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11/18/11--23:42: Managing our Energy - The Power of Full Engagement, by Jim Loehr and Tony Schwartz (chan 1852493)

Book Notes: “The Power of Full Engagement” by Jim Loehr and Tony Schwartz

By Josh Kaufman



This post contains my personal notes about the big ideas in Jim Loehr & Tony Schwartz’s The Power of Full Engagement. My book notes are different from many of the book summaries you’ll find on the web. Instead of following the structure of the book in question, we’ll isolate and examine the key ideas and themes that make the book useful. Along the way, I’ll tell you how I actually apply the ideas. Enjoy!

Most businesspeople focus on managing time, which is misleading: true effectiveness is more about managing and investing your energy, and that starts by paying close attention to your body. Jim Loehr & Tony Schwartz’s The Power of Full Engagement describes how to optimize your daily energy levels by improving your daily habits and routines.

About Jim Loehr & Tony Schwartz



Jim Loehr & Tony Schwartz are the authors of the Personal MBA-recommended book The Power of Full Engagement_. For more information about Jim Loehr & Tony Schwartz’s work, check out blank">their website.

Here are 10 big ideas from Jim Loehr & Tony Schwartz’s The Power of Full Engagement…

#1: Time is not the most important thing to manage – energy is what’s actually important.

Most productivity thinkers over the years have fixated on the idea of time: there are only so many hours in a day, so if you want to be an effective person, you should learn to manage them wisely.

Time, however, passes on its own – you can’t really manage it. What you can manage is the energy you bring to those hours.

If you’re low on energy, it doesn’t matter if you have a lot of time to accomplish a task – you’ll be so exhausted that you’ll make very little progress. If you have a ton of energy, you can get many things done in very little time.

The Power of Full Engagement is about managing your energy, and helping you find ways to feel more energetic each day.

#2: Wise use of available energy is what leads to results.

Energy is finite, but expandable. You only have so much energy to use each day, but our capacity for productive effort expands as we use it. As long as you take care of yourself and pay attention to how much energy you have, you can accomplish surprising amounts of work.

#3: All hours aren’t created equal – pay attention to your energy cycles, which naturally oscillate.

Time management proponents make the mistake of assuming all hours are fungible – equal to any other. On a calendar, there’s no visible difference between 9:00-10:00am and 12:00-1:00pm.

Physically, there’s a huge difference. Our body operates in Energy Cycles in which our energy fluctuates up and down. You may be familiar with the circadian cycle, which is responsible for our waking/sleeping pattern. There are other cycles as well, which naturally oscillates every 90 minutes between high and low energy.

This cycle is normal, so it pays to respect it. Every hour and a half or so, your body needs a bit of relaxation and rest. Powering through the dip in energy is actually counterproductive – you’re not giving your body the rest it needs to operate at peak performance.

#4: Energy diminishes with overuse and underuse – it’s best to think in terms of sprinting and recovery.

When working, think like a sprinter – you can cover a lot of ground in a quick burst, but you can’t keep up that pace all day. With a little rest between bursts, however, you can sprint over and over again.

If you tax yourself too much, you’ll wear yourself out, and you’ll need a longer period of recovery before you’ll be ready to go again. At the extreme, some people work themselves to the point of exhaustion, at which point their body forces them to recover via injury or illness. You can only push yourself so much – Recovery is mandatory, not optional.

#5: You are not a machine: humans need relaxation, rest, and recovery for top performance.

The ideal many people seem to have about human productivity is working like a robot: no rest, no food, no sleep, no recovery all day every day. That’s a recipe for disaster.

Humans are physical beings, and we have physical needs. Instead of viewing your body as a vehicle for your brain, it’s useful to think of your body as one integrated tool, which you use to get things done. If the tool breaks or wears down, you won’t accomplish anything.

Here’s a great little story Warren Buffett often tells: if you were told that you could only have one car for the rest of your life, you would take immaculate care of it. You would polish, protect, and maintain it as best as you could. Our body serves the same purpose, so treat it the same way.

#6: You have a Gas Tank – if you don’t take care of yourself, you’ll inevitably break down.

I’m willing to bet that at some point in your life, you reached your breaking point – I certainly have. You don’t have unlimited energy, and if you don’t take care of yourself, you’ll collapse. That’s never a good thing. You have a Gas Tank, just like any vehicle, and when you run out, you’re sunk.

I recommend pushing to the point of 80-90% of your capacity, then going no further. That approach helps you stretch your limits and get a lot accomplished while still leaving ample time for relaxation and rest.

