Great by Choice – Book Notes

Book notes on Jim Collin’s Great by Choice – from Jeff Springer.

Great By Choice. Uncertainty, Chaos, and Luck—Why Some Thrive Despite Them All
By Jim Collins & Morten Hansen / Key Ideas

1. Thriving in Uncertainty. We cannot predict the future. But we can create it.

p. 1 “We cannot predict the future. But we can create it. …We can be astonished, confounded, shocked, stunned, delighted, or terrified, but rarely prescient. None of us can predict with certainty the twists and turns our lives will take. Life is uncertain, the future unknown. This is neither good nor bad. It just is, like gravity. Yet the task remains: how to master our own fate, even so.”

p. 12 “As the influential management thinker Peter Drucker taught, the best—perhaps even the only—way to predict the future is to create it.”

Note: Peter Drucker, the well known management guru, was known for saying: “You can’t predict the future, but you can create it.” The following 3 quotes are from the book: A Class with Drucker, by William Cohen.

p. 124 “The future, Drucker said again, is unpredictable, but can be created. In his lecture, Peter emphasized that while planning, especially strategic planning, was difficult and risky, it was one of management’s primary responsibilities. ‘Strategic planning is not about making decisions in the future,’ he said, since decisions could only be made now, in the present. So what he was really talking about was making decisions now to create a desired future for our companies. This implied reaching the goals or objectives we set, regardless of the environmental conditions we might later encounter. However it was crucial to start with our objectives. What exactly did we want to do? Only then could we decide on the actions we needed to take now, in the present, to realize these goals.”

p. 127 “Peter made it very clear that the process of creating your future, anybody’s future, begins with your goals and objectives. These need to be crystal-clear. Then you need to determine the actions that must be taken today to achieve these objectives in the future. Drucker said there was danger in assuming that today’s trends, whatever they are, will continue into the future. …He was not saying that the planner should forget the past, but rather that one should not assume that the past or present would continue in the future. Peter wanted us to focus on future goals first. Then consider what we face today and take the necessary actions that will point us toward reaching those goals in the future. As we progress, the environment and conditions are going to change. We can’t predict these changes. In fact, if we hold to those initial actions and stay the course, we’re never going to reach the future we are intent on creating. However, we can and must take new actions to enable us to make progress toward and reach these future goals.”

p. 132 “As Peter often said, you can’t predict your future, but you can create it. Quit worrying about your future environment. No one can predict it. Especially don’t focus on why you can’t do something. Instead, decide what your objectives are, look at the resources you need, and do a situational analysis. Then go from there and take action. Others have created their futures, and so can you!”

2. The key question: Why do some companies thrive, in uncertainty, even chaos, and others do not?

p. 2 “…some companies and leaders navigate this type of world exceptionally well. They don’t merely react; they create. They don’t merely survive; they prevail. They don’t merely succeed; they thrive. They build great enterprises that can endure. We do not believe that chaos, uncertainty, and instability are good; companies, leaders, organizations, and societies do not thrive on chaos. But they can thrive in chaos.”

3. The answer to the key question of thriving in uncertainty is: 10X Leadership.

p. 13 – 18 A look at two leaders…

In 1911 there were two teams in a race to get to the South Pole first. Roald Anumdsen and his team were the winners and Robert Falcon Scott and his team were the losers. Anumdsen with all his planning started late in the race and still won and brought the whole team back. Scott started first, arrived second to the Pole and he and the whole team died on the way back. Anumdsen was the 10X leader. (Which are you?)
The parts of 10X Leadership…a humble but ambitious leader and three core behaviors…

Start with a “Level 5 Ambition” – this is a concept from the earlier book Good to Great. A “Level 5 Leader” is a leader who builds enduring greatness (into their organization) through a paradoxical blend of humility and professional will. Level 5 ambition is the strong well to make the organization better. Level 5 Ambition is a passion and an ambition for a cause or company larger than themselves. They have egos but their egos are channeled into their companies for their purposes and not for personal aggrandizement.

The leader develops the habit of “Fanatic Discipline.” For Anumdsen this was his commitment to the daily “20 Mile March.” Anumdsen moved forward to the Pole and back in daily segments of 20 miles. Even when they could move more than 20 miles in a day, they did not; Anumdsen did not want to get people over tired. Fanatic discipline is the issue of “consecutive performance.” The 20 Mile March for them was not an average. It was the purposed choice that this team will move 20 miles toward the Pole every day. “Fanatic discipline” 10Xers display extreme consistency of action-consistency with values, goals, performance standards and methods. They are utterly restless, monomaniacal, unbending in their focus on their quests.”

The leader develops the habit of “Empirical Creativity.” Anumdsen lived with Eskimos before his race to the Pole to learn from them about long journeys over the ice. The Eskimos had the empirical learning. They taught him that dog sleds were the answer. Scott tried motor cycles and horses and ended up having his team “man haul” the sleds. In honing in on a target, shoot a bullet to learn the distance and arc needed and then shoot your cannonballs. Target in on your target, before you give it the final big shot. Creativity must be joined with the reality of the empirical evidence. Empirical creativity: When faced with uncertainty, 10Xers do not look primarily to other people, conventional wisdom, authority figures, or peers for direction; they look primarily to empirical evidence. They rely on direct observation, practical experimentation, and direct engagement with tangible evidence. They make bold, creative moves for a sound empirical base.

The leader develops the habit of “Productive Paranoia.” They are conservative, and plan for the hard, down times. They provide reasonable reserves. Productive paranoia: 10Xers maintain hyper-vigilance, staying highly attuned to threats and changes in their environment, even when—especially when—all’s going well. They assume conditions will turn against them, at perhaps the worst possible moment. They channel their fear and worry into action, preparing, developing contingency plans, building buffers, and maintaining large margins of safety.

