prefer to think that sinners get their come-uppance, that virtue is rewarded. Unfortunately the universe doesn’t care what people prefer.Read more at location 2562 •
There are things that not even the best scientists of today can explain. But that doesn’t mean we should block off all investigation by resorting to phoney ‘explanations’ invoking magic or the supernatural, which don’t actually explain at all.Read more at location 2909 •
The eminent science-fiction writer Arthur C. Clarke summed the point up as Clarke’s Third Law: Any sufficiently advanced technology is indistinguishable from magic

The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail by Clayton M. Christensen

noreply@blogger.com (Jim) — Mon, 25 Jun 2012 06:57:00 +0000

An interesting book, not just because it uses the HDD industry as a case study to analyse why only certain firms succeed at each technology change but because it expalins why great companies can't really do both sustaining and disruptive innovation inside the same organisation.

How the internal politics of good companies means that they are very good a focussing on what their customers want and killing ideas that distract from that goal. This leads them to an ever upward technology improvement at a rate faster than the bulk of the market needs. In turn this creates space below them for entrants with often simpler, cheaper technology that actually performs worse in eth established measures of performance but creates a new market segment that will eventually surpass teh original one.

It ends with a look at the electric vehicle market and prodicts that existing car firms will fail to promote the technology but a new start-up or a spin-off just might succeed.

Resource dependence: Customers effectively control the patterns of resource allocation in well-run companies. Small markets don’t solve the growth needs of large companies. The ultimate uses or applications for disruptive technologies are unknowable in advance. Failure is an intrinsic step toward success. Organizations have capabilities that exist independently of the capabilities of the people who work within them. Organizations’ capabilities reside in their processes and their values—and the very processes and values that constitute their core capabilities within the current business model also define their disabilities when confronted with disruption. Technology supply may not equal market demand. The attributes that make disruptive technologies unattractive in established markets often are the very ones that constitute their greatest value in emerging markets.Read more at location 2062 •
They placed projects to develop disruptive technologies in organizations small enough to get excited about small opportunities and small wins.Read more at location 2074 •
those who made the day-to-day resource allocation decisions in the company never saw the sense in investing the necessary money, time, and energy in low-margin products that their customers didn’t want. Higher-performance initiatives that promised up-scale margins, such as DEC’s super-fast Alpha microprocessor and its adventure into mainframe computers, captured the resources instead.Read more at location 2259 •
DEC was forced to straddle the two different cost structures intrinsic to two different value networks. It simply couldn’t hack away enough overhead cost to be competitive in low-end personal computers because it needed those costs to remain competitive in its higher-performance products.Read more at location 2263 •

It seems to be very difficult to manage the peaceful, unambiguous coexistence of two cost structures, and two models for how to make money, within a single company.Read more at location 2271 •
Managers who confront disruptive technological change must be leaders, not followers, in commercializing disruptive technologies. Doing so requires implanting the projects that are to develop such technologies in commercial organizations that match in size the market they are to address.Read more at location 2446 •
The evidence from the disk drive industry shows that creating new markets is significantly less risky and more rewarding than entering established markets against entrenched competition. But as companies become larger and more successful, it becomes even more difficult to enter emerging markets early enough.Read more at location 2451 •
It is, indeed, an innovator’s dilemma. Firms that sought growth by entering small, emerging markets logged twenty times the revenues of the firms pursuing growth in larger markets.Read more at location 2543 •
The firms on the left side seem to have made a sour bargain. They exchanged a market risk, the risk that an emerging market for the disruptive technology might not develop after all, for a competitive risk, the risk of entering markets against entrenched competition.Read more at location 2546 •
This problem is particularly vexing for big companies confronting disruptive technologies. Disruptive technologies facilitate the emergence of new markets, and there are no $800 million emerging markets. But it is precisely when emerging markets are small—when they are least attractive to large companies in search of big chunks of new revenue—that entry into them is so critical.Read more at location 2573 •
Because emerging markets are small by definition, the organizations competing in them must be able to become profitable at small scale. This is crucial because organizations or projects that are perceived as being profitable and successful can continue to attract financial and human resources both from their corporate parents and from capital markets. Initiatives perceived as failures have a difficult time attracting either.Read more at location 2625 •
Every innovation is difficult. That difficulty is compounded immeasurably, however, when a project is embedded in an organization in which most people are continually questioning why the project is being done at all. Projects make sense to people if they address the needs of important customers, if they positively impact the organization’s needs for profit and growth, and if participating in the project enhances the career opportunities of talented employees. When a project doesn’t have these characteristics, its manager spends much time and energy justifying why it merits resources and cannot manage the project as effectively. Frequently in such circumstances, the best people do not want to be associated with the project—and when things get tight, projects viewed as nonessential are the first to be canceled or postponed.Read more at location 2667 •
The reaction of some managers to the difficulty of correctly planning the markets for disruptive technologies is to work harder and plan smarter. While this approach works for sustaining innovations, it denies the evidence about the nature of disruptive ones. Amid all the uncertainty surrounding disruptive technologies, managers can always count on one anchor: Experts’ forecasts will always be wrong. It is simply impossible to predict with any useful degree of precision how disruptive products will be used or how large their markets will be. An important corollary is that, because markets for disruptive technologies are unpredictable, companies’ initial strategies for entering these markets will generally be wrong.Read more at location 3030 •
Rightly or wrongly, individual managers in most organizations believe that they cannot fail: If they champion a project that fails because the initial marketing plan was wrong, it will constitute a blotch on their track record, blocking their rise through the organization. Because failure is intrinsic to the process of finding new markets for disruptive technologies, the inability or unwillingness of individual managers to put their careers at risk acts as a powerful deterrent to the movement of established firms into the value networks created by those technologies.Read more at location 3058 •
opportunity. The notion that organizations have “core competencies” has been a popular one for much of the last decade. 1 In practice, however, most managers have found that the concept is sufficiently vague that some supposed “competence” can be cited in support of a bewildering variety of innovation proposals.Read more at location 3158 •
an opportunity that excites a small organization isn’t big enough to be interesting to a very large one. One of the bittersweet rewards of success is, in fact, that as companies become large, they literally lose the capability to enter small emerging markets. This disability is not because of a change in the resources within the companies—their resources typically are vast. Rather, it is because their values change.Read more at location 3237 •
Despite beliefs spawned by popular change-management and reengineering programs, processes are not nearly as flexible or “trainable” as are resources—and values are even less so. The processes that make an organization good at outsourcing components cannot simultaneously make it good at developing and manufacturing components in-house. Values that focus an organization’s priorities on high-margin products cannot simultaneously focus priorities on low-margin products. This is why focused organizations perform so much better than unfocused ones: their processes and values are matched carefully with the set of tasks that need to be done.Read more at location 3344 •
Generally, once the performance level demanded of a particular attribute has been achieved, customers indicate their satiation by being less willing to pay a premium price for continued improvement in that attribute. Hence, performance oversupply triggers a shift in the basis of competition, and the criteria used by customers to choose one product over another changes to attributes for which market demands are not yet satisfied.Read more at location 3610 •
In the instances studied in this book, established firms confronted with disruptive technology typically viewed their primary development challenge as a technological one: to improve the disruptive technology enough that it suits known markets. In contrast, the firms that were most successful in commercializing a disruptive technology were those framing their primary development challenge as a marketing one: to build or find a market where product competition occurred along dimensions that favored the disruptive attributes of the product.Read more at location 3688 •
say. Watching how customers actually use a product provides much more reliable information than can be gleaned from a verbal interview or a focus group.Read more at location 3919 •
I would be careful to keep asking the right question: Will the trajectory of electric vehicle performance ever intersect the trajectory of market demands (as revealed in the way customers use cars)? Industry experts may contend that electric vehicles will never perform as well as gasoline-powered cars, in effect comparing the trajectories of the two technologies. They are probably correct. But, recalling the experience of their counterparts in the disk drive industry, they will have the right answer to the wrong question.Read more at location 3954 •
I would direct my marketers to focus on uncovering somewhere a group of buyers who have an undiscovered need for a vehicle that accelerates relatively slowly and can’t be driven farther than 100 miles!Read more at location 3982 •
I must therefore plan to be wrong and to learn what is right as fast as possible. 9 I cannot spend all of my resources or all of my organizational credibility on an all-or-nothing first-time bet,Read more at location 3994 •
dependence work for us rather than against us, but it would also address the principle that small markets cannot solve the growth or profit problems of large companies. For many years into the future, the market for electric vehicles will be so small that this business is unlikely to contribute significantly to the top or bottom lines of a major automaker’s income statement. Thus, since senior managers at these companies cannot be expected to focus either their priority attention or their priority resources on electric vehicles, the most talented managers and engineers would be unlikely to want to be associated with our project, which must inevitably be seen as a financially insignificant effort: To secure their own futures within the company, they naturally will want to work on mainstream programs, not peripheral ones.Read more at location 4138 •
If, on the other hand, my program is viewed by key people as nonessential to the organization’s growth and profitability, or even worse, is viewed as an idea that might erode profits, then even if the technology is simple, the project will fail.Read more at location 4152 •
We have learned in this book that in their straightforward search for profit and growth, some very capable executives in some extraordinarily successful companies, using the best managerial techniques, have led their firms toward failure. Yet companies must not throw out the capabilities, organizational structures, and decision-making processes that have made them successful in their mainstream markets just because they don’t work in the face of disruptive technological change. The vast majority of the innovation challenges they will face are sustaining in character, and these are just the sorts of innovations that these capabilities are designed to tackle.Read more at location 4265 •
I have found that many of life’s most useful insights are often quite simple. In retrospect, many of the findings of this book fit that mold: Initially they seemed somewhat counterintuitive, but as I came to understand them, the insights were revealed as simple and sensible. I review them here, in the hope that they will prove useful to those readers who may be wrestling with the innovator’s dilemmas.Read more at location 4271 •
First, the pace of progress that markets demand or can absorb may be different from the progress offered by technology. This means that products that do not appear to be useful to our customers today (that is, disruptive technologies) may squarely address their needs tomorrow.Read more at location 4275 •
Second, managing innovation mirrors the resource allocation process: Innovation proposals that get the funding and manpower they require may succeed; those given lower priority, whether formally or de facto, will starve for lack of resources and have little chance of success.Read more at location 4280 •
Third, just as there is a resource allocation side to every innovation problem, matching the market to the technology is another.Read more at location 4287 •
Disruptive technology should be framed as a marketing challenge, not a technological one.Read more at location 4293 •
Fourth, the capabilities of most organizations are far more specialized and context-specific than most managers are inclined to believe.Read more at location 4294 •
Fifth, in many instances, the information required to make large and decisive investments in the face of disruptive technology simply does not exist. It needs to be created through fast, inexpensive, and flexible forays into the market and the product.Read more at location 4304 •
Although the mortality rate for ideas about disruptive technologies is high, the overall business of creating new markets for disruptive technologies need not be inordinately risky. Managers who don’t bet the farm on their first idea, who leave room to try, fail, learn quickly, and try again, can succeed at developing the understanding of customers, markets, and technology needed to commercialize disruptive innovations.Read more at location 4310 •
Sixth, it is not wise to adopt a blanket technology strategy to be always a leader or always a follower. Companies need to take distinctly different postures depending on whether they are addressing a disruptive or a sustaining technology. Disruptive innovations entail significant first-mover advantages: Leadership is important. Sustaining situations, however, very often do not.Read more at location 4313 •
Seventh, and last, the research summarized in this book suggests that there are powerful barriers to entry and mobilityRead more at location 4318 •
Perhaps the most powerful protection that small entrant firms enjoy as they build the emerging markets for disruptive technologies is that they are doing something that it simply does not make sense for the established leaders to do.Read more at location 4321 •
Because disruptive technologies rarely make sense during the years when investing in them is most important, conventional managerial wisdom at established firms constitutes an entry and mobility barrier that entrepreneurs and investors can bank on. It is powerful and pervasive.Read more at location 4325 •
The summary and questions in this guide are designed to stimulate thinking and discussion about The Innovator’s Dilemma, how its findings are manifest in many industries today, and the implications of those findings for the future

Are You Smart Enough to Work at Google? by William Poundstone

noreply@blogger.com (Jim) — Mon, 28 May 2012 06:46:00 +0000

A insight into how the world of interviews and selection is changing. For companies like Google, so many people want to work there that they can make it really tough, just to get an interview with candidates self-selecting though a series of internet challenges.

The book includes examples of the brain teasers used in some modern interviews. Read it and discover if you could ever get a job again.