#7: Used consciously, stress is a good thing – it’s a form of energy resistance training.

On the other end of the spectrum, it’s possible to exert yourself too little. Stress is not always negative – it’s a signal our bodies use to generate more energy to meet the demand. As long as we’re getting enough rest and recovery, it pays to exert ourselves – that’s how we become stronger over time.

#8: Daily rituals can help you keep your energy high.

Taking care of yourself is a huge priority, and there are a few simple habits that can help keep your energy levels high each day.

Food is your body’s fuel – ensure you’re getting enough (not too much), that’s it’s high quality, and that it contains enough of the protein and nutrients your body needs to function optimally. You also need enough water: tea is also a good option for variety. Stay away from refined sugars. When in doubt, eat like humans ate thousands of years ago. (Personally, I also have to be careful about wheat gluten, which I discovered via self-experimentation.)

Vitamins are also important – our diet has changed dramatically in the past several thousand years, and so we often don’t get many of the trace minerals we need to function optimally. (Side note: I recommend reading The Protein Power Lifeplan by Dan and Mary Eades for a detailed examination of what our body needs to function optimally.)

#9: It pays to track your energy cycles, so you can plan to maximize them.

Everyone’s energy cycles are a little different, so it pays to learn what yours are. I recommend using a variant of what Peter Drucker recommends in The Effective Executive: keep a time journal, but focus on your energy levels throughout the day. Every hour or so, tune in to how you’re feeling – are you at a high point, or at a low point.

Once you know your patterns, it’s far easier to plan your day around your cycles. For example, my best times for focused attention are mid-morning and early afternoon. Accordingly, I schedule my day to allow me to write during those periods, and as a result, I get more done.

#10: Time should be spent either being productive or consciously resting – otherwise, it’s time wasted.

Have you ever had a day where you half-worked? At the end of the day, you didn’t get much done, but you felt like you had just run a marathon?

Those days are days wasted. If you’re not being productive, take a break – a real break. Pretending to work does no one any good. Recharge your batteries, then go back to your work when you’re relaxed and refreshed.

This principle is a strong case for taking an afternoon nap – after lunch, your body goes into a natural down cycle. Taking advantage of that natural down period to recharge isn’t lazy – it’s very smart. By taking twenty minutes to relax and recharge, you’re setting yourself up for a more productive afternoon.

This summary was created by Josh Kaufman, an independent business teacher and author of The Personal MBA: Master the Art of Business. To receive Josh’s notes on the best business books available and other Personal MBA blog updates, be sure to sign up for the Personal MBA newsletter – it’s absolutely free.




11/18/11--23:42: LAUNCH - UK edition of Personal MBA book + recent interviews (chan 1852493)

LAUNCH: UK edition of Personal MBA book + recent interviews

03 February 2011



The UK edition of The Personal MBA: Master the Art of Business is now available at Amazon.co.uk and bookstores near you in paperback and Kindle format. The book is already the #1 bestselling business management book on Amazon.co.uk, which officially makes the book an international bestseller.

The UK edition is a large-format paperback, with a very attractive, shiny silver cover. Portfolio’s design team did a great job – you won’t be able to miss it on the bookshelf.

Waterstones has made The Personal MBA its business book of the month, and WH Smith is promoting it heavily this month as well. Special thanks to the Portfolio UK publicity team for their hard work and great results.

Regarding content, the book is getting very high marks. Here’ a review of the book in Management Today by Philip Delves Broughton, of “What I Learned at Harvard Business School” fame. The Sunday Times also published a lovely review on Sunday.

If you’re into eBooks, here’s how to purchase a copy on the Apple iBookstore:



If you already have a copy of the book, please take a few moments to leave your review – it helps tremendously.

Thanks for your support, and happy reading!

Recent Interviews about The Personal MBA

I’ve been a guest on several fantastic radio shows, blogs, and podcasts over the past few weeks. Here are a few of the best:

• NicheInterview with Jurgen van Pletsen

• The Accidental Creative with Todd Henry

• Blog Business Success with Wayne Hurlbert

• Breakthrough Business Strategies with Michele Price

Enjoy!




11/18/11--23:42: Making Sense of Behavior - William T. Powers (chan 1852493)

Book Notes: “Making Sense of Behavior” by William T. Powers

By Josh Kaufman



This post contains my personal notes about the big ideas in William T. Powers’s Making Sense of Behavior. My book notes are different from many of the book summaries you’ll find on the web. Instead of following the structure of the book in question, we’ll isolate and examine the key ideas and themes that make the book useful. Along the way, I’ll tell you how I actually apply the ideas. Enjoy!

