Tag: Reader

The Zigzag Principle

In the startup industry, there is a widespread ‘get it done’ mentality, through which entrepreneurs are urged to push forward to their goal at all costs. Rich Christiansen challenges this mentality in The ZIgzag Principle, in which he postulates that forging a straight path toward a goal does not produce lasting results. Instead, Christiansen advocates for taking time to raise money, acquire resources, scale, and learn to fail. By following a select set of ‘zigzag’ principles, he asserts that a business will become profitable and surpass its initial startup stage.

The Zigzag principleThe zigzag principle stemmed from a skiing session that Christiansen had one winter with his son. The two were beginners, and accidentally ended up on the most difficult slope. Instead of attempting to ski straight down the hill, which was very dangerous at their level, Christiansen decided he and his son should zigzag down the hill until they reached the bottom. This allowed them to get safely off of the slope without injury. Christiansen says the same mentality should be applied to life and business – while shooting straight toward a goal may get you to that goal faster, there is more chance of sustaining lasting repercussions along the way.

The zigzag principle starts at the very beginning of forming a business. Christiansen challenges his readers to look at their internal motivation, rather than focus on mission statements. He believes that the motivation behind beginning a company will help determine if the company is sustainable to its founder, and therefore if the mission statement should even be written.

The first ‘zig’ principle focuses on making money. The book guides its reader through a process to determine how to make a business profitable. Far too many startups do not focus on profitability at the beginning, which increases their chance of failing. The second ‘zag’ principle is all about additional resources. Once a new business becomes profitable, it can focus on adding more people and capital to expand. The third and final ‘zag’ principle involves scaling in a big way. Christiansen guides readers through deciding how large they want to make their business, and through determining how they will get there.

The rest of the book helps its readers navigate how to deal with a creative team and how to track progress. Christiansen also includes demonstrative success stories from himself and other companies.

This book is a must-read resource for all people looking to start a new business. Christiansen’s zigzag principle is a revolutionary approach to starting a business that can guarantee lasting success.

Competing for the Future

Management practices that worked in the old days shouldn’t always be counted on presently. With all the changes that have gone on in the business world, and especially in the realm of leadership, a necessary skill to have is thinking about the future. The future doesn’t mean just some 5 to 10 year plan your company has in mind, it goes far beyond that.

A great book to help business leaders learn this important skill is Gary Hamel and Des Hague BusinessC.K. Prahalad’s, Competing for the Future. Hamel is the founder of Strategos, which formed in 1995 and has since been a leading consulting firm with offices worldwide. The late C.K. Prahalad was a distinguished scholar from the Stephen M. Ross School of Business in the University of Michigan but passed away in 2010. Like Hamel, Prahalad was a prevalent voice within the business world. That they wrote this together, with the share of their knowledge, makes it a great book already.

The authors themselves state that the goal of the book is to help business leaders learn how to imagine the future and then work on creating that future that they imagined. It’s not enough to just increase performance, let’s say, or restructure your company. What you ultimately learn from Competing for the Future is strategy – how to strategize and how to execute that strategy with your company’s future in mind.

Another great aspect of this book is that it isn’t just a must read for the Executives. Managers and other leaders within a company should not hesitate in picking it up. The more people within a company’s leadership team that are working and strategizing with a future in mind the better. Management teams, for example, can learn that a moving toward the future they want for a company depends a lot on just how fast the company can learn about the upcoming future in comparison to competitors.

Built to Last: Successful Habits of Visionary Companies

Published in 1994, Built to Last, is billed as one of the most influential books in our era. It is the outline and explanation of a 6 year research project by Jim Collins and Jerry Porras, both professors of Stanford University’s Graduate School of Business. Their research had two primary objects. The first was to identify which characteristics were common to highly visionary companies and the second was to communicate their findings in such a way that it would be useful and influential to management across the business world.jim_collins_built_to_last

In order to figure out what companies are identified as “visionary,” 1,000 CEOs across the country were surveyed. Also, along with the survey, there were criteria set out for what could be considered a visionary company. It defined a visionary company as one that is a distinguished institution within the industry it is in, admired by a wide range of credible businesspeople, has had multiple generations of CEOs, founded prior to 1950, and has had an impact in the world along with multiple life cycles of products or services.