Equally covert is the most ubiquitous personality measure, the “airport test.” After meeting with the applicant, the interviewers have a postmortem on his or her general likability. As Larry Page explained it, “Just think about if you got stuck in an airport with this [job candidate], on a long layover on a business trip. Would you be happy or sad about it?” They want to hire people who are fun to be around.Read more at location 842 •
Four questions traditionally posed in job interviews at the consulting firm Accenture:
1. How do you put a giraffe in a refrigerator? The correct answer: Open the refrigerator, put in the giraffe, and close the door.
2. How do you put an elephant in a refrigerator? The correct answer: Open the refrigerator, take out the giraffe, put in the elephant, and close the door. This question tests your ability to recognize the consequences of your actions.
3. The Lion King is holding an animal conference. All the animals attend except one. Which one? The correct answer: The elephant. You put him in the refrigerator. This question tests your memory. You’ve now got one final chance to prove yourself.
4. You have to cross a river in crocodile country and don’t have a boat. How do you get across? The correct answer: You swim. The crocodiles are all attending the animal conference. This tests how well you learn from your mistakes

The Social Organization: How to Use Social Media to Tap the Collective Genius of Your Customers and Employees by Anthony J. Bradley

noreply@blogger.com (Jim) — Mon, 28 May 2012 06:41:00 +0000

A guidebook for principles of embedding self-sustaining collaboration within organisations. Primary message is have a good reason to create each social community, make sure it's aligned with teh business, nurture it and then let go.

One of our more striking discoveries is that most social media initiatives fail. Either they don’t attract any interest or they never create business value.Read more at location 145
“Operationally, we work as individual countries and regions or markets. The challenge is to get everyone involved regardless of location, job, or language. SHIFT enables us to develop initiatives at incredible speed by taking the structure of the company—and a person’s place in the organization—out of the discussion, so that we can all work together and move faster. SHIFT creates a truly global organization.” Based on the success he’d seen, he said, “With SHIFT, I know that we can mobilize the company faster and more effectively.”10Read more at location 219
Think of the three components this way: Community is the people who collaborate. Social media is where they collaborate. And purpose is why they collaborate. Social media plus community plus purpose create mass collaboration. And extensive, repeated success with mass collaboration in collaborative communities characterizes a social organization. Simple. But, like much else in organizations, this simple idea can be hard to execute well.Read more at location 289
Mass collaboration is defined by six fundamental principles or defining characteristics. Participation, collective, transparency, independence, persistence, and emergence, in combination, set it apart from other forms of communication and collaboration. A social media implementation that doesn’t display all these principles won’t enable mass collaboration.Read more at location 299
What if CEMEX management had taken the more traditional approach of (1) assembling a team to go out and audit all plants to identify the practices of the best ones and then (2) directing other plants to adopt those practices? It would have taken much longer, achieved a lower-quality assessment, and faced huge adoption challenges. Most likely, dozens of plants would have dragged their feet or claimed, “We can’t do that here.” In the end, management said the engineers had accomplished in six weeks using mass collaboration what would normally have taken two years.Read more at location 390 •
this requires a new and different mind-set. The people in a social organization no longer think entirely in terms of hierarchy and traditional management. They don’t automatically respond to a challenge by assigning its resolution to some person or group or by creating a structured process to deal with it. Because they’ve integrated community collaboration into the way they work and think every day, they ask instead: “Can a community do it better? Can we form a community to deal more effectively with this?” If the answer is yes, it takes that approach.Read more at location 453 •

Choosing community collaboration over traditional approaches will challenge the organization and individual managers within it. Companies that prefer to operate via prescribed processes, are obsessed with defining roles and responsibilities in great detail, and place great store in formal hierarchy will struggle to become social organizations. Managers who consider formal authority the primary tool at their disposal for influencing others will wrestle individually with their roles and functions in managing a community. And all managers will need to reconcile the tension between their continuing responsibility for outcomes with their inability to mandate or control what a collaborative community will produce.Read more at location 476 •
From all the cases we’ve studied, we can identify a few common reasons for failure: Social media initiatives fail most frequently because organizations focus on the technologies when they should focus instead on achieving a purpose through the new collective behaviors that those technologies make possible. New behaviors aimed at purpose, not technology, provide business value. Social media technology is a crucial component, but it’s an enabler with little or no value by itself. Its worth arises from what it allows. They fail because the organization lacks knowledge of the fundamental principles of mass collaboration. Not even great technology will save those efforts that ignore or omit the basic characteristics of successful social initiatives. They fail because not all challenges are well suited to mass collaboration. Organizations need to understand where collective communities are most likely to provide real value. Using mass collaboration in settings where it’s not appropriate wastes people’s time and the firm’s money and can even expose organizations to the possibility of mismanaging important information. Finally, they fail because the organization’s executives and managers lack the confidence to assign compelling purposes to communities and then allow the communities to find a way to fulfill their purposes. Managers stifle innovation with interference and excessive oversight, and, when the community does innovate, they lack ways to turn those ideas into organizational change.Read more at location 518 •
The term guide refers to the role of those managers who sponsor a community and are responsible for its results. In a real sense, the preparation that preceded this step was largely about “planning to let go.” Once the initiative has been launched and a community forms, it will take on a life of its own and, in large part, become the master of its own destiny. At this point, control will shift from the organization to the community and those in charge until now will move to a role of guiding rather than directing or controlling. Think of it as “managing by guiding from the middle.” It’s a difficult shift for some managers to make.Read more at location 646 •
Your aim in this meeting is, first, to identify those goals where collaboration is appropriate and, second, to articulate at high levels how community collaboration can foster progress toward achieving them. In addition to goals, you can use major business activities and known significant collaboration challenges to spur brainstorming.Read more at location 896 •
specific enough to motivate an identifiable target audience to participate. It also clearly articulates the benefits to community members and the business value to the organization. No longer than a paragraph, it answers four basic questions: Who are the target participants? What is the nature or focus of their collaboration? What’s in it for participants? What value will the organization realize?Read more at location 1024 •
viable community you need at minimum thirty to fifty active participants.Read more at location 2008 •
This places two requirements on managers: (1) that they allow control to rest in the hands of the community itself; and (2) that they create a supportive organizational framework within which the community can form and do its work.Read more at location 2100 •
communities with essentially the same purposes that compete for resources and members. Putting ideas for spin-offs through the No, Go, Grow process can help avoid this kind of overlap and confusion. Also, avoid spin-offs that pursue the same purpose as the original community and are different only because they focus on a particular business unit, geographic region, or some other distinguishing factor besides purpose. Repeating the same purpose in a different part of the organization can easily create community silos and artificial distinctions that diminish the power of mass collaboration.Read more at location 2443 •
In addition, after some experience with the community, Loyola moved student discussion boards off the university site and onto Facebook. “We adopted the principle that we needed to be where the students are, not make the students go where we wanted them to go.” said Roberts.Read more at location 2570 •
its ability to function more or less independently creates the potential for competition with traditional corporate functions. Consider a community whose purpose is to find ways to improve the workplace. The potential for conflict with HR is obvious. While such a community may include HR personnel, it is not led by HR in the same way that a task force on working conditions would be. Such tension can lead corporate functions to dismiss communities or actively oppose them.Read more at location 2608 •
Time taken by people involved is another cost factor finance uses to assess social media–based collaboration. They tend to see time spent collaborating as time away from work or as an additional burden. Point out where collaborating is or should be a normal part of community members’ jobs already. In fact, collaborative communities are almost always a more effective and efficient way of doing what must be done to carry out current plans and meet current budgets. Communities often don’t create new work. Instead, they provide a new and better way of doing the regular work that has to be done or provide a way to achieve valued objectives. When Gilberto Garcia, the sponsor of global collaboration on CEMEX SHIFT, was asked about the time people spent, he simply said, “Successful people collaborate. It’s already part of their job. The rest need to collaborate in order to learn how to do their job better.”3 AcknowledgeRead more at location 2699 •
the now-common practice of provide-and-pray, in which organizations simply make social technologies available with the expectation that good things will happen spontaneously. They won’t in almost all cases unless you start by understanding and embracing four fundamental success factors:Read more at location 2954 •
It’s about the masses: Enabling mass collaboration is what makes social media unique and transformational. Mass collaboration requires the combination of three components: social media, community, and purpose. It’s more than a technology.Read more at location 2957 •
Make the purpose matter: Mass collaboration rarely happens by itself. That’s why simply providing the technology almostRead more at location 2959 •
always fails. Technology doesn’t attract participants—and without participation and contribution, there’s no community. If a community does form by chance, it rarely does anything useful for the sponsoring organization. You must actively nurture mass collaboration around a compelling purpose that is both meaningful to the participants and produces value for the enterprise.Read more at location 2960 •
Adhere to the six principles: A group that collaborates, no matter how large the group, doesn’t necessarily equal mass collaboration. To be truly collaborative, a community must possess six defining characteristics or principles: participation, collective, transparency, independence, persistence, and emergence. Take away any one of them and the activity is no longer mass collaboration.Read more at location 2963 •
Repeat and embed in your organization: Mass collaboration should not be treated as another organizational tool but made a core competence that’s woven into the fabric—processes, culture, systems, and practices—of your firm. The goal is to become a social organization so that, when facing any problem or opportunity, you and your colleagues throughout the firm always ask, “Would a community be a better way to deal with this?” If the answer is yes, you’re able to use mass collaboration to tap into the knowledge, experience, creativity, and passion of all those involved.Read more at location 2967 •
Move the corporate culture to one where it is commonly understood that every employee’s value to the company is much more than what they know. It’s what they share.Read more at location 3131 •
What happens when your competitor successfully turns its customer base into an extension of its sales staff? It could, in effect, turn your potential customers into your competitors. Social media has revived and energized theRead more at location 3267 •
Will you be a social organization? Or will you be competing against social organizations? In the next ten years, your ability to evolve into a social organization may determine if you thrive, survive, or disappear

Thinking, Fast and Slow by Daniel Kahneman

noreply@blogger.com (Jim) — Mon, 16 Apr 2012 13:10:00 +0000

The book delves into the difference between our rational 'conscious' self that we like to think is 'in charge' but that in fact, is asleep and lazy most of the time and hands over control to our gut instinct. This works very well on most occasions but the book shows how situations can trick us into making the wrong decision.
We don't notice the problem because we have evolved to reconstruct reality (after it happens) to fit in with what our gut instinct has already decided.
Makes you think is there really very much free will at all?
The book also looks at how our brains are really poor at dealing with randomness - seeing patterns and assigning causes where there are none.
It contains ideas on how to improve the recruitment process and remove the biases that we all bring.
How planning and budgets are usually pretty pointless and how to avoid senior executives making risky bets that break the company without anyone realising what they are agreeing to (it need only take 30 minutes of effort)
And finally once again, the book covers the topic of how the presentation format of the statistics (rather than the facts themselves) can dramatically affect peoples' choices.

This is the essence of intuitive heuristics: when faced with a difficult question, we often answer an easier one instead, usually without noticing the substitution.Read more at location 269

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The often-used phrase “pay attention” is apt: you dispose of a limited budget of attention that you can allocate to activities, and if you try to go beyond your budget, you will fail.Read more at location 395

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The gorilla study illustrates two important facts about our minds: we can be blind to the obvious, and we are also blind to our blindness.Read more at location 413

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One further limitation of System 1 is that it cannot be turned off. If you are shown a word on the screen in a language you know, you will read it—unless your attention is totally focused elsewhere.Read more at location 434

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The best we can do is a compromise: learn to recognize situations in which mistakes are likely and try harder to avoid significant mistakes when the stakes are high. The premise of this book is that it is easier to recognize other people’s mistakes than our own.Read more at location 487

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System 1 has more influence on behavior when System 2 is busy, and it has a sweet tooth.Read more at location 709

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The notion that we have limited access to the workings of our minds is difficult to accept because, naturally, it is alien to our experience, but it is true: you know far less about yourself than you feel you do.Read more at location 925

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College students were asked to rate the humor of cartoons from Gary Larson’s The Far Side while holding a pencil in their mouth. Those who were “smiling” (without any awareness of doing so) found the cartoons funnier than did those who were “frowning.”Read more at location 964

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The general theme of these findings is that the idea of money primes individualism: a reluctance to be involved with others, to depend on others, or to accept demands from others. The psychologist who has done this remarkable research, Kathleen Vohs, has been laudably restrained in discussing the implications of her findings, leaving the task to her readers. Her experiments are profound—her findings suggest that living in a culture that surrounds us with reminders of money may shape our behavior and our attitudes in ways that we do not know about and of which we may not be proud.Read more at location 995

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On average, the users of the kitchen contributed almost three times as much in “eye weeks” as they did in “flower weeks.” Evidently, a purely symbolic reminder of being watched prodded people into improved behavior.Read more at location 1032

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Anything that makes it easier for the associative machine to run smoothly will also bias beliefs. A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth. Authoritarian institutions and marketers have always known this fact.Read more at location 1109

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“How many animals of each kind did Moses take into the ark?” The number of people who detect what is wrong with this question is so small that it has been dubbed the “Moses illusion.”Read more at location 1326

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The moral is significant: when System 2 is otherwise engaged, we will believe almost anything. System 1 is gullible and biased to believe, System 2 is in charge of doubting and unbelieving, but System 2 is sometimes busy, and often lazy. Indeed, there is evidence that people are more likely to be influenced by empty persuasive messages, such as commercials, when they are tired and depleted.Read more at location 1460