People aren’t behavioristic stimulus-response machines – our behavior is far more complex because we want things, and those desires and perceptions constantly shape our behavior. Making Sense of Behavior by William T. Powers is an introduction to “Perceptual Control Theory,” a powerful and flexible way to understand why people do the things they do.

About William T. Powers



William T. Powers is the author of the Personal MBA-recommended book Making Sense of Behavior_, as well as the author of Behavior: The Control of Perception and blank"> Living Control Systems_. For more information about William T. Powers’s work, check out his w/">homepage.

Here are 10 big ideas from William T. Powers’s Making Sense of Behavior…

#1: Perception is how our minds experience the outside world.

Your brain doesn’t experience the world directly – our senses are our brain’s connection to the Environment around us. Everything our brain does is intrinsically linked to our senses, which we use to examine the world around us.

#2: Our brains compare what we perceive vs. internal preferred or desired “reference levels”.

For every perception we have, there’s a preferred level or state of that perception. This preference is called a Reference Level, and our minds are constantly comparing what we’re actually perceiving vs. what we’d prefer to perceive.

This comparison is constant and automatic – it takes no thought, no effort, and no willpower. Since our brain is primarily a survival tool (which we discussed in Brain Rules), our reference levels at every level of perception are set to what our mind believes are best for our survival, safety, and comfort.

#3: Behavior is the control of perception.

We are not stimulus-response machines. If you’re familiar with the various academic theories of human psychology developed over the years, you’ll recognize a common thread – they assume that human behavior is primarily a response to environmental stimuli. There’s a kernel of truth in that, but only a kernel.

Perceptual Control Theory (PCT) is a non-behavioristic way to explain human behavior. Instead of blindly and automatically responding to stimuli, PCT explains behavior through the control of perception. Every action humans take is intended to change a perception the actor is currently experiencing to more closely fit the preferred reference level.

#4: When a perception is “under control,” we do nothing.

Think of the climate control system in your home. When the temperature is within a certain reference level (say, between 68 and 74 degrees F), the system does nothing. That’s intentional – when the perception that’s being controlled is within the reference level, no action is necessary.

Humans do the same thing – if you’re feeling comfortable, are you going to go out of your way to put on a sweater or turn on the air conditioning? No – there’s no point. The perception you’re controlling for – temperature, as measured by comfort – it under control, so you do nothing.

The same principle applies to work – if you feel like you’re already making enough money, are you going to move heaven and earth to get even more? Probably not. That’s not laziness – you’re just Conserving Energy, which was a strategy that served our ancient ancestors very well. No sense in expending energy if it’s not necessary – you may need it later.

We only act when a change in our Environment knocks a perception out of control. That’s where the stimulus-reponse model fails – it assumes that the same stimulus will produce predictable responses every time, which is not true.

Think of the classic workplace stimulus-response model: if you want your hourly workers to work more, you just need to pay them more, right? Not necessarily.

A few of your workers who want more money (i.e. money is out of control) will work more, true. But some of your workers have other priorities – perceptions that are more important. They may have only so much time to devote to work, so they’ll gladly accept more money for the same effort. A few only need so much, and paying them more helps them get there faster, so they’ll actually work less.

That single stimulus – paying more per hour – produces three different responses, two of which are exact opposites, depending on what the individual is controlling for at that moment.

That’s why you can’t count on external stimuli to produce predictable responses unless you know what the individual is controlling for – unless it affects a perception they’re controlling for, you won’t get the response you expect.

#5: When a perception is “out of control,” we act in ways to bring it back under control as quickly as possible.

Whenever you perceive something “wrong” in your environment, you act. If there’s too much light entering your retinas, you’ll close the blinds on the window, shade your eyes, squint, or put on sunglasses. This response is fast and automatic.

The same principle applies to feeling to hot or cold, hungry, scared, or uncomfortable – when you notice that something is off, you’ll do whatever you can do in the moment to remedy the situation.

#6: Our actions to bring a perception under control depend on the environment in which they’re taking place.

Your response to a change in perception depends on the possibilities present in your environment. Think of the light example – if the environment is too bright, you can’t fix it by putting on sunglasses if you don’t have a pair of sunglasses to put on.

If you feel like you’re not earning enough money, your response to that perception depends on the actions you believe are possible to you in the situation. You could very well fix the issue by starting your own business or landing a better job, but if you don’t believe those options are open to you for some reason, you won’t go down those paths – even if they’re actually the best way to get what you want.