From this, Collins and Porras extracted a list of 18 visionary companies. Some examples include, 3M, American Express, Boeing, Citicorp/Citigroup, Disney, Ford, HP, Johnson & Johnson, Merck, and General Electric. These companies and the others listed, were considered leaders in their industries, and to show how and what these companies did differently to help establish themselves as visionary, Collins and Porras compared and contrasted them to equally established competitors in their respective industries. Some of the factors that were used to compare the visionary companies to their successful competitors included how they performed in the stock market between the 1920s and 1990s. While the competitors did well, outperforming the general market by 2 times, the visionary companies listed outperformed the rest of the market by as much as 15 times. Impressive indeed.

The brilliance of Built to Last is that it brought together qualitative data from companies and how they were run to be successful with clear and understandable quantitative data.

 

Best Books for Business

Warren Buffett, as one of his business partners has witnessed, is a big reader and likewise, he admires people who also read a lot. But it is not enough to just read any old business book. There are some pretty terrible books out there, but there are also some that are a must read whether you are a young entrepreneur or an experienced CEO.

1. Peter F. Drucker’s The Effective Executive: The Definitive Guide to Getting the Right Things Done (1967)

In the Effective Executive, Drucker highlights the unique skills that make an executive effective. This ranges from time management, to whether or not they know how to best utilize the various strengths found throughout their organization. According to Drucker, being an effective executive also involves having the ability and will to do what others have overlooked while avoiding making decisions that are unproductive. Although this book was written several decades ago, it remains very relevant.

2. L. David Marquet’s Turn This Ship Around! A True Story of Turning Followers into Leaders (2012)

What makes this book unique is that Marquet was not a businessman. Instead, he was the newly appointed Captain of a United States nuclear-powered submarine, the USS Santa Fe (SSN-763). At that time, the USS Santa Fe was said to be the worst performing submarine in the Navy’s fleet. To add to that, Captain Marquet knew very little about it – he was expecting to command a different submarine class altogether. When Captain Marquet unknowingly gave his crew members an order that was actually impossible for them to followed, but they tried to anyway, he identified the problem keeping the Santa Fe behind – The nuclear attack submarine was full of followers, not leaders. By promoting leadership at all levels, Captain Marquet turned the Santa Fe from the worst performing ship to one of the Navy’s best.

3. Dale Carnegie’s How to Win Friends and Influence People (1936)

Self-help books tend to sell rather well, but this is the first best-selling self-help book ever. Although published in 1936, this book has remained at the top with sales totalling 15 million. One fan of this book is Warren Buffett. When he was 20 years old, he took a course on the book and it is said that to this day he still has the certificate of completion for the course hanging in his office.

4. Clayton M. Christensen’s The Innovator’s Dilemma (1997)

Businessman and Harvard professor Clayton Christensen demonstrates, through interesting examples, how companies focus far too much on customer’s current needs or abilities and end up missing out on opportunities. This heavy focus on the current needs of customers distracts companies from developing updated business models or from the adoption of new, innovative technology that will serve to meet future or unstated needs of clients. With the business world always changing, this book is excellent in helping leaders learn to notice changes and obstacles coming their way.

5. Ben Horowitz’s The Hard Thing About Hard Things (2014)

This book is aimed not at entrepreneurs just getting started on their business, but at “wartime CEOs.” They are CEOs who, in Horowitz own honesty, have screwed up one way or another. This brutally honest book provides advice on how to spot the next moves and uses examples from Horowitz’s own rise as a leader within the tech industry as a venture Capitalist and half of the firm Andreessen Horowitz and as a successful CEO after the dot-com crash.

6. Blake Master and Peter Thiel’s Zero to One (2014)

Zero to One originated from a set of notes collected by Master that made up a class on startups that Thiel at Stanford University in 2012. As student in the class, Master, a graduate of Stanford and Stanford Law took what he learned from Thiel and founded his own startup. Zero to One goes through events of Thiel’s own life, such as his cofounding of PayPal and early investments in Facebook. Of the many advice he gives on how to build successful startups, the best one is that to be successful a business must differentiate itself from the competition.

7. Warren Buffett and Lawrence Cunningham’s The Essays of Warren Buffett: Lessons for Investors and Managers (2014)

A collection of letters written over the span of 30 years that give invaluable insight into the mind of one of the greatest businessmen and investors around. With humour and humility, Buffet even reveals some of his errors throughout his long journey in the world of business and this only serves to add to the value this book possesses for investors and leaders. It is important to note that this book is not about Buffett’s investment strategies, but about his role in the managements of a company now worth over $300 billion, Berkshire. It is focused on the long term and consistent, which is really the best takeaway from being in Buffett’s presence.