4. Fanatic Discipline.

p. 21 – 22 “10Xers are utterly relentless, monomaniacal even, unbending in their focus on their quests. They don’t overreact to events, succumb to the herd, or leap for alluring—but irrelevant—opportunities. They’re capable of immense perseverance, unyielding in their standards yet disciplined enough not to overreach. In our research-team discussions we struggled with how to best describe the discipline we found in the 10X leaders. Most business CEOs have some level of discipline, but the 10Xers operated on an entirely different level. The 10Xers, we concluded, weren’t just disciplined; they were fanatics.”

p. 23 “…all the 10Xers we studied, were nonconformists in the best sense. They started with values, purpose, long-term goals, and severe performance standards; and they had fanatic discipline to adhere to them. If that required them to diverge from normal behavior, then so be it. They didn’t let external pressures, or even social norms, knock them off course, In an uncertain and unforgiving environment, following the madness of crowds is a good way to get killed.”

p. 39 – 69 The concept of the “20 Mile March” The concept of the 20 Mile March is a concept of steady progress toward a goal. It is the idea of a very disciplined approach to moving forward. The book shows many examples to include John Brown who walked across America at 20 miles a day; and Amundsen moving toward the South Pole. When conditions were hard, Amundsen pushed his men to make 20 miles, when conditions were better and they could do more than 20 miles, they still only went 20 miles to stay rested and stay on plan.

p. 45 “The 20 Mile March is more than a philosophy. It’s about having concrete, clear, intelligent, and rigorously pursued performance mechanisms that keep you on track. The 20 Mile March creates two types of self-imposed discomfort: (1) the discomfort of unwavering commitment to high performance in difficult conditions, and (2) the discomfort of holding back in good conditions.”

p. 48 – 49 Elements of a good 20 Mile March
• Uses performance markers that delineate a lower bound of acceptable achievement. These keep pushing you forward
• Has self-imposed constraints that create an upper bound for how far you’ll march when conditions are good
• Is tailored to the enterprise and its environment. The 20 Mile March will be different for each organization
• It lies largely within your control to achieve. You shouldn’t need luck to achieve your 20 Mile March
• It has a “Goldilocks time frame,” it is not too short or too long, but just right
• It is designed and imposed by the enterprise, not imposed from the outside or blindly copied from others
• It must be achieved with great consistency

p. 55 “Accomplishing the 20 Mile March, consistently, in good time and bad, builds confidence. Tangible achievement in the face of adversity reinforces the 10X perspective: we are ultimately responsible for improving performance. We never blame circumstance; we never blame the environment.”

p. 64 “We live in a modern culture that reveres the Next Big Thing. It’s exciting, fun to read about, fun to talk about, fun to write about, fun to learn about, and fun to join. Yet the pursuit of the Next Big Thing can be quite dangerous if it becomes an excuse for failing to 20 Mile March. If you always search for the New Big Thing, that’s largely what you’ll end up doing—always searching for the Next Big Thing.”

p. 65 “A 20 Mile March needn’t be financial. You can have a creative march, a learning march, a service-improvement march, or any other type of march, as long as it has the primary characteristics of a good 20 Mile March.”

5. Empirical Creativity.

p. 25 “Social psychology research indicates that at times of uncertainty, most people look to other people—authority figures, peers, group norms—for their primary cues about how to proceed. 10Xers, in contract, do not look to conventional wisdom to set their course during times of uncertainty, nor do they primarily look to what other people do, or to what pundits and experts say they should do. They look primarily to empirical evidence.”

p. 25 – 26”The point here is not to be contrary and independent just for the sake of being contrary and independent. The point is to be more empirical to buttress your mental independence and validate your creative instincts. By ‘empirical,’ we mean relying upon direct observation, conducting practical experiments, and/or engaging directly with evidence rather than relying upon opinion, whim, conventional wisdom, authority, or untested ideas. Having an empirical foundation enables 10Xers to make bold, creative moves and bound their risk.”

p. 26 “The 10Xers did not generally make bolder moves than their less successful comparisons; both groups made big bets and, when needed, took dramatic action. Nor did the 10Xers exude more raw confidence than the comparison leaders…But the 10Xers had a much deeper empirical foundation for their decisions and actions, which gave them well-founded confidence and bounded their risk.”

p. 69 – 98 Fire Bullets, Then Cannonballs. The way to be innovative is to fire bullets first, get on target and then fire a cannonball at the target.

p. 73 – 75 “The evidence from our research does not support the premise that 10X companies will necessarily be more innovative than their less successful comparisons. And in some surprise cases… the 10X companies were less innovative. …We concluded that each environment has a level of ‘threshold innovation’ that you need to meet to be a contender in the game; some industries, such as biotechnology, command a high threshold. Companies that fail even to meet the innovation threshold cannot win. But—and this surprised us—once you’re above the threshold, especially in a highly turbulent environment, being more innovative doesn’t seem to matter very much.”

p. 80 “…a key pattern we observed in this study: fire bullets, then fire cannonballs. First, you fire bullets to figure out what’ll work. Then once you have empirical confidence based on the bullets, you concentrate your resources and fire a cannonball.
After the cannonball hits, you keep 20 Mile Marching to make the most of your big success.”

p. 81 What makes a good bullet? A bullet is low cost / A bullet is low risk / A bullet is low distraction

p. 83 Ready, aim, fire! Not: Ready, fire, aim.
• Fire bullets
• Assess: Did your bullets hit anything?
• Consider: Do any of your successful bullets merit conversion to a big cannonball (a big risk)?
• Convert: Concentrate resources and fire a cannonball once calibrated
• Don’t fire uncalibrated cannonballs
• Terminate bullets that show no evidence of eventual success

p. 96 “There are two types of cannonballs, calibrated and uncalibrated. A calibrated cannonball has confirmation based on actual experience—empirical validation—that a big bet will likely prove successful. Launching an uncalibrated cannonball means placing a big bet without empirical validation.”

A modern day story of fire bullets first and then cannonballs is the now amazingly successful Apple stores. Steve Jobs and his team built a full sized store at their headquarters before rolling out their retail stores. They worked and reworked every detail of the stores in the model, they worked until they were satisfied with every detail, several times rolling back deadlines because it still was not right. Then, when it was exactly what they wanted, they rolled out the stores to their amazing success.