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The normal state of your mind is that you have intuitive feelings and opinions about almost everything that comes your way. You like or dislike people long before you know much about them; you trust or distrust strangers without knowing why; you feel that an enterprise is bound to succeed without analyzing it.Read more at location 1755

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generates impressions, feelings, and inclinations; when endorsed by System 2 these become beliefs, attitudes, and intentions operates automatically and quickly, with little or no eff ort, and no sense of voluntary control can be programmed by System 2 to mobilize attention when a partic ular pattern is detected (search) executes skilled responses and generates skilled intuitions, aft er ade quate training creates a coherent pattern of activated ideas in associative memory links a sense of cognitive ease to illusions of truth, pleasant feelings, and reduced vigilance distinguishes the surprising from the normal infers and invents causes and intentions neglects ambiguity and suppresses doubt is biased to believe and confirm exaggerates emotional consistency (halo effect) focuses on existing evidence and ignores absent evidence (WYSIATI) generates a limited set of basic assessments represents sets by norms and prototypes, does not integrate matches intensities across scales (e.g., size to loudness) computes more than intended (mental shotgun) sometimes substitutes an easier question for a difficult one (heuristics) is more sensitive to changes than to states (prospect theory)* overweights low probabilities* shows diminishing sensitivity to quantity (psychophysics)* responds more strongly to losses than to gains (loss aversion)* frames decision problems narrowly, in isolation from one anotherRead more at location 1887

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We started from a fact that calls for a cause: the incidence of kidney cancer varies widely across counties and the differences are systematic. The explanation I offered is statistical: extreme outcomes (both high and low) are more likely to be found in small than in large samples. This explanation is not causal. The small population of a county neither causes nor prevents cancer; it merely allows the incidence of cancer to be much higher (or much lower) than it is in the larger population. The deeper truth is that there is nothing to explain.Read more at location 1946

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The risk of error can be estimated for any given sample size by a fairly simple procedure. Traditionally, however, psychologists do not use calculations to decide on a sample size. They use their judgment, which is commonly flawed.Read more at location 1979

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System 1 understands sentences by trying to make them true, and the selective activation of compatible thoughts produces a family of systematic errors that make us gullible and prone to believe too strongly whatever we believe.Read more at location 2178

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“Plans are best-case scenarios. Let’s avoid anchoring on plans when we forecast actual outcomes. Thinking about ways the plan could go wrongRead more at location 2294

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You will occasionally do more than your share, but it is useful to know that you are likely to have that feeling even when each member of the team feels the same way.Read more at location 2352

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The contest yielded a clear-cut winner: people who had just listed twelve instances rated themselves as less assertive than people who had listed only six. Furthermore, participants who had been asked to list twelve cases in which they had not behaved assertively ended up thinking of themselves as quite assertive! If you cannot easily come up with instances of meek behavior, you are likely to conclude that you are not meek at all. Self-ratings were dominated by the ease with which examples had come to mind. The experience of fluent retrieval of instances trumped the number retrieved.Read more at location 2368

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Psychologists enjoy experiments that yield paradoxical results, and they have applied Schwarz’s discovery with gusto. For example, people: believe that they use their bicycles less often after recalling many rather than few instances are less confident in a choice when they are asked to produce more arguments to support it are less confident that an event was avoidable after listing more ways it could have been avoided are less impressed by a car after listing many of its advantagesRead more at location 2379

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A professor at UCLA found an ingenious way to exploit the availability bias. He asked different groups of students to list ways to improve the course, and he varied the required number of improvements. As expected, the students who listed more ways to improve the class rated it higher!Read more at location 2385

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Here’s a sample of their findings: Strokes cause almost twice as many deaths as all accidents combined, but 80% of respondents judged accidental death to be more likely. Tornadoes were seen as more frequent killers than asthma, although the latter cause 20 times more deaths. Death by lightning was judged less likely than death from botulism even though it is 52 times more frequent. Death by disease is 18 times as likely as accidental death, but the two were judged about equally likely. Death by accidents was judged to be more than 300 times more likely than death by diabetes, but the true ratio is 1:4. The lesson is clear: estimates of causes of death are warped by media coverage.Read more at location 2463

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Statistical results with a causal interpretation have a stronger effect on our thinking than noncausal information. But even compelling causal statistics will not change long-held beliefs or beliefs rooted in personal experience. On the other hand, surprising individual cases have a powerful impact and are a more effective tool for teaching psychology because the incongruity must be resolved and embedded in a causal story. That is why this book contains questions that are addressed personally to the reader. You are more likely to learn something by finding surprises in your own behavior than by hearing surprising facts about people in general.Read more at location 3165

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Having read this chapter, you know that the obvious solution of adding 10% to the sales of each store is wrong. You want your forecasts to be regressive, which requires adding more than 10% to the low-performing branches and adding less (or even subtracting) to others. But if you ask other people, you are likely to encounter puzzlement: Why do you bother them with an obvious question? As Galton painfully discovered, the concept of regression is far from obvious.Read more at location 3359

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Extreme predictions and a willingness to predict rare events from weak evidence are both manifestations of System 1. It is natural for the associative machinery to match the extremeness of predictions to the perceived extremeness of evidence on which it is based—this is how substitution works. And it is natural for System 1 to generate overconfident judgments, because confidence, as we have seen, is determined by the coherence of the best story you can tell from the evidence at hand. Be warned: your intuitions will deliver predictions that are too extreme and you will be inclined to put far too much faith in them.Read more at location 3555

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Of course there was a great deal of skill in the Google story, but luck played a more important role in the actual event than it does in the telling of it. And the more luck was involved, the less there is to be learned.Read more at location 3614

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You cannot help dealing with the limited information you have as if it were all there is to know. You build the best possible story from the information available to you, and if it is a good story, you believe it. Paradoxically, it is easier to construct a coherent story when you know little, when there are fewer pieces to fit into the puzzle. Our comforting conviction that the world makes sense rests on a secure foundation: our almost unlimited ability to ignore our ignorance.Read more at location 3616

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A general limitation of the human mind is its imperfect ability to reconstruct past states of knowledge, or beliefs that have changed. Once you adopt a new view of the world (or of any part of it), you immediately lose much of your ability to recall what you used to believe before your mind changed.Read more at location 3639

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On average, the gap in corporate profitability and stock returns between the outstanding firms and the less successful firms studied in Built to Last shrank to almost nothing in the period following the study. The average profitability of the companies identified in the famous In Search of Excellence dropped sharply as well within a short time. A study of Fortune’s “Most Admired Companies” finds that over a twenty-year period, the firms with the worst ratings went on to earn much higher stock returns than the most admired firms.Read more at location 3740

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It is wise to take admissions of uncertainty seriously, but declarations of high confidence mainly tell you that an individual has constructed a coherent story in his mind, not necessarily that the story is true.Read more at location 3824

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In a paper titled “Trading Is Hazardous to Your Wealth,” they showed that, on average, the most active traders had the poorest results, while the investors who traded the least earned the highest returns. In another paper, titled “Boys Will Be Boys,” they showed that men acted on their useless ideas significantly more often than women, and that as a result women achieved better investment results than men.Read more at location 3855

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Finally, the illusions of validity and skill are supported by a powerful professional culture. We know that people can maintain an unshakable faith in any proposition, however absurd, when they are sustained by a community of like-minded believers. Given the professional culture of the financial community, it is not surprising that large numbers of individuals in that world believe themselves to be among the chosen few who can do what they believe others cannot.Read more at location 3926

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It is hard to think of the history of the twentieth century, including its large social movements, without bringing in the role of Hitler, Stalin, and Mao Zedong. But there was a moment in time, just before an egg was fertilized, when there was a fifty-fifty chance that the embryo that became Hitler could have been a female. Compounding the three events, there was a probability of one-eighth of a twentieth century without any of the three great villains and it is impossible to argue that history would have been roughly the same in their absence. The fertilization of these three eggs had momentous consequences, and it makes a joke of the idea that long-term developments are predictable.Read more at location 3938

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because they are not affected by accidents of sampling. The surprising success of equal-weighting schemes has an important practical implication: it is possible to develop useful algorithms without any prior statistical research. Simple equally weighted formulas based on existing statistics or on common sense are often very good predictors of significant outcomes. In a memorable example, Dawes showed that marital stability is well predicted by a formula: frequency of lovemaking minus frequency of quarrels You don’t want your result to be a negative number.Read more at location 4083

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room. Atul Gawande’s recent A Checklist Manifesto provides many other examples of the virtues of checklists and simple rules.Read more at location 4105

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Suppose that you need to hire a sales representative for your firm. If you are serious about hiring the best possible person for the job, this is what youRead more at location 4205

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should do. First, select a few traits that are prerequisites for success in this position (technical proficiency, engaging personality, reliability, and so on). Don’t overdo it—six dimensions is a good number. The traits you choose should be as independent as possible from each other, and you should feel that you can assess them reliably by asking a few factual questions. Next, make a list of those questions for each trait and think about how you will score it, say on a 1–5 scale. You should have an idea of what you will call “very weak” or “very strong.” These preparations should take you half an hour or so, a small investment that can make a significant difference in the quality of the people you hire. To avoid halo effects, you must collect the information on one trait at a time, scoring each before you move on to the next one. Do not skip around. To evaluate each candidate, add up the six scores. Because you are in charge of the final decision, you should not do a “close your eyes.” Firmly resolve that you will hire the candidate whose final score is the highest, even if there is another one whom you like better—try to resist your wish to invent broken legs to change the ranking. A vast amount of research offers a promise: you are much more likely to find the best candidate if you use this procedure than if you do what people normally do in such situations, which is to go into the interview unprepared and to make choices by an overall intuitive judgment such as “I looked into his eyes and liked what I saw.”Read more at location 4206

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Claims for correct intuitions in an unpredictable situation are self-delusional at best, sometimes worse. In the absence of valid cues, intuitive “hits” are due either to luck or to lies. If you find this conclusion surprising, you still have a lingering belief that intuition is magic. Remember this rule: intuition cannot be trusted in the absence of stable regularities in the environment.Read more at location 4363

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Errors in the initial budget are not always innocent. The authors of unrealistic plans are often driven by the desire to get the plan approved—whether by their superiors or by a client—supported by the knowledge that projects are rarely abandoned unfinished merely because of overruns in costs or completion times. In such cases, the greatest responsibility for avoiding the planning fallacy lies with the decision makers who approve the plan. If they do not recognize the need for an outside view, they commit a planning fallacy.Read more at location 4546

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When forecasting the outcomes of risky projects, executives too easily fall victim to the planning fallacy. In its grip, they make decisions based on delusional optimism rather than on a rational weighting of gains, losses, and probabilities. They overestimate benefits and underestimate costs. They spin scenarios of success while overlooking the potential for mistakes and miscalculations. As a result, they pursue initiatives that are unlikely to come in on budget or on time or to deliver the expected returns—or even to be completed.Read more at location 4582

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Leaders of large businesses sometimes make huge bets in expensive mergers and acquisitions, acting on the mistaken belief that they can manage the assets of another company better than its current owners do. The stock market commonly responds by downgrading the value of the acquiring firm, because experience has shown that efforts to integrate large firms fail more often than they succeed. The misguided acquisitions have been explained by a “hubris hypothesis”: the executives of the acquiring firm are simply less competent than they think they are.Read more at location 4667

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It is tempting to explain entrepreneurial optimism by wishful thinking, but emotion is only part of the story. Cognitive biases play an important role, notably the System 1 feature WYSIATI. We focus on our goal, anchor on our plan, and neglect relevant base rates, exposing ourselves to the planning fallacy. We focus on what we want to do and can do, neglecting the plans and skills of others. Both in explaining the past and in predicting the future, we focus on the causal role of skill and neglect the role of luck. We are therefore prone to an illusion of control. We focus on what we know and neglect what we do not know, which makes us overly confident in our beliefs.Read more at location 4695

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The procedure is simple: when the organization has almost come to an important decision but has not formally committed itself, Klein proposes gathering for a brief session a group of individuals who are knowledgeable about the decision. The premise of the session is a short speech: “Imagine that we are a year into the future. We implemented the plan as it now exists. The outcome was a disaster. Please take 5 to 10 minutes to write a brief history of that disaster.”Read more at location 4798

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The three principles that govern the value of outcomes are illustrated by figure 10. If prospect theory had a flag, this image would be drawn on it. The graph shows the psychological value of gains and losses, which are the “carriers” of value in prospect theory (unlike Bernoulli’s model, in which states of wealth are the carriers of value). The graph has two distinct parts, to the right and to the left of a neutral reference point. A salient feature is that it is S-shaped, which represents diminishing sensitivity for both gains and losses. Finally, the two curves of the S are not symmetrical. The slope of the function changes abruptly at the reference point: the response to losses is stronger than the response to corresponding gains. This is loss aversion.Read more at location 5087

