Author

Ray Dalio

Summary

The life and work principles of Ray Dalio, founder of investment firm Bridgewater Associates.

Takeaways

An idea meritocracy is the best way to make decisions in a company. An idea meritocracy requires a commitment to truth and transparency. It can be achieved if people are open minded and ideas are evaluated based on the track record of the people who contribute them. The process can be supported by writing down and refining principles that support decision making and reflect learnings from the past.

Quotes

“In 1966, asset prices reflected investors' optimism about the future. But between 1967 and 1979, bad economic surprises led to big and unexpected price declines. Not just the economy and the markets but social sentiment deteriorated as well. Living through that taught me that whilst almost everyone expects the future to be a slightly modified version of the present, it is usually very different."

“People still make the most important decisions better than computers do. To see this, you need look no further than at the kinds of people who are uniquely successful. Software developers, mathematicians, and game-theory modelers aren’t running away with all the rewards; it is the people who have the most common sense, imagination, and determination."

“Be especially wary of those who comment from the stands without having played on the field themselves and who don’t have good logic, as they are dangerous to themselves and others."

“Good metrics come about by first thinking of what information you need to answer your pressing questions and then figuring out how to get it. They do not come about by gathering information and putting it together to see what it tells you."

Author

Vincent A. W. J. Marchau, Warren E. Walker, Pieter J. T. M. Bloemen, Steven W. Popper

Summary

A review of methods and applications for decision making under deep uncertainty.

Takeaways

Situations with deep uncertainty are characterized by a lack of knowledge about how future events will unfold. In complex systems, the predictability of potential outcomes is low.

When confronted with deep uncertainty, decision makers are advised to shift from a predict-then-act paradigm to a monitor-and-adapt strategy. Traditional planning approaches make assumptions, predict outcomes, and tailor a policy to the predictions. Decision Making Under Deep Uncertainty (DMUDU) approaches, on the other hand, propose a policy, identify vulnerabilities, and assess the best options for reducing the identified vulnerabilities.

Quotes

“The intrinsic limits to predictability, the existence of legitimate alternative interpretations of the same data, and the limits to knowability of a system have important implications for decisionmaking. Under the label of ‘decisionmaking under deep uncertainty’, these are now being explored."

“There is ample evidence that human reasoning with respect to complex uncertain systems is intrinsically insufficient. Often, mental models are event based, have an open-loop view of causality, ignore feedback, fail to account for time delays, and are insensitive to nonlinearity (Sterman 1994)."

“That is, under deep uncertainty decision support should move away from trying to define what is the right choice and instead aim at enabling deliberation and joint sense making among the various parties to a decision."

“In short, there are five categories of components: policy architecture, generation of scenarios, generation of alternatives, definition of robustness, and vulnerability analysis. Any given DMDU approach makes choices with respect to these five categories. For some, these choices are primarily or almost exclusively in one category while remaining silent on the others. For others, implicit or explicit choices are made with respect to each category."

Author

Brendan Reid

Summary

Advice for a more strategic approach to career planning.

Takeaways

Corporations typically don’t operate rationally as they consist of people who have their own benefits in mind. Career progression requires a strategic approach and tactical steps contrary to commonly accepted practices.

1. Don’t be overly passionate about your ideas and rather be objective in providing optionality
2. Embrace the changes everyone else hates
3. Learn to promote your ideas instead of refining them without feedback
4. Avoid a too strong focus on result orientation and instead spend time expanding your skill set
5. Don’t be a part of the heard, and don’t gossip about peers and superiors
6. Find big problems to solve
7. Don’t hold peers accountable and mentor them wherever possible

Quotes

“People inherently want to work with people similar to themselves and who they like. Any strategy for managing a career that includes not being liked by others is flawed."

“Isn’t passion what will make people want to follow you? That is only partially correct. Passion for the best path, irrespective of whose idea it was, is a virtue that endears people. Passion for your path, because you know it to be right, is just a bullying tactic disguised as innovativeness."

“Results have a short shelf life. Skills have value over many years and roles."

“Avoid the herd mentality at all costs. Start promoting your projects. Be at your best when difficult change is afoot and everyone around you is rebelling. Stop holding people accountable and start helping them to succeed. Choose to be objective over passionate when presenting ideas and strategies. And favor high-scoring projects over reliable performance of everyday tasks."

Author

Reed Hastings, Erin Meyer

Summary

The story of establishing a culture of freedom and resonsponsibility at Netflix.