6. Productive Paranoia.

p. 27 “…despite their empirical confidence, 10Xers never feel safe or comfortable; indeed, they remain afraid—terrified, even—of what the world can throw at them. So, they prepare to meet head-on what they most fear…”

p. 29 “10Xers differ from their less successful comparisons in how they maintain hypervigilance in good times as well as bad. Even in calm, clear, positive conditions, 10Xers constantly consider the possibility that events could turn against them at any moment. Indeed, they believe that conditions will—absolutely, with 100 percent certainty—turn against them without warning, at some unpredictable point in time, at some highly inconvenient moment. And they’d better be prepared.”

p. 30 “Productive paranoia isn’t just about avoiding danger, trying to find the safest and most enjoyable path through life; 10Xers seek to accomplish a great objective, be it a goal, a company, a noble ambition to change the world, or a desire to be useful in the extreme. Indeed, as an overall life approach, they worry not about protecting what they have, but creating and building something truly great, bigger than themselves…”

p. 99 – 124 Leading above the “Death Line”

p. 103 “Hitting the ‘Death Line’ means that the enterprise dies outright or becomes so damaged that it can no longer continue with the quest to become an enduring great company.”

p. 103 The three core practices of “Productive Paranoia,” of “Leading above the ‘Death Line’ (staying alive and viable)
• Productive Paranoia 1: Build cash reserves and buffers, to prepare for unexpected events and bad luck before they happen.
• Productive Paranoia 2: Bound risk—Death Line risk, asymmetric risk, and uncontrollable risk—and manage time-based risk. Don’t take these kinds of risks.
• Productive Paranoia 3: Zoom out, then zoom in, remaining hypervigilant to sense changing conditions and respond effectively.

p. 107 “Death Line risks are those that could kill or severely damage the enterprise. Asymmetric risks are those for which the potential downside is much bigger than the potential upside. Uncontrollable risks are those that expose the enterprise to forces and events that it has little ability to manage or control.”

p. 105 “10Xers remain productively paranoid in good times, recognizing that it’s impossible to consistently predict specific disruptive events, they systematically build buffers and shock absorbers for dealing with unexpected events. They put in
place their extra oxygen canisters long before they’re hit with a storm.”

p. 109 “In short, we found that the 10X companies took less risk than the comparison cases. Certainly, the 10X leaders took risks, but relative to the comparisons in the same environments, they bounded, managed, and avoided risks. The 10X leaders abhorred Death Line risk, shunned asymmetric risk, and steered away from uncontrollable risk.”

p. 111 “Sometimes acting too fast increases risk. Sometimes acting too slow increases risk. The critical question is, ‘How much time before your risk profile changes?’ Do you have seconds? Minutes? Hours? Days? Weeks? Months? Years? The primary difficulty lies not in answering the question but in having the presence of mind to ask the question.”

p. 114 “We adopted the terms zoom out and zoom in to capture an essential manifestation of productive paranoia, a dual-lens capability. 10X leaders remain obsessively focused on their objectives and hypervigilant about changes in their environment; they push for perfect execution and adjust to changing conditions…In practice, it works like this:

Zoom Out
(First, get the big picture of the coming change)
Sense a change in conditions
Assess the time frame: How much time before the risk profile changes?
Assess with rigor: Do the new conditions call for disrupting plans?
If so, How?


Zoom In
(Second, create and execute the plan that the big picture dictates)
Focus on supreme execution of plans and objectives

p. 122 – 123 “Contrary to the image of brazen, self-confident, risk-taking entrepreneurs who see only upside potential, 10X leaders exercise productive paranoia, obsessing about what can go wrong. They ask questions like: What is the worst case scenario? What are the consequences of the worst-case scenario? Do we have contingencies in place for the worst case scenario? What is the upside and what’s the downside of this decision? What’s the likelihood of the upside and the downside? What’s out of our control? How can we minimize our exposure to forces we can’t control? What if? What if? What if?”

7. Level 5 Ambition. The high value of consistency.

p. 31 “…10Xers channel their ego and intensity into something larger and more enduring than themselves. They’re ambitious, to be sure, but for a purpose beyond themselves, be it building a great company, changing the world, or achieving some great object that’s ultimately not about them.”

p. 33 “The central question is, ‘What are you in it for?’ 10X leaders can be bland, or colorful, uncharismatic or magnetic, understated or flamboyant, normal to the point of dull or just flat-out weird—none of this really matters, as long as they’re passionately driven for a cause beyond themselves. …every 10Xer we studied aimed for much more than just ‘becoming successful.’ They didn’t define themselves by money. They didn’t define themselves by fame. They didn’t define themselves by power. They defined themselves by impact and contribution and purpose. ”

p. 125 – 148 “SMaC” Recipes. SMaC = Specific. Methodical. Consistent. / Keeping the recipe for our “secret sauce” consistent in the face of change.

p. 128 “We on the research team used to believe in an inevitable tradeoff between specificity and durability: if you want to have durable precepts to live by, they need to be more general, like core values or high-level strategy; but if you want specific practices, they need to change frequently as conditions change, like tactics. Yet it is possible to develop practices that are both specific and durable—SMaC practices.”

p. 129 “The clarity and specificity of a SMaC recipe helps people keep their bearings and sustain high performance when in extreme conditions.”

p. 134 The problem is not change, but dumb change. “Conventional wisdom says that change is hard. But if change is so difficult, why do we see more evidence of radical change in the less successful comparison cases? Because change is not the most difficult part. Far more difficult than implementing change is figuring out what works, understanding why it works, grasping when to change, and knowing when not to.”

p. 136 “When faced with declining results, 10Xers do not first assume that their principles and methods have become obsolete. Rather, they first consider whether the enterprise has perhaps strayed from its recipe, or has forgone discipline and rigor in adhering to the recipe. If so, they see the remedy in reconnecting with the underlying insights behind the recipe and reigniting passion for adhering to it. They ask, ‘Is our recipe no longer working because we’ve lost discipline? Or is it no longer working because our circumstances have fundamentally changed?’”

p. 138 “We’ve found in all our research studies that the signature of mediocrity is not an unwillingness to change; the signature of mediocrity is chronic inconsistency.”