#7: There are control systems at every level of human action, from our cells all the way up to our highest values and ideals.

Our body is made up of control systems, and so is our mind. At the cellular level, your cells are manufacturing the molecules necessary for operation, and those processes are moderated by Feedback Loops that act as control systems.

Your bodily functions – respiration, heart rate, blood glucose level, insulin response, etc – are all moderated by control systems. Your physical behaviors – eating, sleeping, breathing, resting, acting – are all moderated by control systems. Your mental processes – data collection, contemplation, decision-making, etc – are all control systems.

Since perceptual control systems affect every area of life, it pays to understand how they work.

#8: Higher-level control systems average perceptions over time.

Your emotional state and self-concept are control systems as well. The truth of the statements “I am a productive person” or “I am a good person” can be seen as very high-level nested control systems, which are measuring perceptions over time.

If you’re controlling for “being a good father,” that perception is basically a weighted average of perceptions over time that may include things like “playing with my kids,” “providing material needs,” and “teaching important life lessons.” If the average dips too low, you’ll do the things you think you need to do to bring it back up.

This general relationship applies for every self-conception, moral perception, and prediction we have.

#9: It’s possible for control systems to conflict with each other by trying to control the same perception with mutually exclusive reference levels.

If two control systems try to control the same perception, but have different “success criteria,” they’ll fight. This is called Conflict, and it’s the essence of almost every inefficiency and frustrating situation in the world.

Think of a heater and and air conditioner that are both measuring the temperature of the same room. The heater wants the temperature above 71F, and the air conditioner wants it below 69F – mutually incompatible goals. As a result of the conflict, both systems will try to have things their way, a lot of energy will be expended, and neither system will ever succeed in bringing the system under control.

Interpersonal conflicts work the same way – look at the Israel/Palestine situation, for example. Each side wants the same piece of land under exclusive control, and wants the other side to disappear completely. As long as the desired end goals remain the same for both parties, the conflict will continue.

Inner conflicts also work the same way. Think of a common problem like procrastination, which is essentially a big bundle of control systems in conflict. If part of you wants to get things done and part of you feels tired or overwhelmed and wants to rest, you’ll experience a feeling of inner conflict, and you’ll neither really work or really rest until it’s resolved.

#10: You can never control another person in a “control systems” sense – you can only act on their perceptions or negotiate a change in their reference levels.

You can never control another person in the PCT sense of “control.” Forcing or pressuring another person to do what you want them to do is almost certain to conflict with what they’re controlling for in some way, shape, or form, which does more harm than good.

The best way to get what you want through other people is to negotiate with them, which in essence is an attempt to make your desire compatible with their current control systems. You can either position your offer in a way that helps them get more or less of something they’re already controlling for (which are likely to be related to the Core Human Drives), or encourage them to change the reference levels they’ve already set for certain perceptions.

Think of a basic business negotiation, like buying or selling a house. The seller may want more than $200,000 for the house, and the buyer may want to pay less than $175,000. As long as these conditions remain set the way they are, the buyer and the seller will remain in conflict, and will never agree.

By negotiating, each party tries to convince the other to change their reference level – either by decreasing the asking price or increasing the maximum acceptable payment. Most of that process revolves around changing perceptions, like pointing out that the roof is worn out, or the home is in a desirable area of town. Until they reach Common Ground, there’s no deal.

By coming to grips with the fact that you can’t control others, but you can do things to change their reference levels and perceptions, you’ll get what you want far more effectively and experience less conflict in the process.

This summary was created by Josh Kaufman, an independent business teacher and author of The Personal MBA: Master the Art of Business. To receive Josh’s notes on the best business books available and other Personal MBA blog updates, be sure to sign up for the Personal MBA newsletter – it’s absolutely free.




11/18/11--23:42: Work the System - Sam Carpenter (chan 1852493)

Work the System – Sam Carpenter



You have way too many important things to do to spend time “fighting fires” – focusing on urgent issues that constantly seem to pop up in your business. In order to grow, you need a system – a set of standard operating procedures that will help you handle issues in a quick and effective manner.

Systems don’t have to be complicated. Work the System describes a few simple methods you can use to turn your business into a well-oiled machine.

You don’t have to be a genius to benefit from installing business systems and processes – all it takes is a willingness to watch what’s happening and create simple, visible, repeatable methods to solve common issues. Once the system is in place and working properly, you can delegate or outsource common tasks to employees or contractors, freeing up your valuable time and energy for more important things.