Takeaways

Netflix leadership has identified two key ingredients for a creative and innovative culture: candor and talent density. Employees are empowered to contribute their opinions and ideas. They need to get enough context about the business priorities to take ownership and make informed decisions without the burden of a buerocratic approval process. Netflix aims to attract top talent and rather pays for one highly capable employee than for ten mediocre ones.

Quotes

“If you can’t afford to pay your best employees top of market, then let go of some of the less fabulous people in order to do so. That way, the talent will become even denser."

“When you succeed, speak about it softly or let others mention it for you. But when you make a mistake say it clearly and loudly, so that everyone can learn and profit from your errors. In other words, ‘Whisper wins and shout mistakes.'"

“These are all ways of controlling people rather than inspiring them. It’s not easy to avoid chaos and anarchy as you remove these controls, but if you develop every employee’s sense of self-discipline and responsibility, help them develop enough knowledge to make good decisions, and develop a feedback culture to stimulate learning, you’ll be amazed at how effective your organization can be."

“What we’ve learned is that in order to integrate your corporate culture around the world, above all you have to be humble, you have to be curious, and you have to remember to listen before you speak and to learn before you teach. With this approach, you can’t help but become more effective every day in this ever-fascinating multicultural world."

Author

Ed Catmull, Amy Wallace

Summary

Practical advice on how to establish and maintain a culture of creativity and innovation in an organization

Takeaways

Running a large organization requires dealing with great complexity, and high uncertainty and instability. It is easy for managers to lose sight of the problems of their employees. The only way managers can avoid this is to encourage candor and open feedback, and to actively work on uncovering and understanding anything that is hidden.

Leaders need to embrace a mindset of humility, admit mistakes and course-correct when new evidence comes to light. Being too fixated on goals and stability is ill-advised as change and failure is unavoidable. Leaders should hold on to their ethics and values, but re-balance priorities and adjust goals as they learn.

Quotes

“I will discuss many of the steps we follow at Pixar, but the most compelling mechanisms to me are those that deal with uncertainty, instability, lack of candor, and the things we cannot see. I believe the best managers acknowledge and make room for what they do not know—not just because humility is a virtue but because until one adopts that mindset, the most striking breakthroughs cannot occur. I believe that managers must loosen the controls, not tighten them."

“Creative people must accept that challenges never cease, failure can’t be avoided, and ‘vision’ is often an illusion. But they must also feel safe -always- to speak their minds."

“Unleashing creativity requires that we loosen the controls, accept risk, trust our colleagues, work to clear the path for them, and pay attention to anything that creates fear. Doing all these things won’t necessarily make the job of managing a creative culture easier. But ease isn’t the goal; excellence is."

“Do not accidentally make stability a goal. Balance is more important than stability."

Author

Jocko Willink, Leif Babin

Summary

A set of leadership principles from the Navy Seals and how to apply them to the business context.

Takeaways

Successful leaders need to take ownership to the next level. “Extreme Ownership” includes owning up to mistakes, believing in the mission, and providing enough context for subordinates and supervisors. The best leaders keep their egos in check and critically assess how they can contribute to the team’s success.

Quotes

“On any team, in any organization, all responsibility for success and failure rests with the leader. The leader must own everything in his or her world. There is no one else to blame. The leader must acknowledge mistakes and admit failures, take ownership of them, and develop a plan to win."

“In order to convince and inspire others to follow and accomplish a mission, a leader must be a true believer in the mission. Even when others doubt and question the amount of risk, asking, “Is it worth it?” the leader must believe in the greater cause. If a leader does not believe, he or she will not take the risks required to overcome the inevitable challenges necessary to win. And they will not be able to convince others—especially the frontline troops who must execute the mission—to do so. Leaders must always operate with the understanding that they are part of something greater than themselves and their own personal interests."

“Ego clouds and disrupts everything: the planning process, the ability to take good advice, and the ability to accept constructive criticism. It can even stifle someone’s sense of self-preservation. Often, the most difficult ego to deal with is your own."

“Simplifying as much as possible is crucial to success. When plans and orders are too complicated, people may not understand them. And when things go wrong, and they inevitably do go wrong, complexity compounds issues that can spiral out of control into total disaster. Plans and orders must be communicated in a manner that is simple, clear, and concise."

Author

Eliyahu M. Goldratt

Summary

The story of a plant manager who discovers the benefit of systematically assessing the processing bottlenecks instead of relying on conventional wisdom.