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The distinctive feature is that both the shoes the merchant sells you and the money you spend from your budget for shoes are held “for exchange.” They are intended to be traded for other goods. Other goods, such as wine and Super Bowl tickets, are held “for use,” to be consumed or otherwise enjoyed. Your leisure time and the standard of living that your income supports are also not intended for sale or exchange.Read more at location 5306

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Probabilities that are extremely low or high (below 1% or above 99%) are a special case. It is difficult to assign a unique decision weight to very rare events, because they are sometimes ignored altogether, effectively assigned a decision weight of zero. On the other hand, when you do not ignore the very rare events, you will certainly overweight them. Most of us spend very little time worrying about nuclear meltdowns or fantasizing about large inheritances from unknown relatives. However, when an unlikely event becomes the focus of attention, we will assign it much more weight than its probability deserves. Furthermore, people are almost completely insensitive to variations of risk among small probabilities. A cancer risk of 0.001% is not easily distinguished from a risk of 0.00001%, although the former would translate to 3,000 cancers for the population of the United States, and the latter to 30.Read more at location 5704

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The thought of accepting the large sure loss is too painful, and the hope of complete relief too enticing, to make the sensible decision that it is time to cut one’s losses. This is where businesses that are losing ground to a superior technology waste their remaining assets in futile attempts to catch up. Because defeat is so difficult to accept, the losing side in wars often fights long past the point at which the victory of the other side is certain, and only a matter of time.Read more at location 5762

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These findings shed new light on the planning fallacy and other manifestations of optimism. The successful execution of a plan is specific and easy to imagine when one tries to forecast the outcome of a project. In contrast, the alternative of failure is diffuse, because there are innumerable ways for things to go wrong. Entrepreneurs and the investors who evaluate their prospects are prone both to overestimate their chances and to overweight their estimates.Read more at location 5885

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The power of format creates opportunities for manipulation, which people with an axe to grind know how to exploit. Slovic and his colleagues cite an article that states that “approximately 1,000 homicides a year are committed nationwide by seriously mentally ill individuals who are not taking their medication.” Another way of expressing the same fact is that “1,000 out of 273,000,000 Americans will die in this manner each year.” Another is that “the annual likelihood of being killed by such an individual is approximately 0.00036%.” Still another: “1,000 Americans will die in this manner each year, or less than one-thirtieth the number who will die of suicide and about one-fourth the number who will die of laryngeal cancer.” Slovic points out that “these advocates are quite open about their motivation: they want to frighten the general public about violence by people with mental disorder, in the hope that this fear will translate into increased funding for mental health services.”Read more at location 5982

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Priceless by William Poundstone

noreply@blogger.com (Jim) — Tue, 13 Mar 2012 13:56:00 +0000

A wonderful book explaining the underlying psychology of price - and hence how to maximise it.
Reveals insights into how easily we are manipulated.
It goes through examples showing that how a bet (or business case) is presented will dramatically change the likelihood of it being accepted.
How anchoring (thinking of a number before you make a decision) has an impact that you would assert it couldn't have and is probably the most important message for those setting prices. Basically start high and discount.

In the mundane act of naming a price, we translate the desires of our hearts into the public language of numbers. That turns out to be a surprisingly tricky process.Read more at location 180

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Car boot sales reveal a truth we might not care to admit in a business deal: prices are made-up numbers that don’t always carry much weightRead more at location 207

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The illusion is so compelling that it makes a great pub bet. To collect, make sure you have some Post-it Notes. Carefully block off the surrounding chessboard squares with Post-it Notes, leaving just the squares containing A and B visible. (You’ll need about six small notes.) Not until you place the last note does it seem even conceivable that the two colours could be the same. Then suddenly, they ‘snap’ to the same medium gray.Read more at location 641

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Amos Tversky and Paul Slovic later generalised this idea into a ‘compatibility principle.’ This rule says that decision makers give the most attention to information that is most compatible with the required answer.Read more at location 1244

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‘People’s intuitions about random sampling appear to satisfy the law of small numbers, which asserts that the law of large numbers applies to small numbers as well.’Read more at location 1435

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As Kevin Spacey says in The Usual Suspects (quoting Baudelaire): ‘The greatest trick the devil ever pulled was convincing man he didn’t exist.’Read more at location 1596

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Our perceptual apparatus is attuned to the evaluation of changes rather than to the evaluation of absolute magnitudes . . . an object at a given temperature may be experienced as hot or cold to the touch depending on the temperature to which one had adapted.Read more at location 1621

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that few want to accept a ‘fair’ bet with X = £100. Few accept X = £110, which offers a nice expected profit. (Those who do accept at this price tend to be gamblers, arbitrageurs, or economists.) The average person requires roughly a £200 prize to balance the prospect of an equally probable £100 loss.Read more at location 1631

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Neither gains nor losses are additive. The pleasure of a £20 windfall is less than twice that of getting £10. This was the moral of S. S. Stevens’s little riddle, where it took about $40 to feel ‘twice as good’ as $10.Read more at location 1634

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Financial advisors tell clients to consider their ‘risk tolerance’ in making money decisions. The trouble is, these four domains of behaviour coexist in all of us. A person who is risk-averse in one situation will become reckless in another. All it takes is a changed reference point.Read more at location 1664

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The public was realistic enough to appreciate that prices sometimes have to go up. It was all right for shops to pass on their own increased costs. It was all right for a company that’s losing money to cut wages. But it wasn’t all right to take advantage of market forces (say, to raise prices on existing stock during a shortage). The cardinal rule of fairness appeared to be Don’t increase your profit at my expense.Read more at location 1747

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Negotiation isn’t a pretty picture. Much of the time, the skillful negotiator is the one who best misrepresents value. It is not ‘fairness’ so much as the appearance of fairness that drives the psychology of prices.Read more at location 1915

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It was like pulling the strings on a marionette. Huber and Puto found they could make the students want one beer or the other, just by adding a third choice that few or no one wanted.Read more at location 2450

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‘This has been a strategy that goes back to the seventeenth century,’ Paco Underhill said recently. ‘You sold one thing to the king, but everyone in court had to have a lesser one. There’s the $500 bag in the window, and what you walk away with is the T-shirt.’Read more at location 2482

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consultants often find themselves in the position of scolding clients for setting their prices too low. ‘Luxury goods prices are not directly linked to any type of costs,’Read more at location 2528

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Thaler deduced that marketers should devote less energy to promoting how absolutely wonderful their product is, and more to breaking it down, feature by feature, or selling several products in one bundle.Read more at location 2715

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One gimmick of property entrepreneurs is to list a property for a short time at a very high price, then cut it to a more reasonable asking price, consistent with the seller’s and agent’s patience. Thereafter the listing can ‘honestly’ mention the original price (REDUCED FROM $X). This tactic adds only a few days to the time the house is on the market, yet it likely gets most of the benefit of the anchor price.Read more at location 3193

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‘Anchoring is not a curiosity,’ Daniel Kahneman said. It ‘works quite well in negotiations, where getting in your number first gives an advantage.’ For bargainers, this simple rule may be the most important and easily applied finding of the psychology of price.Read more at location 3210

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Union leaders wanting to sell a contract to the rank and file—or management wanting to sell a proposal to the union—should think carefully about how they describe the offer. The trick is to present the contract as minimising risk.Read more at location 3601

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Social dominance is a relative thing. The alpha male is the one who has more (females, money, power) than any other male around. Absolute numbers don’t matter so much. When two stags fight over a female, the goal is not a win-win solution. It is to do better than the other male does. Put that in the context of the ultimatum game: It doesn’t help to win 5 pence when a rival gets 95 pence. Better that neither should get anything. This is the perspective that testosterone promotes.Read more at location 3888

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‘Consider the opposite’ is easy to apply. When a dealer, seller, agent, or employer quotes you a figure, take a deep breath, and don’t make any commitments until you’ve had a chance to think of reasons why that price might be unreasonable. Make a game out of it: try to think of as many reasons as possible. Many hard-headed businesspeople dismiss such exercises in positive (negative) thinking. But anchoring is real, and we can use all the help we can get.Read more at location 4195

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Bateson’s group alternated the posters weekly and counted each week’s money to detect any differences in payment behaviour. (They used milk consumption as a check on how much coffee and tea was actually dispensed.) On the average, they found, people contributed 2.76 times as much money when the eyes posters were up, compared to the flowers posters. ‘I was surprised how big the effect was as we were expecting it to be subtle,’ Bateson said. Workplace honesty switched on and off like a lamp.Read more at location 4380

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people in a room with a mirror were less likely to cheat or display gender or race prejudice, more likely to be helpfulRead more at location 4388

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‘When people are made to be self-aware,’ Bodenhausen said, ‘they are likelier to stop and think about what they are doing.’ That in turn can lead to ‘more desirable ways of behaving.’Read more at location 4389

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Over the years, behavioural decision theorists have made an art form of devising clever preference reversals. I will close with one of Hsee’s. You have your choice of two equally fine chocolates. One is small and shaped like a heart. The other is big and shaped like a cockroach. Which do you prefer? Hsee has posed this dilemma to students and friends, finding that most choose the cockroach chocolate. The kicker is that when Hsee asks people which chocolate they would enjoy more, most admit it’s the smaller one, shaped like a heart.Read more at location 4465

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The Drunkard's Walk: How Randomness Rules Our Lives by Leonard Mlodinow

noreply@blogger.com (Jim) — Tue, 28 Feb 2012 13:46:00 +0000

A book on the mathematics of chance and how it plays a much larger role in our lives than many would care to admit.
How regression to the mean explains many strange sporting results.
How our brains are built to want to see patterns and will see them when they are just not there.

As we’ll see, the human mind is built to identify for each event a definite cause and can therefore have a hard time accepting the influence of unrelated or random factors. And so the first step is to realize that success or failure sometimes arises neither from great skill nor from great incompetence but from, as the economist Armen Alchian wrote, “fortuitous circumstances.”Read more at location 150

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the creation of a great novel—or piece of jewelry or chocolate-chip cookie—and the presence of huge stacks of that novel—or jewelry or bags of cookies—at the front of thousands of retail outlets. That’s why successful people in every field are almost universally members of a certain set—the set of people who don’t give up.Read more at location 290

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Such issues are not discussed in corporate boardrooms, in Hollywood, or elsewhere, and so the typical patterns of randomness—apparent hot or cold streaks or the bunching of data into clusters—are routinely misinterpreted and, worse, acted on as if they represented a new trend.Read more at location 350

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When we look at extraordinary accomplishments in sports—or elsewhere—we should keep in mind that extraordinary events can happen without extraordinary causes. Random events often look like nonrandom events, and in interpreting human affairs we must take care not to confuse the two.Read more at location 461

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ing. Psychologists call that type of mistake the availability bias because in reconstructing the past, we give unwarranted importance to memories that are most vivid and hence most available for retrieval.Read more at location 596

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Here’s another crazy game. Suppose the state of California made its citizens the following offer: Of all those who pay the dollar or two to enter, most will receive nothing, one person will receive a fortune, and one person will be put to death in a violent manner. Would anyone enroll in that game? People do, and with enthusiasm. It is called the state lottery. And although the state does not advertise it in the manner in which I have described it, that is the way it works in practice.Read more at location 1405

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He even measured the life spans of sovereigns and clergymen, which, being similar to the life spans of people in other professions, led him to conclude that prayer brought no benefit.Read more at location 2755

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Galton soon realized that processes that did not exhibit regression toward the mean would eventually go out of control.Read more at location 2782

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But as we’re about to see, though in random variation there are orderly patterns, patterns are not always meaningful. And as important as it is to recognize the meaning when it is there, it is equally important not to extract meaning when it is not there. Avoiding the illusion of meaning in random patterns is a difficult task.Read more at location 2884

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For a streaky player, the chance of a success on the heels of a prior success should be higher than his or her overall chance of success. But the authors found that for each player a success following a success was just as likely as a success following a failure (that is, a missed basket).Read more at location 3061

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The psychologist Bruno Bettelheim observed, for instance, that survival in Nazi concentration camps “depended on one’s ability to arrange to preserve some areas of independent action, to keep control of some important aspects of one’s life despite an environment that seemed overwhelming.”Read more at location 3168

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One manifestation of that illusion occurs when an organization experiences a period of improvement or failure and then readily attributes it not to the myriad of circumstances constituting the state of the organization as a whole and to luck but to the person at the top.Read more at location 3217

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When we are in the grasp of an illusion – or, for that matter, whenever we have a new idea – instead of searching for ways to prove our ideas wrong, we usually attempt to prove them correct. Psychologists call this the confirmation bias,Read more at location 3241

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Rather than convincing anyone, the data polarized the group. Thus even random patterns can be interpreted as compelling evidence if they relate to our preconceived notions.Read more at location 3263

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When we look back in detail on the major events of our lives, it is not uncommon to be able to identify such seemingly inconsequential random events that led to big changes.Read more at location 3320