p. 139 Change. “The amount of change swirling about is both gigantic and, for most people, accelerating. If we tried to react to every single external change, we’d quickly find ourselves incapacitated. Most change is just noise and requires no fundamental change in ourselves.
“Yet some change is not noise, demanding that we adjust and evolve, else we face demise, catastrophe, or missed opportunities. A great company must evolve its recipe, revising selected elements when conditions merit, while keeping most of its recipe intact.”

p. 141”The Intel case illustrates a powerful ‘Genus of the AND.’ On the one hand; a great company changes only a small fraction of the SMaC recipe at any given time, keeping the rest of it intact. On the other hand, this isn’t ‘incremental’ change; a SMaC recipe change is, almost by definition, a hugely significant change. By grasping this point, a 10X enterprise can achieve significant change and extraordinary continuity, both at the same time.”

p. 190 – 191 Examples of the “Genius of the AND:” Disciplined And Creative / Empirical validation And Bold moves / Prudence And BHAGs (Big Hairy Audacious Goals) / Paranoid And Courageous / Threshold innovation And One fad behind / Cannot predict the future And Prepared for what they cannot predict / Zoom Out And Zoom In / Consistency And Change

p. 146 “ Changes to a solid and proven SMaC recipe are like amendments to the Constitution; if you get the recipe right, based on practical insight and empirical validation it should serve you well for a very long time; equally important, fundamental changes must be possible. Continually question and challenge your recipe, but change it rarely.”

8. Return on Luck (ROL). What role does luck play in all of this? Answer: Very little.

p. 149 – 180 The research team looked at the issue of luck. They wondered if luck played any part in the success of the 10X companies. They set out to answer 3 questions:
• Is luck a common or rare element in the histories of the 10X and comparison cases?
• What role, if any, does luck play in explaining the divergent trajectories of the 10X and comparison cases?
• What can leaders do about luck to help them build great companies on a 10X journey?

p. 154 “We define a luck event as one that meets three tests: (1) some significant aspect of the event occurs largely or entirely independent of the actions of the key actors in the enterprise, (2) the event has a potentially significant consequence (good or bad), and (3) the event has some element of unpredictability.”

p. 158 “All the companies had good luck and bad luck—luck happens, a lot—but does luck play a differentiating role, an explanatory role, a definitive role in creating 10X success?” (No)

p. 160 “Adding up all the evidence, we found that the 10X cases were not generally luckier than the comparison cases. The 10X cases and the comparisons both got luck, good and bad, in comparable amounts. The evidence leads us to conclude that luck does not cause 10X success. People do. The critical question is not ‘Are you lucky?’ but ‘Do you get a high return on luck?’”
p. 161 “We tend to think of luck as a ‘what’ variable—the plane flies by at the right moment, your IPO becomes much more successful than expected, etc. but one of the most significant forms of luck comes not as ‘what’ but in the form of who. In a family business, for example, there’s a significant amount of luck in whether a son or daughter has the right stuff to lead a company to greatness…
“This research project began with the premise that we live in an environment of chaos and uncertainty. But the environment doesn’t determine why some companies thrive in chaos and why others don’t. People do. People are disciplined fanatics. People are empirical. People are creative. People are productively paranoid. People lead. People build teams. People build organizations. People build cultures. People exemplify values, pursue purpose, and achieve big hairy audacious goals. Of all the luck we can get, people luck—the luck of finding the right mentor, partner, teammate, leader, and friend—is one of the most important.”

The moral of the story: Get the right people on the bus.

p. 163 “The difference between Bill Gates and similarly advantaged people is not luck. Yes, Gates was lucky to be born at the right time, but many others had this luck. And yes, Gates was lucky to have the chance to learn programming by 1975, but many others had this same luck. Gates did more with his luck, taking a confluence of lucky circumstances and creating a huge return on his luck. And this is the important difference. …Thousands of people could have done the exact same thing as Gates, at the exact time, but they didn’t.”

p. 165 – 166 “Neither extreme—it’s all luck or luck plays no role—has the evidence on its side. A far better fit with the data is a synthesizing concept, return on luck.
“Getting a high return on luck requires throwing yourself at the luck event with ferocious intensity, disrupting your life, and not letting up. Bill Gates didn’t just get a lucky break and cash in his chips. He kept pushing, driving, working—staying on a 20 Mile March; firing bullets, then big calibrated cannonballs; exercising productive paranoia to avoid the Death Line; developing and amending a SMaC recipe; hiring great people; building a culture of discipline; never deviating from this monomaniacal focus—and sustained he efforts for more than two decades. That’s not luck; that’s return on luck.”

p. 167 “The AMD story illustrates a common pattern we observed in the comparison companies during their respective eras of analysis, the squandering of good luck. When the time came to execute on their good fortune, they stumbled. They didn’t fail for lack of good luck; they failed for lack of superb execution.”

p. 169 “…10Xers shine when clobbered by setbacks and misfortune, turning bad luck into good results. 10Xers use difficulty as a catalyst to deepen purpose, recommit to values, increase discipline, respond with creativity, and heighten productive paranoia. Resilience, not luck, is the signature of greatness.”

p. 172 “There’s an interesting asymmetry between good luck and bad luck. A single stroke of good luck, no matter how big the break, cannot by itself make a great company. But a single stroke of extremely bad luck that slams you on the Death Line, or an extended sequence of bad-luck events that creates a catastrophic outcome, can terminate the quest.”

p. 173 “…10Xers exercise productive paranoia, combined with empirical creativity and fanatic discipline, to create huge margins of safety. If you stay in the game long enough, good luck tends to return, but if you get knocked out, you’ll never have the chance to be lucky again. Luck favors the persistent, but you can persist only if you survive.”

p. 174 “The essence of ‘managing luck’ involves four things: (1) cultivating the ability to zoom out to recognize luck when it happens, (2) developing the wisdom to see when, and when not, to let luck disrupt your plans, (3) being sufficiently well-prepared to endure an inevitable spate of bad luck, and (4) creating a positive return on luck—both the good luck and bad—when it comes. Luck is not a strategy, but getting a positive return on luck is.”