Takeaways

Instead of relying on conventional wisdom, it is crucial to deeply reflect on the goal of an operation or organization and take a scientific and systematic approach to explore the factors (bottlenecks or constraints) that prevent us from reaching it.

The following process can serve as a blueprint to work towards achieving any goal.

1. Identify the system’s constraint.
2. Decide how to exploit the system’s constraint.
3. Subordinate everything else to the above decisions.
4. Elevate the system’s constraint.
5. If in the previous steps a constraint has been broken, go back to step 1, but do not allow inertia to cause a system constraint.

Quotes

“Finally, and most importantly, I wanted to show that we can all be outstanding scientists. The secret of being a good scientist, I believe, lies not in our brain power. We have enough. We simply need to look at reality and think logically and precisely about what we see. The key ingredient is to have the courage to face inconsistencies between what we see and deduce and the way things are done."

“I stop and look at him. “What are we asking for? For the ability to answer three simple questions: ‘what to change?’, ‘what to change to?’, and ‘how to cause the change?’ Basically what we are asking for is the most fundamental abilities one would expect from a manager. Think about it. If a manager doesn’t know how to answer those three questions, is he or she entitled to be called manager?”

“The lesson that Shewhart brought to manufacturing from Physics, and Deming made known worldwide, is that trying to be more accurate than the noise (in our case, trying to use sophisticated algorithms that consider every possible parameter in an environment of high variability) does not improve things but makes them worse—the results will most certainly not be an improvement but a deterioration in due-date performance."

Author

Mik Kersten

Summary

A practical guide to developing a product focussed management framework that allows competing in the Age of Software.

Takeaways

We are at the turning point of the digital revolution. Companies need to transform their business practices to effectively leverage software development and technology. Many companies realize the need for transformation but rely on management practices that are not adequate for the task.

Products differ from projects in multiple ways. Products have a longer life cycle and receive incremental funding based on business results. The direct mapping to business results enables transparency into the delivery progress and the impact a product has. The Flow Framework is a way to track and visualize the network of product value streams of an organization and identify bottlenecks that require attention.

Quotes

“Software delivery concepts near and dear to technologists, such as technical debt and story points, are meaningless to most business leaders who manage IT initiatives as projects and measure them by whether they are on time and on budget."

“The problem is not with visualizing the information; the problem is that, at a business level, we have not come up with a compelling set of abstractions for what to visualize. Contrast this with the DevOps team, who knows the exact telemetry to show, such as deploys per day and change success rate. Or contrast it with the development team, who uses Scrum or kanban boards to make work in progress visible to the entire team. In other words, the work should already be visible at the specialist and team level. It’s the business-level visibility that organizations lack. This is what flow metrics provide."

“In contrast, the key aspect of tracking business outcomes using the Flow Framework is that they are tracked continually for each product-oriented value stream. This is in contrast to many existing approaches, which track metrics according to project or organizational structures. It is this shift in what we measure that is key to accomplishing the move from project to product, as accurate feedback at the right level of granularity is essential to supporting decision making."

Author

Jack Welch

Summary

The life and professional career of Jack Welch, Chairman of General Electric from 1981 to 2001, described in his own words.

Takeaways

Leadership requires more than the knowledge to make sound business decisions. It is equally important to establish the right culture with a focus on people that allows for differentiation and development, and that empowers everyone to contribute ideas (“boundaryless”).

Being able to react to changes trumps a well thought out longterm strategy. Speed and decisiveness are important to remain competitive in changing circumstances even if not all decisions or judgment calls stand the test of time. The characterization of some associates who receive high praise in the book but were later on criticized for their leadership (Jeff Immelt, Bob Nardelli) or general conduct (Roger Ailes, Matt Lauer), is one example that appears to not have aged well.

Quotes

“We learned the hard way that we could have the greatest strategies in the world. Without the right leaders developing and owning them, we’d get good-looking presentations and so-so results."

“Business success is less a function of grandiose predictions than it is a result of being able to respond rapidly to real changes as they occur. That’s why strategy has to be dynamic and anticipatory."

“Informality isn’t about first names, unassigned parking spaces, or casual clothing. It’s so much deeper. It’s about making sure everybody counts–and everbody knows they count."

“Your back room is somebody else’s front room … Don’t own a cafeteria: Let a food company do it. Don’t run a print shop: Let a printing company do it. It’s understanding where your real value added is and putting your best people and resources behind that.”