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As a result, although statistical regularities can be found in social data, the future of particular individuals is impossible to predict, and for our particular achievements, our jobs, our friends, our finances, we all owe more to chance than many people realize.Read more at location 3331

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It is easy to concoct stories explaining the past or to become confident about dubious scenarios for the future. That there are traps in such endeavors doesn’t mean we should not undertake them. But we can work to immunize ourselves against our errors of intuition. We can learn to view both explanations and prophecies with skepticism. We can focus on the ability to react to events rather than relying on the ability to predict them, on qualities like flexibility, confidence, courage, and perseverance. And we can place more importance on our direct impressions of people than on their well-trumpeted past accomplishments. In these ways we can resist forming judgments in our automatic deterministic framework.Read more at location 3443

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We miss the effects of randomness in life because when we assess the world, we tend to see what we expect to see. We in effect define degree of talent by degree of success and then reinforce our feelings of causality by noting the correlation. That’s why although there is sometimes little difference in ability between a wildly successful person and one who is not as successful, there is usually a big difference in how they are viewed.Read more at location 3610

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The cord that tethers ability to success is both loose and elastic. It is easy to see fine qualities in successful books or to see unpublished manuscripts, inexpensive vodkas, or people struggling in any field as somehow lacking. It is easy to believe that ideas that worked were good ideas, that plans that succeeded were well designed, and that ideas and plans that did not were ill conceived. And it is easy to make heroes out of the most successful and to glance with disdain at the least. But ability does not guarantee achievement, nor is achievement proportional to ability. And so it is important to always keep in mind the other term in the equation – the role of chance.Read more at location 3685

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What I’ve learned, above all, is to keep marching forward because the best news is that since chance does play a role, one important factor in success is under our control: the number of at bats, the number of chances taken, the number of opportunities seized. For even a coin weighted toward failure will sometimes land on success. Or as the IBM pioneer Thomas Watson said, “If you want to succeed, double your failure rate.”Read more at location 3696

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The Rational Optimist: How Prosperity Evolves by Matt Ridley

noreply@blogger.com (Jim) — Mon, 20 Feb 2012 13:41:00 +0000

I have always been a fan of Matt Ridley's books and this one is no exception.
It covers damming evidence that both government R&D and international aid produce no overall benefit, in fact they actually cause harm by discouraging individuals from supporting themselves.
How arbitrage (trade) is the engine that drives civilisations to innovate and grow, how their governments eventually stifle them (and how the same thing happens to companies are they grow ever larger).

it is a book about the benefits of change. I find that my disagreement is mostly with reactionaries of all political colours: blue ones who dislike cultural change, red ones who dislike economic change and green ones who dislike technological change.Read more at location 159

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years. Today, a car emits less pollution travelling at fullRead more at location 255

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The spread of IQ scores has been shrinking steadily – because the low scores have been catching up with the high ones. This explains the steady, progressive and ubiquitous improvement in the average IQ scores people achieve at a given age – at a rate of 3 per cent per decade. In two Spanish studies, IQ proved to be 9.7 points higher after thirty years, most of it among the least intelligent half of the group.Read more at location 286

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Put it another way, an hour of work today earns you 300 days’ worth of reading light; an hour of work in 1800 earned you ten minutes of reading light.Read more at location 308

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Time: that is the key. Forget dollars, cowrie shells or gold. The true measure of something’s worth is the hours it takes to acquire it. If you have to acquire it for yourself, it usually takes longer than if you get it ready-made by other people. And if you can get it made efficiently by others, then you can afford more of it. As light became cheaper so people used more of it. The average Briton today consumes roughly 40,000 times as much artificial light as he did in 1750. He consumes fifty times as much power and 250 times as much transport (measured in passenger-miles travelled), too. This is what prosperity is: the increase in the amount of goods or services you can earn with the same amount of work.Read more at location 331

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Besides, a million years of natural selection shaped human nature to be ambitious to rear successful children, not to settle for contentment: people are programmed to desire, not to appreciate.Read more at location 412

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That is what, it is now clear, far too many people and businesses did in the 2000s – they borrowed more from posterity than their innovation rate would support. They misallocated the resources to unproductive ends. Most past bursts of human prosperity have come to naught because they allocated too little money to innovation and too much to asset price inflation or to war, corruption, luxury and theft.Read more at location 459

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after studying the issue, that the entire concept of food miles is ‘a profoundly flawed sustainability indicator’. Getting food from the farmer to the shop causes just 4 per cent of all its lifetime emissions. Ten times as much carbon is emitted in refrigerating British food as in air-freighting it from abroad, and fifty times as much is emitted by the customer travelling to the shops. A New Zealand lamb, shipped to England, requires one-quarter as much carbon to get on to a London plate as a Welsh lamb; aRead more at location 621

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There is no such thing as unproductive employment, so long as people are prepared to buy the service you are offering. Today, 1 per cent works in agriculture and 24 per cent in industry, leaving 75 per cent to offer movies, restaurant meals, insurance broking and aromatherapy.Read more at location 640

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allows us each to consume more and more different things by each producing fewer and fewer is, I submit, the central story of humanity. Innovation changes the world but only because it aids the elaboration of the division of labour and encourages the division of time.Read more at location 690

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once cooked, starch gelatinises and protein denatures, releasing far more calories for less input of energy. As a result, whereas other primates have guts weighing four times their brains, the human brain weighs more than the human intestine. Cooking enabled hominids to trade gut size for brain size.Read more at location 765

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A single, routine, minuscule Wal-Mart decision in the 1990s – not to sell deodorant in cardboard boxes – saved America $50 million a year, half of which was passed on to customers.Read more at location 1673

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In effect, Borlaug and his allies had unleashed the power of fertiliser, made with fossil fuels. Since 1900 the world has increased its population by 400 per cent; its cropland area by 30 per cent; its average yields by 400 per cent and its total crop harvest by 600 per cent. So per capita food production has risen by 50 per cent. Great news – thanks to fossil fuels.Read more at location 2093

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(chickens and fish convert grain into meat three times as efficiently as cattle; pigs are in between)Read more at location 2169

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The dirigiste mentality that dominated the second half of the twentieth century was always asking who is in charge, looking for who decided on a policy of trade. That is not how the world works. Trade emerged from the interactions of individuals. It evolved. Nobody was in charge.Read more at location 2412

Note: echoes of the intrnet, social networking, wikipedia Edit

It is common to find that two traders both think their counterparts are idiotically overpaying: that is the beauty of Ricardo’s magic trick.Read more at location 2477

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governments gradually employ more and more ambitious elites who capture a greater and greater share of the society’s income by interfering more and more in people’s lives as they give themselves more and more rules to enforce, until they kill the goose that lays the golden eggs. There is a lesson for today. Economists are quick to speak of ‘market failure’, and rightly so, but a greater threat comes from ‘government failure’. Because it is a monopoly, government brings inefficiency and stagnation to most things it runs; government agencies pursue the inflation of their budgets rather than the service of their customers; pressure groups form an unholy alliance with agencies to extract more money from taxpayers for their members.Read more at location 2670

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Rural self-sufficiency is a romantic mirage. Urban opportunity is what people want. In 2008 for the first time more than half the people in the world lived in cities. That is not a bad thing. It is a measure of economic progress that more than half the population can leave subsistence and seek the possibilities of a life based on the collective brain instead. Two-thirds of economic growth happens in cities.Read more at location 2783

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The economist Pietra Rivoli writes, ‘As generations of mill girls and seamstresses from Europe, America and Asia are bound together by this common sweatshop experience – controlled, exploited, overworked, and underpaid – they are bound together too by one absolute certainty, shared across both oceans and centuries: this beats the hell out of life on the farm.’Read more at location 3219

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Two billion people alive today have never turned on a light switch.Read more at location 3420

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Though they may start out full of entrepreneurial zeal, once firms or bureaucracies grow large, they become risk-averse to the point of Luddism.Read more at location 3818

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A large study by the Organisation for Economic Co-operation and Development concluded that government spending on R&D has no observable effect on economic growth, despite what governments fondly believe. Indeed it ‘crowds out resources that could be alternatively used by the private sector, including private R&D’. This rather astonishing conclusion has been almost completely ignored by governments.Read more at location 3940

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As Bruce Ames famously demonstrated in the late 1990s, cabbage has forty-nine natural pesticides in it, more than half of which are carcinogens. In drinking a single cup of coffee you encounter far more carcinogenic chemicals than in a year’s exposure to pesticide residues in food.Read more at location 4357

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The history of the world is replete with examples of the extinction or near-exhaustion of resources: mammoths, whales, herrings, passenger pigeons, white pine forests, Lebanon cedars, guano. They are all, note, ‘renewable’. By striking contrast, there is not a single non-renewable resource that has run out yet: not coal, oil, gas, copper, iron, uranium, silicon, or stone.Read more at location 4410

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The aid that Zambia has received since 1960, if invested instead in assets giving a reasonable rate of return, would by now have given Zambians the income per head of the Portuguese – $20,000 instead of $500.Read more at location 4611

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They could find no evidence that aid resulted in growth in any countries. Ever.Read more at location 4615

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Botswana turns out to have secure, enforceable property rights that are fairly widely distributed and fairly well respected. When Daron Acemoglu and his colleagues compared property rights with economic growth throughout the world, they found that the first explained an astonishing three quarters of the variation in the second and that Botswana was no outlier: the reason it had flourished was because its people owned property without fear of confiscation by chiefs or thieves to a much greater extent than in the rest of Africa. This is much the same explanation for why England had a good eighteenth century while China did not.Read more at location 4667

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Whether considering fish off Iceland, kudu in Namibia, jaguars in Mexico, trees in Niger, bees in Bolivia or water in Colorado, the same lesson applies. Give local people the power to own, exploit and profit from natural resources in a sustainable way and they will usually preserve and cherish those resources. Give them no share in a wildlife resource that is controlled – nay ‘protected’ – by a distant government and they will generally neglect, ruin and waste it. That is the real lesson of the tragedy of the commons.)Read more at location 4719

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The twenty-first century will be a magnificent time to be alive. Dare to be an optimist.Read more at location 5226

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Adapt: Why Success Always Starts with Failure by Tim Harford

noreply@blogger.com (Jim) — Sat, 28 Jan 2012 13:30:00 +0000

The core message of the book is that if you are failing then you are not trying hard enough. That you should try things out at a simple scale first and gamble on many small bets.
How professional experts are rarely worth listening to for their predictions about the future (expect in limited tightly controlled systems)
Along the way the book covers how disruptive technologies take hold and why large established business find it so hard to innovate.

Predictions about Russia from experts on Russia were no more accurate than predictions about Russia from experts on Canada.Read more at location 159

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Most accounts of Tetlock’s research savour the humbling of the professional pundits. And why not? One of Tetlock’s more delicious discoveries was that the more famous experts – those who spent a lot of time as talking heads on television – were especially incompetent.Read more at location 161

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The market has solved the problem of generating material wealth, but its secret has little to do with the profit motive or the superior savvy of the boardroom over the cabinet office. Few company bosses would care to admit it, but the market fumbles its way to success, as successful ideas take off and less successful ones die out. When we see the survivors of this process – such as Exxon, General Electric and Procter & Gamble – we shouldn’t merely see success. We should also see the long, tangled history of failure, of all of the companies and all of the ideas that didn’t make it.Read more at location 239

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Astounding complexity emerges in response to a simple process: try out a few variants on what you already have, weed out the failures,Read more at location 246

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In fact, Stuart Kauffmann and John Holland, both complexity theorists affiliated with the multidisciplinary Santa Fe Institute, have shown that the evolutionary approach is not just another way of solving complex problems. Given the likely shape of these ever-shifting landscapes, the evolutionary mix of small steps and occasional wild gambles is the best possible way to search for solutions.Read more at location 299

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We should not leap to conclusions based on an abstract mathematical model, but Ormerod’s discovery strongly implies that effective planning is rare in the modern economy. I wouldn’t go so far as to suggest that Apple might as well replace Steve Jobs with a dart-throwing chimpanzee – even though it would certainly liven up Apple product launches. But the evidence suggests that in a competitive environment, many corporate decisions are not successful, and corporations constantly have to cull bad ideas and search for something better.Read more at location 350

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We will have to make an uncomfortable number of mistakes, and learn from them, rather than cover them up or deny they happened, even to ourselves. This is not the way we are used to getting things done.Read more at location 369

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The Soviets failed at both: they found it impossible to tolerate a real variety of approaches to any problem; and they found it hard to decide what was working and what was not. TheRead more at location 415

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What Palchinsky realised was that most real-world problems are more complex than we think. They have a human dimension, a local dimension, and are likely to change as circumstances change. His method for dealing with this could be summarised as three ‘Palchinsky principles’: first, seek out new ideas and try new things; second, when trying something new, do it on a scale where failure is survivable; third, seek out feedback and learn from your mistakes as you go along. The first principle could simply be expressed as ‘variation’; the third as ‘selection’. The importance of the middle principle – survivability – is something which will become clear in chapter six, which explores the collapse of the banking system.Read more at location 442