9. Epilogue.

p. 183 “We are not imprisoned by our circumstances. We are not imprisoned by the luck we get or the inherent unfairness of life. We are not imprisoned by crushing setbacks, self-inflicted mistakes or our past success. We are not imprisoned by the times in which we live, by the number of hours in a day or even the number of hours we’re granted in our very short lives. In the end, we can control only a tiny sliver of what happens to us. But even so, we are free to choose, free to become great by choice.”

How do I measure success?

John D. Rockefeller was famously once asked, Mr. Rockfeller, how much money is enough? Without missing a beat the titan replied, “Just a little bit more.” That led me to start thinking about how do we actually measure success and when should we allow ourselves to feel that we have actually achieved something. I expect my focus for my entire professional career will be on building companies and entrepreneurship. In the field of growing companies it’s often seen as simple to define success – he who dies with the most money wins. When I was twenty and I started working at SSB the seemed like the right definition, in line with glossy celebrity magazines and the great American dream. Ten years later, though, it seems like the situation seems is more complex than that.

The simple truth seems to be that no matter how much money you have there will always be someone with more. Say your goal is to be the world’s richest person. In this day and age the most you can hope to do is hold that title for a period of time riding the markets exuberant valuation of your company to the top spot. Inevitably, though, you lose the position and someone with more toys at the time takes it over.

It strikes me that that the creation of an enterprise that creates a Croesusian level of wealth is something that occurs principally as a matter of luck where the unique skill of an individual, which is important, meets the proper market environment which is orders of magnitude more important. Bill Gates would be lost to history if he was born five years earlier or later. You would have no idea who Marc Andreessen is if he hadn’t been in the right place at the right time. Mark Zuckerberg would be another random guy from Harvard if the idea of Facebook hadn’t come his way while Friendster – remember that – and MySpace were vulnerable. This is in no way to take away from the efficacy of these company builders – it’s simply to help divide between the factors they control and factors they do not. This is in line with the fundamental attribution error which states that people tend to over value personality-based explanations and under value situational explanations for something.

What’s more, the distribution of wealth is clearly not merit based. A monarch of an oil rich state – through very little personal skill – has more wealth than I can ever hope to amass. Children of wealthy parents tend to be wealthy be virtue of the fact that they start out with far more opportunity. In the same way, the golden tickets of being born (i) American, (ii) into an upper-middle class family and (iii) smart are in no way based on any work that I have done. Clearly, how hard I work in my substantive professional years has an impact on my success. That said, factors that I in no way control have at least an equal if not greater impact on my success.

Given all that, the question becomes what do I choose to measure my success? What is a measure that I can use that accounts for the things I control and discounts the things that I do not? The goal is to define success in a way that allows me to measure whether I am achieving my full potential in the context of my life. It should not wait factors that are principal matters of luck but should ensure that – if I get lucky – I am well positioned to take advantage of that luck.

2012 Life Goals


  • Work out five days a week – Monday, Wednesday, Friday, Saturday, Sunday
  • Maintain weight under 180 lbs


  • Eat a diet of less refined items including, sadly, Diet Coke and focus on more natural items
  • Take fewer drugs and over the counter medicines – focus on the few items that have real benefit
  • Make sure I get enough healthy fats in the form of fish or supplements
  • Be good to my bones– Get enough calcium and vitamin D and drink less soda
  • Drink the same amount more often – a few drinks several times a week – moderate daily drinking has a positive health benefit


  • Take a picture of baby girl everyday
  • Develop at least one family hobby
  • Go on a date with my wife at least once a month
  • Take a trip at least once a quarter with the family


  • Execute the plan for 2012
  • Hit 6M in revenue run rate before the fourth quarter of the year
  • Secure SSB’s position as lead software and services provider in accessibility market
  • Grow laterally into development services market and prepare for movement into secondary compliance domains – SEO as a primary starting point
  • Define an M&A plan to complement the organic growth plan

2012 Packing List

Oh yeah, this is what I pack when I go on a trip.


  • Workout Shorts (3)
  • Workout Shirts – White (2), Black (1)
  • Headbands!!!
  • Athletic Socks (3)
  • Boxers (5)
  • T-shirts – White (2)
  • Jeans (1)
  • T-Shirts (3)
  • Polo Shirt (2)
  • Sweater (1)
  • Shorts (1)
  • Pants (1)
  • Belt
  • Tennis Shoes
  • Flip Flops

Meeting Clothes

  • Dress Shirt
  • Dress Pants
  • Dress Shoes
  • Dress Socks
  • Tie
  • Jacket


  • Dopp Kit
  • Heart Rate Monitor
  • iPhone Charger
  • Kindle Charger
  • Laptop Charger
  • Workout Headphones


  • Laptop and Kindle
  • Noise Cancelling Headphones
  • Office and House Keys

Note: Shorts and a jacket work better than yoga pants. Jeans are not a great way to go especially long flights.

Flow – The Psychology of Optimal Experience – Book Notes


  • The concept is that we are all seeking to be happy
  • Being happy is about being in flow
  • Flow is state that comes ensues when you lose sense of time and feelings external to what you are doing.
  • Getting into the flow requires you to engage in self-controlled, goal-related, meaningful actions
  • The question is how we acheive that state of flow on an ongoing basis
  • Flow comes about from an active control and directing of conciousness
  • Training and practice in controlling your conciousness in these routes is what makes the flow possible on an active basis

The Anatomy of Conciousness

  • Consiousness is the combination of concious events (sensation, feelings, thoughts, emotions) our perception of them and our reaction to them
  • Intentions are the directions that conciousness takes – like if we are aware of feeling hungry we can form an attention to get food and our conciousness order itself around that intention
  • Intentions tend to be ordered in heirarchy and the self is just the set of heirarchies we carry around with us based on life experience. For example my self wants to have a comfortable house, success at work and a loving wife. Those intentions then form sub-intentions – go to work, have a good job, buy flowers for the wife, etc.
  • Attention can be thought of as the energy we expand to shape conciousness
  • Anxiety, pain, rage or jealousy generally can be thought of as disorder in the conciousness, turbulence in the flow or psychic entropy. They occur when we get information that conflicts with or keep us from carrying out our current set of intentions – acting on our self.
    • As an example think about something that is worrying you. The worry is caused by a violation – current or anticipated – of your self. The worry goes away when this violation is reconciled.
  • Order in conciousness means a lack of turbulence or psyhic entropy thus flow.