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If we are to take the ‘variation’ part of ‘variation and selection’ seriously, uniformly high standards are not only impossible but undesirable. When a problem is unsolved or continually changing, the best way to tackle it is to experiment with many different approaches. If nobody tries anything different, we will struggle to figure out new and better ways to do anything. But if we are to accept variation, we must also accept that some of these new approaches will not work well. That is not a tempting proposition for a politician or chief executive to try to sell.Read more at location 494

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There is a limit to how much honest feedback most leaders really want to hear; and because we know this, most of us sugar-coat our opinions whenever we speak to a powerful person. In a deep hierarchy, that process is repeated many times, until the truth is utterly concealed inside a thick layer of sweet-talk.Read more at location 517

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All four examples – poker, Paris, Deal or No Deal and share portfolios – show a dogged determination to avoid crystallising a loss or drawing a line under a decision we regret. That dogged determination might occasionally be helpful, but it is counterproductive in all these cases and in many others. Faced with a mistake or a loss, the right response is to acknowledge the setback and change direction. Yet our instinctive reaction is denial. That is why ‘learn from your mistakes’ is wise advice that is painfully hard to take.Read more at location 590

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The three essential steps are: to try new things, in the expectation that some will fail; to make failure survivable, because it will be common; and to make sure that you know when you’ve failed.Read more at location 604

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‘In the absence of guidance or orders, figure out what they should have been … ’ – part of a sign on a command-post door in west Baghdad, commandeered by David PetraeusRead more at location 618

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Friedrich Hayek in an article published in 1945. What Hayek realised, and Allende and Beer did not seem to, was that a complex world is full of knowledge that is localised and fleeting. Crucially, the local information is often something that local agents would prefer to use for their own purposes.Read more at location 1157

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Return on investment is simply not a useful way of thinking about new ideas and new technologies. It is impossible to estimate a percentage return on blue-sky research, and it is delusional even to try. Most new technologies fail completely. Most original ideas turn out either to be not original after all, or original for the very good reason that they are useless. And when an original idea does work, the returns can be too high to be sensibly measured.Read more at location 1329

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Grants, unlike prizes, are a powerful tool of patronage. Prizes, in contrast, are open to anyone who produces results. That makes them intrinsically threatening to the establishment.Read more at location 1715

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‘Your first try will be wrong. Budget and design for it.’ – Aza Raskin, designer at FirefoxRead more at location 3464

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Disruptive innovations are disruptive precisely because the new technology doesn’t appeal to the traditional customers: it is different and for their purposes, it’s inferior. But for a small niche of new customers the new disruptive product is exactly what is needed. They want smaller, cheaper hard drives, or cameras that produce digital files, or email that you can access on any computer – and they are willing to tolerate the fact that the new product is inferior to the old one along all the traditional dimensions. That foothold in the niche market gives the new technology an opportunity to develop into a true threat to the old way of doing things.Read more at location 3778

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researchers find that self-employed people tend to be happier than the employed: they receive implicit approval of what they do every time somebody pays their invoice, whereas people with regular jobs tend to receive feedback that is both less frequent and less meaningful.Read more at location 4025

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in a complex world, we’re unlikely to get it right first time. To embrace the idea of adapting in everyday life seems to be to accept blundering into a process of unremitting failure. So it’s worth remembering once again why it is worth experimenting, even though so many experiments will, indeed, end in failure. It’s because the process of correcting the mistakes can be more liberating than the mistakes themselves are crushing, even though at the time we so often feel that the reverse is true.Read more at location 4081

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Mistakes were Made (but not by me) by Carol Tavris, Elliot Aronson

noreply@blogger.com (Jim) — Sun, 15 Jan 2012 13:43:00 +0000

Similar to some of the material in the Psychopath Test I read in November in a strange way, this book looks at our in-built tendency to judge others by different standards than those we use on ourselves.
How our memory is not what it seems at all, how it reconstructs the past so it fits with our view of the world and of ourselves.
How the well meaning social services teams construct abuse that never happened. How judges and prosecutors cannot accept that innocent men were imprisoned (or given the death penalty)

Perhaps my favourite quote is the last in this blog from a Chinese philosopher more than 2500 years ago - we really haven't come that far since then!

“There is probably no such thing as a conscious hypocrite.” It seems unlikely that Newt Gingrich said to himself, “My, what a hypocrite I am. There I was, all riled up about Bill Clinton’s sexual affair, while I was having an extramarital affair of my own right here in town.” Similarly, the prominent evangelist Ted Haggard seemed oblivious to the hypocrisy of publicly fulminating against homosexuality while enjoying his own sexual relationship with a male prostitute.Read more at location 174

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What they do show is that if a person voluntarily goes through a difficult or a painful experience in order to attain some goal or object, that goal or object becomes more attractive.Read more at location 374

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So powerful is the need for consonance that when people are forced to look at disconfirming evidence, they will find a way to criticize, distort, or dismiss it so that they can maintain or even strengthen their existing belief. This mental contortion is called the “confirmation bias.”Read more at location 384

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see.” Self-justification, therefore, is not only about protecting high self-esteem; it’s also about protecting low self-esteem if that is how a person sees himself.Read more at location 612

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people will bend over backward to reduce dissonance in a way that is favorable to them and their team. The specific ways vary, but our efforts at self-justification are all designed to serve our need to feel good about what we have done, what we believe, and who we are.Read more at location 726

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Just as we can identify hypocrisy in everyone but ourselves, just as it’s obvious that others can be influenced by money but not ourselves, so we can see prejudices in everyone else but ourselves. Thanks to our ego-preserving blind spots, we cannot possibly have a prejudice, which is an irrational or mean-spirited feeling about all members of another group. Because we are not irrational or mean spirited, any negative feelings we have about another group are justified; our dislikes are rational and well founded. It’s theirs we need to suppress.Read more at location 998

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Once people have a prejudice, just as once they have a political ideology, they do not easily drop it, even if the evidence indisputably contradicts a core justification for it. Rather, they come up with another justification to preserve their belief or course of action.Read more at location 1073

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reviewing the huge research literature on prejudice, found that whenever people are emotionally depleted—when they are sleepy, frustrated, angry, anxious, drunk, or stressed—they become more willing to express their real prejudices toward another group.Read more at location 1101

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Fortunately, we can also better understand the conditions under which prejudices diminish: when the economic competition subsides, when the truce is signed, when the profession is integrated, when they become more familiar and comfortable, when we are in a position to realize that they aren’t so different from us.Read more at location 1142

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We need a few trusted naysayers in our lives, critics who are willing to puncture our protective bubble of self-justifications and yank us back to reality if we veer too far off. This is especially important for people in positions of power.Read more at location 1152

memory researchers love to quote Nietzsche: “ ‘I have done that,’ says my memory. ‘I cannot have done that,’ says my pride, and remains inexorable. Eventually—memory yields.”Read more at location 1230

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Because memory is reconstructive, it is subject to confabulation—confusing an event that happened to someone else with one that happened to you, or coming to believe that you remember something that never happened at all.Read more at location 1260

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Conway and Ross called this self-serving memory distortion “getting what you want by revising what you had.”Read more at location 1387

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If we are to be careful about what we wish for because it might come true, we must also be careful which memories we select to justify our lives, because then we will have to live by them.Read more at location 1588

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Overwhelmingly, the evidence shows just the opposite. The problem for most people who have suffered traumatic experiences is not that they forget them but that they cannot forget them: The memories keep intruding.Read more at location 1879

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McNally. “The basic principle is: if the abuse was traumatic at the time it occurred, it is unlikely to be forgotten. If it was forgotten, then it was unlikely to have been traumatic. And even if it was forgotten, there is no evidence that it was blocked, repressed, sealed behind a mental barrier, inaccessible.”Read more at location 1884

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Their experience and training did not improve their performance. Their experience and training simply increased their belief that it did.Read more at location 2439

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Many judges, jurors, and police officers prefer certainties to science. Law professor D. Michael Risinger and attorney Jeffrey L. Loop have lamented “the general failure of the law to reflect virtually any of the insights of modern research on the characteristics of human perception, cognition, memory, inference or decision under uncertainty, either in the structure of the rules of evidence themselves, or the ways in which judges are trained or instructed to administer them.”Read more at location 2559

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Successful partners extend to each other the same self-forgiving ways of thinking we extend to ourselves: They forgive each other’s missteps as being due to the situation, but give each other credit for the thoughtful and loving things they do.Read more at location 2821

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Social psychologist June Tangney has found that being criticized for who you are rather than for what you did evokes a deep sense of shame and helplessness; it makes a person want to hide, disappear.Read more at location 2848

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In his groundbreaking study of more than 700 couples, whom he followed over a period of years, psychologist John Gottman found that contempt—criticism laced with sarcasm, name calling, and mockery—is one of the strongest signs that a relationship is in free fall.Read more at location 2856

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in the way each side tells the same story. Perpetrators, whether individuals or nations, write versions of history in which their behavior was justified and provoked by the other side; their behavior was sensible and meaningful; if they made mistakes or went too far, at least everything turned out for the best in the long run; and it’s all in the past now anyway. Victims tend to write accounts of the same history in which they describe the perpetrator’s actions as arbitrary and meaningless, or else intentionally malicious and brutal; in which their own retaliation was impeccably appropriate and morally justified; and in which nothing turned out for the best. In fact, everything turned out for the worst, and we are still irritated about it.Read more at location 3248

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The implications of these studies are ominous: Combine perpetrators who have high self-esteem and victims who are helpless, and you have a recipe for the escalation of brutality. This brutality is not confined to brutes—sadists or psychopaths. It can be, and usually is, committed by ordinary individuals,Read more at location 3314

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The moral of our story is easy to say, and difficult to execute. When you screw up, try saying this: “I made a mistake. I need to understand what went wrong. I don’t want to make the same mistake again.” Dweck’s research is heartening because it suggests that at all ages, people can learn to see mistakes not as terrible personal failings to be denied or justified, but as inevitable aspects of life that help us grow, and grow up.Read more at location 3855

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As the Chinese philosopher Lao Tzu (“Old Master”) observed more than twenty-five-hundred years ago: A great nation is like a great man: When he makes a mistake, he realizes it. Having realized it, he admits it. Having admitted it, he corrects it. He considers those who point out his faults as his most benevolent teachers.Read more at location 3882

A Zen Monk Had Sweaty Palms by Sims Wyeth

noreply@blogger.com (Jim) — Sun, 15 Jan 2012 02:23:00 +0000

A great book for improving presentation skills. Each 'Chapter' is just one page long, with an idea to improve one aspect.

Moving Mountains by Henry M. Boettinger,Read more at location 254

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Thou shalt not be Arrogant. Thou shalt not be Boring. Thou shalt not be Confusing. Let us presenters, who seek to sell ourselves, our recommendations, and our products and services, contemplate these ABCs, lest we be turned away—by the prospect who decides to turn down our offer, by the client, who rejects our recommendations, or by our own colleagues, who would banish us from lofty executive perches because we fail to inspire confidence and belief when we open our mouths.Read more at location 372

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Why do people clap at the end of a speech? Because it’s over. One of the great pleasures for an audience is the experience of quickly grasping what you’re getting at. They resent it when you deprive them of this pleasure. The correlation between length of talk and value of content is tenuous. As Mrs. Humphrey said to her husband, “Hubert, for a speech to be immortal, it need not be interminable.”Read more at location 399

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with movement is very near the crux of any performance art.Read more at location 423

Note: A fantastic book so thankyou for recommending. it I really appreciated the. style of delivering the message in short thoughtful points - much like a good presentation Whilst reading the book and thinking about how I could apply the various points, I wonder if we could pick one each week, post it here and share examles of our own experience in applying it (or where we found trouble applying it). What do you think? Edit

The Rare Find: Spotting Exceptional Talent Before Everyone Else by George Anders

noreply@blogger.com (Jim) — Mon, 12 Dec 2011 13:30:00 +0000

A book that looks at how the top talent pickers across education, sport and business use tools to ensure they get the very best candidates that others will often overlook, and these are techniques we can all use.

In fact there are several good ideas for improving your own performance in your own job now, never mind picking your successor.

Time and again those interviewed came back to selecting on character rather than ability - but how much of our selection process tries to ensure their existing experience matches what we need them to do rather than how they did it!

America. It’s not that we don’t know enough about candidates. Today’s dossiers on serious contenders for a CEO’s job frequently surpass what the U.S. Senate knew about Supreme Court nominees a few decades ago. It’s not that there are too few talented people to fill crucial openings. This is a country in which talent proliferates.Read more at location 640

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hire. His advice always flowed from the same starting point. Before you do anything else, he wrote, “Think through the assignment.” That sounds painfully simple. It seems so obvious that many leaders dash past that step.Read more at location 646

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that good teaching is not about charisma. It’s not anything magical or elusive. These teachers set clear goals for their students, motivate people (in this case students and their families) to work hard toward these goals, work relentlessly to accomplish them, and constantly assess their effectiveness and improve their performance over time.Read more at location 794

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The best experts in any field constantly stretch their horizons so they can do something new. That is how they stay sharp. Nobel laureates do this; great composers do this—and so do the savviest judges of human potential. They refuse to become so habit-bound that familiar customsRead more at location 923

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“The best candidates are constantly trying to figure out why they went off the path,” Kiev added. “They’re introspective. They remember every detail. The ones who don’t learn much have hazy memories. They tend to blame external factors. They sound intellectually honest, but they aren’t. Their excuses are plentiful.” In Kiev’s view, the difference between rebounders and evaders is “hardwired into people. If you’re inquiring well, you should be able to get at it.”Read more at location 1078

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Consider this admonition from a popular management primer on hiring: Lou Adler’s Hire with Your Head. The author’s number one precept is as follows: “Remain objective throughout the interviewing process, fighting the impact of first impressions, biases, intuitions, prejudices and preconceived notions of success. This way, all information collected during the interview is both relevant and unbiased.” That’s a fine way to pick out a lawn mower. It’s not a great way to choose people.Read more at location 1360

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One of Dr. Weiss’s favorite ways of spotting the nonobvious winners is to see how candidates answer a quartet of essay questions that are aimed at drawing out students’ character. Those questions ask students to talk about rewarding experiences, overcoming adversity, areas of pride, and moments of exclusion.Read more at location 1544

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Ask audition masters what they are hunting for, and the deepest answers involve subjects’ character. Regardless of differences in the exact ways that talent is expressed, each domain’s underlying quests are strikingly similar: Who tries hard? Who prepares well? Who recovers quickly and calmly from a setback? Who works well with others? Who can size up a turbulent situation and come up with a plan?Read more at location 1627

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What the FBI’s Hostage Rescue Team wants is remarkably similar to what Johns Hopkins, Facebook, and dozens of other high-talent organizations are seeking, too. The FBI’s list is as follows: Initiative, perseverance, and compatibility.Read more at location 1776

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Discipline, trainability, and judgment. Loyalty, leadership, and maturity.Read more at location 1779

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Mediocre engineers were seen as silent saboteurs, spewing out flawed computer code that could take years to fix.Read more at location 1877

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xkcd.com. (xkcd is weird but hilarious—take a look.)Read more at location 1910

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For a while, Canfield scouted the world of stand-up comics. As he later explained, they are marvelous storytellers. They hone their material relentlessly, so that it connects with an audience. (If they don’t, they become sit-down comics.) And they are keenly aware of audiences’ short attention span, in ways that other narrators often overlook.Read more at location 2041

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Menkes started running critical-thinking tests for corporate clients. He wrote a book about his approach called Executive Intelligence.Read more at location 3456

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“CEOs who are persistent and proactive get things done. CEOs who are not, do not get things done, even if they are good listeners, team players, etc. And if you do not get things done, the people working for you get frustrated or even leave, particularly the better ones.”Read more at location 3581

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Compromise on experience; don’t compromise on character.Read more at location 3623

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Seek out “talent that whispers.” The world is full of overlooked people,Read more at location 3636

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On the fringes of talent, ask: “What can go right?”Read more at location 3641

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Take tiny chances—so you can take more of them.Read more at location 3645

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Draw out the “hidden truths” of each job.Read more at location 3661

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Be willing to use your own career is a template.Read more at location 3670

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Rely on auditions to see how and why people achieve the results they do.Read more at location 3682

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To learn the most from an audition, pay attention to more than the absolute caliber of the performance. Concentrate hardest on what you can learn about the candidate’s character.Read more at location 3687

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Master the art of aggressive listening.Read more at location 3692

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Be willing to pick one trait that matters more than anything. Often the ability to recover from setbacks is what separates people who surpass expectations from those who disappoint. ResilienceRead more at location 3705

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Be alert to other invisible virtues, too. Curiosity is also invisible on most résumés yet it is a remarkable talisman in many careers.Read more at location 3714

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Push your best candidates to grow even stronger.Read more at location 3736

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accomplish. If you choose to champion great talent, you will be picking one of the most altruistic things a person can do. Making the most of the next generation of achievers is akin to parenting, except on a larger scale. The benefits to society are likely to be much greater than the personal gain.Read more at location 3770

Future Babble by Dan Gardner

noreply@blogger.com (Jim) — Tue, 29 Nov 2011 13:12:00 +0000

A book about why we have a desperate need to try and predict the future but why we will always be doomed to fail. Although there are some traits that make some people slightly better at it than others.
A must read book for all those struggling to compose Strategic Plans or Budget submissions.

A really telling insight was that those who are most confident that they are right are the worst at predicting the future with any degree of certainty. Statistically the best prediction is that the future will be the same as today (because for most of the time it is) this will be wrong for sure but more accurate than most forecasters.

The book looks at our evolutionary drive to understand what is going to happen and to the biases this builds into our judgement and our memory.

So how do we get better:

Gather information from as many sources as possible
Accept you may well be wrong and actively seek out views that do not agree with yours. Draft a list of reasons why your belief may be wrong
Display humility, nothing is certain and your predictions should never be so.
Consider how your decisions will play out if your predictions turn out to be wrong. A good decision is robust in the face of various futures.

No matter how often expert predictions fail, we want more. This strange phenomenon led Scott Armstrong, an expert on forecasting at the Wharton School of the University of Pennsylvania, to coin his “seer-sucker” theory: “No matter how much evidence exists that seers do not exist, suckers will pay for the existence of seers.” Sometimes we even go back to the very people whose predictions failed in the past and listen, rapt, as they tell us how the future will unfold. This book explains why expert predictions fail and why we believe them anyway.Read more at location 365

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Certain styles of thinking and decision making do a far better job of groping amid the inky blackness of the future to find a path ahead. These styles can be learned and applied, with results that are positive, although far from perfect. And that leads to the ultimate conclusion, which is one we do not want to accept but must: There are no crystal balls, and no style of thinking, no technique, no model will ever eliminate uncertainty.Read more at location 398

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Experts who did better than the average of the group – and better than random guessing – thought very differently. They had no template. Instead, they drew information and ideas from multiple sources and sought to synthesize it. They were self-critical, always questioning whether what they believed to be true really was. And when they were shown that they had made mistakes, they didn’t try to minimize, hedge, or evade. They simply acknowledged they were wrong and adjusted their thinking accordingly. Most of all, these experts were comfortable seeing the world as complex and uncertain – so comfortable that they tended to doubt the ability of anyone to predict the future. That resulted in a paradox: The experts who were more accurate than others tended to be much less confident that they were right.Read more at location 581

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Put all that together and there’s a very clear lesson: If you hear a hedgehog make a long-term prediction, it is almost certainly wrong. Treat it with great skepticism.Read more at location 595

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economists Ron Alquist and Lutz Kilian published a paper in which they examined all the sophisticated methods one could use to determine the price of oil one month, one quarter, or one year in the future. They looked at fancy econometric models. They looked at oil prices in futures and spot markets. They looked at the consensus opinion of oil analysts. And they found that anyone could do better than all these crystal balls, sometimes far better, by applying a mindless rule: Always predict that the price in the future will be whatever the price is now. True, this technique is far from accurate. In fact, it’s pretty awful. But the others are worse.Read more at location 707

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“There’s a demand for the forecasts so people generate them,”Read more at location 1054

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Foxes are okay with that. They like complexity and uncertainty, even if that means they can draw only cautious conclusions and they have to admit they could be wrong. “Maybe” is fine with them.Read more at location 1671

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“This effect contributes to the appeal of scenarios and the illusory insight they often provide,” Kahneman and Tversky wrote. And it’s so easy to do. Just add details, colour, and drama. And pile on the predictions. The actual accuracy will plummet but the feeling of plausibility will soar.Read more at location 2107

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People who try to peer into the future – both experts and laypeople – are very likely to start with an unreasonable bias in favour of the status quo. Today’s trends will continue, and tomorrow will be like today, only more so. With that belief in place, the confirmation bias that so misled Arnold Toynbee kicks in. Evidence that supports the belief is embraced without question; evidence that contradicts the belief is treated with extreme suspicion or, more often, ignored. Steadily, the belief that tomorrow will be like today grows into a strong conviction. Occasionally, a surprise – the decline of Japan, the terrorist attacks of 9/11, the crash of 2008 – slaps us in the face and we are reminded that tomorrow may not be like today. Suitably chastened, we get imaginative and think of all the ways the surprise that just happened could happen again … and we are right back in the mental rut of the status quo. Genuinely imaginative attempts to portray change – including scenario planning – may help pull us out of that rut but they may also cause us to develop an unrealistic sense of how likely those imaginative futures really are. And all the while, no matter what happens, we are convinced we are right.Read more at location 2129

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In an unsettling study, elderly residents of a nursing home were placed in rooms where everything was handled by others, right down to the arrangement of the furniture and the selection and care of a house-plant. With no decisions to make, their environment was pleasant but completely out of their control. Other residents of the home were given the same room and treatment, but they were asked to decide how the furniture would be arranged and they were asked to select and care for a plant. A year and a half later, 30 per cent of the residents without control had died, compared to 15 per cent of those with control.Read more at location 2456

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Gilbert noted. “People feel worse when something bad might occur than when something bad will occur.”Read more at location 2561

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“Survival requires urgent attention to possible bad outcomes,” the review noted, “but it is less urgent with regard to good ones.” People whose brains gave priority to bad news were much less likely to be eaten by lions or die some other unpleasant and untimely death than those whose brains did not, and so “negativity bias” became a universal human trait.37Read more at location 2571

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The experts who dominate the media won’t be the most accurate. In fact, they will be the least accurate. And that is precisely what Philip Tetlock discovered. Using Google hits as a simple way to measure the fame of each of his 284 experts, Tetlock found that the more famous the expert, the worse he did.Read more at location 2721

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In much the same way, a strong, enthusiastic, confident speaking style has a power that transcends mere rationalityRead more at location 2791

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researchers concluded that “persuasion is a function not of intelligence, prediscussion conviction, position with respect to the issue, manifest ability, or volubility, but of the expression of confidence during the discussion itself.” Very simply: confidence convinces.Read more at location 2808

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Robertson doesn’t deny that his story is very simplistic, or that there’s far more to his thinking. But he doesn’t go further because this story is what people want. Anything more is needless complication. “You don’t have to sit there and bring in all these charts and stuff,” he says. “If you don’t trust me, it won’t make a difference.”Read more at location 2925

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For experts who want the public’s attention, Paul Ehrlich is the gold standard. Be articulate, enthusiastic, and authoritative. Be likeable. See things through a single analytical lens and craft an explanatory story that is simple, clear, conclusive, and compelling. Do not doubt yourself. Do not acknowledge mistakes. And never, ever say “I don’t know.”Read more at location 3014

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It’s especially true among those who put together business forecasts; managers and executives know that someone who wishes to keep her job will not announce to a roomful of superiors that the future is complex, unpredictable, and out of her control – no matter how true that may be. But more than all the rest, the news media know the lesson of Paul Ehrlich.Read more at location 3040

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Be simple, clear, and confident. Be extreme. Be a good storyteller. Think and talk like a hedgehog.Read more at location 3129

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the different emphasis we put on predictions that hit and those that miss. We ignore misses, even when they lie scattered by the dozen at our feet; we celebrate hits, even when we have to hunt for them and pretend there was more to them than luck. This discrepancy is so extreme and pervasive it even has a name. It’s the “Jeane Dixon Effect,”Read more at location 3238

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They may be wrong far more often than they are right. They may do worse than flipped coins and stopped clocks. But they never fail to deliver the certainty that we crave. And we never fail to ask for more.Read more at location 3476

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Memory is an organic process, not a recording. While memories can remain sharp and fixed for decades, they can also evolve, sometimes subtly, sometimes dramatically. These changes aren’t random. Memories serve the present: We misremember in ways that suit the needs of the moment.Read more at location 3778

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Knowing the world is fundamentally uncertain and unpredictable, and knowing that the brains we use to understand this uncertain and unpredictable world contain psychological biases and other tripwires that skew our judgement, a little humility is in order. The future is dark, and much as we might like to see in the dark, we cannot. Imagining otherwise is dangerous. Stride confidently forward in the dark and you’re likely to feel quite pleased with yourself right up until the moment you walk into a wall.Read more at location 4434

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While our decisions have to be made on the basis of what we think is going to happen, we must always consider how our decisions will fare if the future turns out to be very different. A good decision is one that delivers positive results in a wide range of futures.Read more at location 4475

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Recall that people whose thinking style marks them as “foxes,” in Philip Tetlock’s terms, are modest about their ability to forecast the future, comfortable with complexity and uncertainty, and very self-critical – they are always questioning whether what they believe to be true really is. Foxes also reject intellectual templates, preferring to gather ideas and information from as many sources as they can get their hands on.Read more at location 4591

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By grabbing on to whatever information is available, from whatever source, foxes aggregate. They may not do it as well as a prediction market, but the fundamental process is the same, and it helps make their judgement superior to that of hedgehogs who know One Big Thing and aren’t interested in finding out more.Read more at location 4608

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The second element at work is what psychologists call metacognition. This is simply thinking about thinking. Alan Barnes constantly pushes his analysts to reflect on their conclusions, to question them, to ask themselves where they came from and whether they really make sense or not.Read more at location 4616

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A basic method for overcoming confirmation bias, for example, is to draft a list of reasons why your belief may be wrong, but the analysts “are reluctant to use even that extremely simple tool,”Read more at location 4629

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The last of the three key elements at work is humility. “I think when you’re dealing with future events, pretending that you have absolute certainty is doing the reader a great disservice,” Barnes says.Read more at location 4633

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The billionaire financier George Soros is a classic fox.Read more at location 4648

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Anyone who reads history with sufficient imagination to overcome hindsight bias knows this. What appears most likely, or even certain, does not happen, while what happens is something quite unexpected. It was true for my grandfather’s generation. It was true for my mother’s. It is true for mine. And it will be true for my children’s, which is one of the few grand-scale predictions I am comfortable making. As journalist James Fallows observed, “What looks like tomorrow’s problem is rarely the real problem when tomorrow rolls around.”Read more at location 4764

The Psychopath Test by Jon Ronson

noreply@blogger.com (Jim) — Fri, 25 Nov 2011 13:01:00 +0000

Quite a disturbing book about how the medical profession have been on a drive to have an easy simple way of detecting psychopaths. Unfortunately most of us display some of the traits on the PCL-R Hare checklist at some point, and once you have been labelled it is very difficult to prove otherwise since the more you deny it the stronger you are seen to be a psychopath.