Enjoyment and the Quality of LIfe

There are two main ways to improve the quality of life:

  • Bring external conditions inline with internal goals.
  • Change the way we experience external conditions to make them fit our goals better.

For example if you desire a greater sense of security you can (i) buy an alarm system or a gun of (ii) accept that the world is an insecure and uncertain place as part of your definition of security. Neither approach should be used exclusively and both are valid at certain times and places – wisdom in knowing the difference.

Ultimate Sales Machine – Book Notes


  • Market Influencers – The people in the market who influence overall purchasing – bear specific attention and focus and should be part of their own ongoing marketing campaign
  • After you understand all the challenges that a customer is facing in the market a great segue to your solution is something like, “Those challenges come up a lot with our other clients. That’s one of the reasons we are conducting this research. In fact the findings were so overwhelming that we put together an executive briefing on them. Let me talk you through some of that data. If you don’t have time now we can schedule some time to follow-up.”
  • Ask a sales person to present something to you as part of the interview process. Give them a slide with bullet points and talking points, ten minutes to prep, and then see how they do
  • Setup a sales skill teleconference ounce a week to role-play, share strategies and updates for team members
  • A good option is to offer a free report but not be specific that the free report is actually a presentation. When talking to a customer that transition would be something like “Oh, you thought it was a report that we send over? No, it’s actally much better than that. If we just sent you a report with a few hundred pages you probbaly wouldn’t read it. So to go the extra mile we hired a graphics firm and had the data built out into a orientation we present live in your office. It’s packed with great information and graphics to illustrate points – it’s a great experience and everyone we show it to is impressed. The last few presentations to Named copmany, named company have all loved it….”

Chapter 4 – Becoming a Brilliant Strategist

  • Strategy is long term plan to acheive a long term gain – like having customers generate a set amount of revenue year-over-year
  • Tactics are the short term activities require to acheive a short term gain – like driving a single sales to close
  • The critical executive shows a mix of both strategy and tactics
  • Good tactics closes a sales once – good strategy causes a sale to occur again and again
  • This means focusing on educating the customer and helping them across the entire life of potential buying – not just when they are ready to buy
  • Educating the customer allows us to set the customers buying criteria – which allows us to define our solution as the best solution
  • The Stadium Pitch or Core Story
    • If you had to pitch to a stadium of your potential prospects what would you say?
      • How not to get sued by blind people
    • Generally your market will be split up into a set of people where
      • 3% buying now
      • 7% open to it
      • 30% not thinking about it – not averse, just don’t care now
      • 30% don’t think they are interested
      • 30% know they are not interested
    • Goal is to develop a sales structure that allows you to address all of those people in the initial hit
  • Education based marketing
    • Offers something of value to the buyer
    • If the information is good repositions you in the mind of the buyer as the expert
    • If the content is developed with an eye towards positioning it can sell your services far better than a straightforward sales process
  • When you sell you break rapport – when you educate you build it
  • Benefits of education based selling and the stadium pitch
    • Easier to get appointments with clients
    • Makes you relevant to just about anyone including the 90% not buying now
    • Establishes you as an expert and makes your credible
    • Makes any sales material that follows more credible
    • Allows us to define the buying criteria in a way that makes us unique and compelling
    • Makes people want to give us something of value (Reciprocity)
    • Can create a moral obligation to pursue accessibility
    • Said everything that top management would want the rep to say and know
    • Makes the reps smarter and drives insight into the business
  • The stadium pitch should do all of the above
  • The data that makes up the stadium pitch
    • Should be the core of all your marketing or your core story
    • Should shift all the buying criteria in your favor
  • Building the core story
    • Market data is way more important than product data
    • Market data is the core of the stadium pitch and defines why your product is important
    • The smoking gun is the one thing that makes your product unique and compelling amongst all the others
    • Look at how the data is changing over time and the speed of change – those are the compelling story items

Chapter 5 – Hiring Superstars

  • Think about what hiring one superstar sales person would do for the company. How much faster could you grow?
  • Put the highest possible number people can earn in your add (Compensation plan starting at 120K)

What makes a superstar

  • Key is finding the right personality profile
  • DISC profile – Dominance, Influence, Steadiness, Compliance
    • Dominance – Strength of personal ego, drive for control and how well you assert yourself in situations. Generally we are looking for high dominance individuals
    • Influence – How well you communicate and interact in social situations
    • Steadiness – Consistency in actions
    • Compliance – HOw you relate to structure and organizations
  • A superstar tends to display high influence and dominance
  • We can train around weaknesses in personality traits but the goal would be to not need to train around them
  • Note – Expect to get rejected an average of eight times before someone says yes
  • Look for agressive behavior in interviews – they are selling themselves as the product

Guidelines for Hiring

  • Build an ad that is agressive – asking for superstars only
  • List the blunt amount of money you can make in the role
  • Age and background are not relevant – its about pesonality fit and intelligence
  • Do a phone screen and immediately reject people to see if they push back
  • The interview
    • Relax – Get them feeling comfortable and relaxed
    • Probe – Check into their background and see what shaped them
      • This can be legally tricky so you need to get their permission to do this
      • If the job is about personality and they agree that personality is what shapes them than you can talk through this area
      • Focus on people that have had blindly encouraging parents – be one yourself
      • People with high Influence (empathy) will open up well in this phase because they love to bond
    • Attack – Tell them they don’t have the job because they are a superstar. If they crumble they probably aren’t the right person for the job. If they come back – hire them.
  • Sales is like a competition and the strong should survive and thrive and the weak should be moved to customer service

Rewarding your superstar

  • Set a low base pay and a high incentive plan
  • Give the superstars a blow out package if they knock past their numbers
  • Jump on your desk and tell them that God orders them to stay at your company
  • Put together a recruiting document showing people how much money they can earn over a few years
  • They work hard and sell well they make money
  • Setup incentives such that people keep being focused on new business
  • Build out a compensation plan that shows how much money people can earn over a long period of time
  • People will build the company for you as long as there is money to pay them

How to Manage a Superstar

  • Compliment them on what they are doing
  • Constantly challenge them to do better

A note on all hires

  • YOu can use the Relax, Probe, Attack technique for all positions – not just sales. For the attack you would go a little softer but since we are curious about how people respond to adversity we want to see if they will sell themselves or just wilt
  • Structure all income around performance and reward those who do the best

Final Notes

  • Accept the fact that the best hiring process will have some duds and focus on hiring quickly and firing those that don’t work out quickly. Once you get the right people keep them on board and satisfied

Chapter 6 – The High Art of Getting the Best Buyers

  • Best buyers are simply your ideal clients – they buy more, faster and more often than any other customers
  • Create your target list of 100 dream acconts and target them relentlessly
  • Use social proof to demonstrate that other top accounts in the industry are viewing this
    • We are in the process of showing this to X,Y,Z companies and wanted to make sure you have it
  • Use FUD as a motivator to drive action
  • Go to the highest executive with budget possible
  • Only target customers on the dream list similar to those customers that are spending large amount of money with you
  • You can add in a screening step to the campaign that determines the need of the client. For example, if you are selling computers just call the receptionist and ask what kind of computer they are using. The corollary in are world would be checking the website and seeing if it has an accessibility section on it.
  • If you keep persistently marketing to the organization they will eventually feel obligated to give you business
  • Dream neighborhoods are the business to consumer corollary where you consistently target a specific neighborhood
  • Dream affiliates are the channel marketing equivalent where you consistently target a specific channel partner
  • Who sells to the same customer you sell to that can increase your sales?
  • Decide who you want to go after and then put in the time and energy to get them

Dream Buyer Management

  • How are you going to treat your dream customers so they feel like dream customers?
  • What are things you can do to make them feel special?
  • As a specific objective of serving these accounts you should see if they are comfortable referring you to other customers

7. The Seven Musts of Marketing

  • Stacked Marketing – The concept that you should have a consistent message, look, theme and slogan throughout all your marketing materials


Rules for creating good ads

  • It Must Be Distinctive – There has to be something out of the ad that stands out and demands attention
  • Capture Attention with a Screaming Headline
    • Tell me what you want to tell me in 3.2 seconds
  • After your headline hooks them you body copy has to keep them reading
    • Focus on them instead of yourself (see above)
  • Include a call to action
    • Provide a reason for them to act in a timely fashion
    • Define some scarcity reason for them to respond – limited time or quantity
    • Provide a low invasive way for them to respond like a form, coupon to return with data or business card to drop
  • Other Advertising Insights
    • You can use one ad many times – like by taking out a full page add in Forbes which you then send to all your customers with a post it note indicating the page and a location in your booth at tradeshows

Direct Mail

  • Basically this is a good augment to the core activities you are doing. They rules for writing good direct mail pieces can be found in wild detail in other places and aren’t covered here. Conceptually, though, the direct mail pieces are useful to augment and extend sell through rates to your already targeted prospects

Corporate Literatre

  • Principal issue is that this should be consistent with all your other marketing pieces using the data in your stadium pitch, graphics in your presentations, etc.
  • Your corporate literature is a distillation of the core items in your stadium pitch – so think of this as the leave behind after the initial presentation that you provide to the prospects
  • Use color and graphics! Plain text is boring
  • Make sure you hvae a catchy headline and body copy follows

Public Realtions

  • PR covers outbound articles, getting stories placed in magazines and related activities
  • Writing articles consistent with your overall marketing theme and then working to get them placed in industry and trade group presentations is a great way to grow your overall organization’s brand awareness
  • Ensuring that all these articles have interesting information and analysis is the key to getting them picked up
  • Don’t make the article about you – make the article abou the topic at hand and subtley include your points
  • Building relationships with newspapers is the same as building relationships with any other prospect. Executing a consistent, specific campaign is the best rote to yielding results
  • Stories about you (clients you have one, contracts you have placed) are uniteresting to PR placements
  • stories about topics that are generally relevant are interesting as they relate to the readers interests not your interests
  • As with the core story focus on the data and compelling large amounts of disconcerting data that drive the interest of the story to be read
  • Speaking engagements at industry activities fit the same profile. Create presentations and stories that are of interest to the individuals in the conference audience and your papers are far more likely to be picked up for presentation

Personal Contact

  • The most powerful time and to sell and impact clients

Trade Shows and Market Education

There are fundamentally three rules of success at a tradeshow

  • Get Noticed – Do something that makes your booth stand out – like a referee theme or all Hawaiian shirts
  • Drive Traffic – Get people to come by the booth – e.g. offer a free trip to Hawaii and serve Hawaiian drinks
  • Capture Leads – To have people enter the free give away have them drop a business card and complete a fill in the blanks questionaire that provides your qualifiying criteria
  • Tradeshow and themed events should be fun – after all would you go to a lame event?
  • Awards ceremonies for your industry give you a chance to spotlight all the high acheivers in your space
  • Sponsor a conference for the market, charging for attendance where you own the schedule

Marketing Weapon 7 – The Internet

  • Provide a soft yes – an single, easy directed first step for getting marketing – in our world this is AMP Express
  • Provide information of value to your prospects and community on the site – clearly a mistake we learned from at SSB

Capter Eight – The Eyes Have It

  • Products and concepts communicated with both audio and visual information have a much higher stick than those just spoken about
  • Use color to denote information as well – certainly colors have certain primary meanings
  • Pictures of people tend to work well because people are the most familiar image to us
  • Determine which of your sales points is a key point to communicate and then develop a graphic to communicate that accordingly

Rules for effective presentation

  • KISS – Keep it simple, stupid – Headin and four points per slide
  • KIFP – Keep it fast paced – Two to three panels a minte – keep new information coming on the screen about every fifteen seconds. Especially a critical item in webinars to keep people from multi-tasking
  • Use WOW facts and statistics – Start with wow facts early on to hook in the prospect and reinforce them with graphics
    • Remeber – Market data is way more compelling than product data. If you start off your presentation with that you establish yourself as the expert and start setting buying criteria early
    • A history of the market that you are in can be a good way to introduce your company
  • Build in opportunities for stories – Well told stories increase recall by another 26 percent
  • Your presentation should be curiosity driven – Allude to information coming later – make them want to see the next slide
  • Think of each headline as valuable real estate – Headlines are valuable space – make them work – generally that means summarizing the most important slide point in a more dramatic fashion
  • Focus on them, not you – Everyone’s favorite topic of conversation is themseleves – get them talking about their challenges. First seek to understand their problems then seek to communicate how you can address them.