The actual book is engaging and written as a story of how a journalist investigates a series of particular cases rather than a dry academic text. It doesn't just cover those in mental institutions but also reality TV contestants, ADHD in schools, senior corporate managers, .....

Really made me think - am I a psychopath, how many people I know are psychopaths by these definitions?

They say Hubbard was the very first man to reveal that psychiatrists were dosing patients with massive amounts of LSD and electro-convulsive therapy in secret CIA-funded attempts to create brainwashed assassins. He published his account of the experiments in 1969 and it wasn’t until June 1975 that the Washington Post announced to an unsuspecting world that these programmes (codenamed MK-ULTRA) existed.Read more at location 789

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Their conclusions became the basis for his now-famous twenty-point Hare PCL-R Checklist. Which was this:

ITEM 1: Glibness/superficial charm

ITEM 2: Grandiose sense of self-worth

ITEM 3: Need for stimulation/proneness to boredom

ITEM 4: Pathological lying

ITEM 5: Cunning/manipulative

ITEM 6: Lack of remorse or guilt

ITEM 7: Shallow affect

ITEM 8: Callous/lack of empathy

ITEM 9: Parasitic lifestyle

ITEM 10: Poor behavioral controls

ITEM 11: Promiscuous sexual behavior

ITEM 12: Early behavior problems

ITEM 13: Lack of realistic long-term goals

ITEM 14: Impulsivity

ITEM 15: Irresponsibility

ITEM 16: Failure to accept responsibility for own actions

ITEM 17: Many short-term marital relationships

ITEM 18: Juvenile delinquency

ITEM 19: Revocation of conditional release

ITEM 20: Criminal versatilityRead more at location 1500

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They love winning. If you take loving kindness out of the human brain there’s not much left except the will to win.’ ‘Which means you’ll find a preponderance of them at the top of the tree?’ I said. ‘Yes,’ she said. ‘The higher you go up the ladder the greater the number of sociopaths you’ll find there.’Read more at location 1772

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Snakes in Suits: When Psychopaths Go To Work – co-authored with a psychologist named Paul Babiak.Read more at location 2141

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Practically every peak-time programme is populated by people who are just the right sort of mad, and I now knew what the formula was. The people who are the right sort of mad are a bit madder than we fear we’re becoming, and in a recognizable way. We might be anxious but we aren’t as anxious as them. We might be paranoid but we aren’t as paranoid as them. We are entertained by them, and comforted that we’re not as mad as they are.Read more at location 3265

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There is no evidence that we’ve been placed on this planet to be especially happy or especially normal. And in fact our unhappiness and our strangeness, our anxieties and compulsions, those least fashionable aspects of our personalities, are quite often what lead us to do rather interesting things.Read more at location 4220

The coming jobs war by Jim Clifton

noreply@blogger.com (Jim) — Thu, 10 Nov 2011 00:33:00 +0000

Written by Gallup, the polling organisation the book gives a frankly depressing view of the likely future track of the 'developed western countries' particularly America. In fact the book is a little too xenophobic for my taste, although the messages as the author says could be applied anywhere. What he seems to fail to realise is that there are many other countries in the 'race' he describes and I see no particular reason why the USA should win.

In addition to the well known 12 employee engagement questions (that we really should use at work rather than keep developing our own as there is so much baseline data) the book outlines a set of customer engagement and student engagement questions along similar lines

Six years into our global data collection effort, we may have already found the single most searing, clarifying, helpful, world-altering fact. What the whole world wants is a good job. This is one of the most important discoveries Gallup has ever made.Read more at location 118 •
Humans used to desire love, money, food, shelter, safety, peace, and freedom more than anything else. The last 30 years have changed us. Now people want to have a good job, and they want their children to have a good job.Read more at location 126 •
So what would going broke look like on a national scale? Well, take a look at Detroit, and imagine that economic disaster coast to coast. Look at California. California can’t pay its pensions, it will likely declare bankruptcy, a lot of its employees are going to be out of a job, and its bond holders won’t be able to get their money. The same is true for Illinois and Michigan.Read more at location 187 •
Yet a country’s GDP is its most important leading indicator. So goes its increase and decrease, so goes jobs, spending, tax base, and then everything else. Size matters, but so does direction.Read more at location 280 •
And then there’s this fact, which few people seem to recognize: All money is going to get spent anyway. You’ll spend it, your business will spend it, or your government will spend it.Read more at location 351 •
“My hard-earned government pension has been slashed.” You’ll start hearing this slowly at first, and then all the time. That’s because when the GDP has no growth, there is no job growth, which depletes the once huge tax base that pays for everything. And so the government has to cut services by a third, including government pensions.Read more at location 370 •
With fewer jobs, there are fewer workers to fund Social Security. So payments get cut. And it’s a significant problem for a democratic system that has elected officials who don’t want to address it, because explaining that this program simply cannot continue making the payments the way it does now will cause them to lose elections.Read more at location 390 •
Plato made a very cruel but astute observation: “One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors.”Read more at location 766 •
Innovation has no value until it creates something a customer wants. Here is a Gallup economics finding that few leaders anywhere know: Even the best ideas and inventions in the world have no value until they have a customer.Read more at location 894 •
Let me summarize the biggest body of behavioral economic data in the world on workplaces. It comes from a Gallup study on workplace productivity, and it consists of 12 critical elements of work life. Gallup has asked millions of workers worldwide to respond to these items for more than a decade and always finds the same thing: Miserable employees create miserable customers.Read more at location 1048 •
And if you can’t find the misery quotient, I guarantee your accounting department will. It will take a year or two though. I’ve observed that employee misery precedes all the easy-to-find data by one day to two years, depending on the type of business. Somebody in the company needs to treat a customer like hell for between one day and two years before the customer will defect. Customer defections are immediately followed by job loss.Read more at location 1053 •
And then there are the 19% of actively disengaged employees who are there to dismantle and destroy your company. They exhaust managers, they have more on-the-job accidents and cause more quality defects,Read more at location 1082 •
Gallup also found that other apparent key variables (such as “I’m fairly compensated”) outside the 12 didn’t distinguish between engaged and disengaged employees. These 12 items hold up statistically throughout all job variations and throughout business and industry, retail, hospitality, manufacturing, government, nongovernmental organizations (NGOs), the military, education — virtually all jobs everywhere in the world.Read more at location 1097 •

There’s one behavioral economic demand left, and it is big. If you don’t get this one right, everything after it falls apart. Once you have carefully diagnosed an individual’s strengths and given her that near-perfect job that she has real talent to perform with a mission and purpose, make sure she has a great manager. Everything else on The Gallup Path shuts down if an employee has a bad boss.Read more at location 1217 •

A leader’s most defining moment is the decision of whom to name as manager at any level — whom to put in charge of developing the talents and skills of others. If a leader chooses good managers, everything works. If a leader assigns the wrong person as manager, everything fails. Nothing fixes bad managers, not coaching, competency training, incentives, or warnings — nothing works. A bad manager never gets better.Read more at location 1224 •
In fact, one of the biggest blind spots in most American businesses is that they don’t realize how big the emotional economy is within their own customer base worldwide. The best corporate leaders in the United States are still unaware that they are leaving a great deal of money on the table through abysmal execution of the employee-customer links because they are so focused on the “hard numbers,” of which they have already squeezed every dollarRead more at location 1291 •
To measure customer engagement, these are the best 11 questionsRead more at location 1306 •
Gallup scientists have found to ask customers anywhere in the world: CE1. Taking into account all the products and services you receive from them, how satisfied are you with (Company) overall? CE2. How likely are you to continue to do business with (Company)? CE3. How likely are you to recommend (Company) to a friend or associate? CE4. (Company) is a name I can always trust. CE5. (Company) always delivers on what they promise. CE6. (Company) always treats me fairly. CE7. If a problem arises, I can always count on (Company) to reach a fair and satisfactory resolution. CE8. I feel proud to be (a/an) (Company) customer. CE9. (Company) always treats me with respect. CE10. (Company) is the perfect company/product for people like me. CE11. I can’t imagine a world without (Company).Read more at location 1307 •
There are more than 75 million students enrolled in schools in the United States — nearly 50 million in the 5th through 12th grades. They are the successors of today’s business leaders. The problem is, approximately 30% of those students will drop out or fail to graduate on schedule. About 50% of minorities are dropping out. This gives the rest of the developed world a huge advantage over the United States in the upcoming economic wars.Read more at location 1406 •
Gallup continues to find, as we have for more than 75 years, that lots of money is rarely the solution to big problems. Sometimes, in fact, the bigger the problem, the less expensive the solution. What’s expensive is trying to fix after-the-fact outcomes rather than creating strategies that get at the behaviors and cause.Read more at location 1425 •
Gallup Student Poll Items: 1. Please imagine a ladder with steps numbered from zero at the bottom to ten at the top. The top of the ladder represents the best possible life for you and the bottom of the ladder represents the worst possible life for you. On which step of the ladder would you say you personally feel you stand at this time? On which step do you think you will stand about five years from now? 2. I know I will graduate from high school. 3. There is an adult in my life who cares about my future. 4. I can think of many ways to get good grades.Read more at location 1481 •
5. I energetically pursue my goals. 6. I can find lots of ways around any problem. 7. I know I will find a good job after I graduate. 8. I have a best friend at school. 9. I feel safe in this school. 10. My teachers make me feel my schoolwork is important. 11. At this school, I have the opportunity to do what I do best every day. 12. In the last seven days, I have received recognition or praise for doing good schoolwork. 13. My school is committed to building the strengths of each student. 14. In the last month, I volunteered my time to help others. 15. Were you treated with respect all day yesterday? 16. Did you smile or laugh a lot yesterday? 17. Did you learn or do something interesting yesterday? 18. Did you have enough energy to get things done yesterday? 19. Do you have health problems that keep you from doing any of the things other people your age normally can do? 20. If you are in trouble, do you have family or friends you can count on to help whenever you need them?Read more at location 1488 •
If you were to ask me, from all of Gallup’s data and research on entrepreneurship, what will most likely tell you if you are winning or losing your city, my answer would be, “5th to 12th graders’ image of and relationship to free enterprise and entrepreneurship.” The better the image, the more likely your city will win. If your city doesn’t have growing economic energy in your 5th through 12th graders, you will experience neither job creation nor city GDP growth.Read more at location 1530 •
1. The United States spent $2,500,000,000,000 on healthcare in 2009 — two and a half trillion dollars. Nearly half of this comes from Medicare and Medicaid (taxes). And the other half is private insurance and out-of-pocket spending. 2. This is the biggest price tag for anything in America. War in Iraq and Afghanistan run about $200 billion per year. The healthcare bill per year is 10 times bigger than the annual warRead more at location 1621 •
A hospital is, honest to God, a more dangerous place to be than Iraq or Afghanistan. Over the last eight years, about 6,000 American soldiers have been killed while fighting in Iraq and Afghanistan. During the same time, nearly 800,000 American patients have been killed by healthcare mistakes — and about 8,000,000 injured. War fatalities are so small compared to what is happening in hospitals and healthcare facilities. And of course, patients aren’t dying for their country.Read more at location 1666 •