Three modes of communication

  • Your words – the actual content you are communicating
  • Your tone – the way that you are saying your words. Speak with a tone of authority that communicates the importance of what you are discussing.
  • Your body language
  • Focus on taking control of the meeting by asking people to stand or sit and stretch
  • Ask people to come out from behind there desk to check out material more effectively – it puts you in control of the situation

Eight common mistakes presenters make

  • Thank prospects for their time or apologizing for taking it – The time that you are presenting is valuable to them – set that tone initially
  • Presenting with your hands in your pockets
  • Presenting from a sitting position – Standing is a position of authority and keeps you in control of the dynamic. Easy request is to ask if you can present while you stand – “I think better on my feet”
  • Being led around by the nose – You need to lead the prospect to what they want – don’t follow them around the store. Practical impact of this is stopping and answering questions that aren’t in the flow of the presentation – keep these in the queue and answer them as you go
  • Letting the materials upstage you or guide you – The materials are there to help your sales process but ultimately they are just aids – you are in control of what and how you present
  • Keeping it totally serious – It’s okay to have fun and breaks up the tedium
  • Failing to practice the presentation each and every time before you give it – practice makes perfect – but remember, some people just plain can’t present
  • Having no idea what comes next in the presentation – Presell every panel in the presentation so your audience mouth is watering for what comes next
  • Don’t call a presentation a presentation – nobody wants those – call it an orientation or an executive briefing – that’s something people might actually want

Chapter 9 – The nitty gritty of getting the best buyers

  • Develop a key target list of best buyers – your dream list
  • Develop a plan to target them – expect that plan will involve rejection for the first five, ten or fifteen times you reach out – be relentless. People want to reciprocate your persistence with busienss
  • Seek to serve the industry your are providing service to first – sales come afterwards. “We commmisioned a study to focus on the top ten accessibility lawsuits, causes and common threads and are now making this information available to you at no cost.”
  • Remember that targeting your best buyers is a process that goes on forever and it needs to be done as part of a core and consistent part of your ongoing sales efforts

Six simple steps to get your dream clients

  • Choose the dream list – Pick the people in the company who have the power to say yes! If your contact only has the power to say no you need to go over them in the organization to someone who can say yes
  • Choose gifts to send to them
    • Send little gifts – expensive gifts are likely to be seen as a bribe
    • Send gifts that are useful or are things they could give to kids
  • Create your initial letters
    • Keep the letter short
    • Give it a very clear call to action – providing them an executive briefing
  • Create you calendar
    • Create specific guidelines and timeframes for following up with the prospects. You have to consistently follow-up with them over a long period of time before you can convert to a customer. Ideally you should be hitting these targets every two weeks just checking in and keeping them up-to-date on your company.
  • Conduct follow-up calls – Each mailing should be coupled with a follow-up call
  • Present your executive briefing – Make sure to have the best person presenting it and then have the follow-up go through the individual sales people
    • For web based seminars consistent follow-up it the key to gettting attendance

How to get around the gatekeepr

  • Ask for the person directly – don’t be nice and ask them to put you in to them
  • Keep making the assistant go back and ask the boss for more information

Business Opportunity Profile

Mass market

  • Focus on scalable, repeatable business that benefit from efficiencies and transaction oriented approaches
  • Business that scale independent of cost basis

Old line businesses

  • Mature industry businesses that would benefit from infusion of globalization and larger IT process
  • Local businesses that would benefit from restructuring operations around a global supply chain

Good to Great – Book Notes

  • Level Five Leadership
    • Self effacing, quiet reserved
    • Personal humility and professional will
    • Ambition first and foremost for the good of the company
    • Ego brings about failure in two thirds of the times
    • Desire from the leader is to produce recurring, sustained positive results over time
    • Attribute success factors to the other members of the team
  • First Who… Then What
    • Get the wrong people off the bus
    • Get the right people in the right seats
    • Who questions come before what questions
    • NOT a genius with a thousand helpers
    • Rigorous not ruthless, undoing the wrong decisions in HR are too much
    • Three rules
      • When in doubt keep looking, don’t hire
      • When you know you need to make a people change, act
      • Put your best people on your biggest opportunities
    • Debate vigorously, then act
    • Packard’s Law
      • No company can grow revenues consistently faster than its ability to get enough of the right people to implement that growth and still become a great company.
  • Confront the brutal facts
    • Stockdale paradox – You must maintain unwavering faith that you can and will prevail in the end, regardless of the difficulties and at the same time have the discipline to confront the most brutal facts of your current reality, whatever they may be.
  • The hedgehog concept
    • Simple is good
    • Driven by the three concepts
      • What you can be the best in the world at
        • Understand both what you can be the best at and what you cannot be the best in the world at – both sets of understanding are important
      • What drives your economic engine
        • What is the core metric that has the greatest impact on the operation of the company
          • Profit per customer?
      • What you are deeply passionate about
        • The love of toilet paper
    • The hedgehog goal is understanding – not guts
    • Should be created based on outcome of a council
  • A culture of discipline
    • Discipline allows for self management
    • Execution within the three circles of the hedgehog concept
    • Discipline to not stray from execution within those circles
    • Consistent system but flexibility allowed within the system
  • Technology Accelerators
    • The advance application of carefully selected technologies
  • Flywheel
    • The build up of speed over time

What does that mean for me?

  • Be involved in the hiring decisions for the company
  • Determine what the “hedgehog concept” for the company is
  • Red flag process – what is the method for ensuring that a problem is brought to the right level of attention
  • Setup a long term guiding council for company strategy
  • Discuss the necessary steps to determine a hedgehog concept