If you want to spend less time working in your business, you must choose to work on it. Work the System will show you how to create business systems and processes that work, allowing you to grow without going insane.




Read more reviews about Work the System
Discuss Work the System on the Personal MBA Forums




11/18/11--23:42: Life After College - Jenny Blake (chan 1852493)

Life After College – Jenny Blake

Every once in a while, I invite cool people who have written books to share their knowledge with Personal MBA readers. Jenny is awesome, and her research and detailed templates will help you navigate the perils of daily life. I think you’ll enjoy her personal notes on the key ideas in Life After College. – Josh

About Jenny Blake



Jenny Blake is an author, blogger, life coach and sought-after speaker who helps others “Wake up, live big! and love the journey.” She has been featured on Forbes.com, US News & World Report, CNN.com and was recognized by Suze Orman as a leader among Gen Y.



Jenny started her blog, LifeAfterCollege.org, in 2005 and recently translated it into a popular book, Life After College: The Complete Guide to Getting What You Want, which serves as a portable life coach for 20-somethings. Jenny recently took her own great leap by leaving Google after five and a half years at the company (on the Training, Career Development and Authors@Google teams) to pursue her passions full-time. Follow her on twitter @Jenny_Blake.

Here are ten big ideas from Jenny Blake’s Life After College:

 
 
 

1. Life: Your Big Picture

Don’t get bogged down by the “Tyranny of the Hows” for your biggest goals – get clear on your vision and values first. Your vision and values are your foundation – they will give you purpose and help you turn things around in your lowest, darkest moments.

Your vision and values give you wings when you’re laid out at the bottom of a dip, and your vision keeps you focused and clear when you have big decisions to make.

Related Templates:

• Tip-toeing around a big goal? 10 Questions to Help you Stop Thinking and Start DOING
• Take an overall temperature check of your life with the Wheel of Life template

2. Career/Work: If you are not (actively learning), you are obsolete.

We all know the old adage, “You learn something new every day.” Well, that’s not enough to get ahead. If you learn something new every day, it means you’re keeping up with everyone else. Looking for career security? Learn new skills. Become an expert in an area related to your field.

Companies must constantly evolve and innovate to stay ahead and continue making a profit. Just as the world and its technologies get more complex every day, you’ve got to actively learn and challenge yourself to stay ahead of the curve.

Related Template:

• Set career goals by creating a Professional Development Strategy

3. Money: Stop Clogging Your Financial Arteries

How conscious are you when it comes to spending money? How are your short-term habits contributing to your long-term goals? Are you clogging your financial arteries for the sake of fleeting indulgences? Make sure you have a clear understanding of exactly how much money is coming in and going out each month.

Detailed budgets are too cumbersome to be useful — focus on these three numbers instead: income, must-have expenses (groceries, rent, savings), and monthly nice-to-have expenses (going out to eat). Subtract the expenses from your income and you’ll get a “monthly allowance” for you to spend on discretionary items as you’d like, with the peace of mind of knowing that your main expenses are taken care of.

Related Templates:

• Get your finances under control with the ever-so-simple Four-Step Budget Template

4. Home: Shine your sink & clear your clutter

Flylady.net encourages her readers to do just one thing on a regular basis: shine your sinks. If you shine your sink (I suggest disposable disinfectant wipes), you’ll have a feeling of cleanliness, even if you don’t have time to spend the whole day scrubbing and vacuuming every crevice.

Beyond your sinks, what area of your house collects the most clutter? Feng shui experts say the state of order (or chaos) in our home often reflects our state of mind. Choose one area that needs the most work and dedicate two hours to giving it a complete overhaul. Watch as your mind follows suit after freeing up your space!

Related Templates:

• Clean house, clear mind! Identify your most troublesome area so you can Clear Your Clutter

5. Systems and Organization: Let your systems (not your memory) do the heavy lifting to keep you organized.

True to David Allen’s advice in Getting Things Done, your brain is not an effective place to store information. Focus on creating systems that will help you automate (ex: bill-paying), store (ex: creating an idea file), file (ex: common labeling system across paper and electronic folders), and remind you of important dates or events (ex: email reminders and a calendaring system).

Related Templates:

• Set-up a system for managing appointments with the Simple Appointment Tracking Spreadsheet
• Stay organized around big goals or tasks with the Project Plan Template

6. Friends & Family: You can’t make everybody happy. So stop trying and start LIVING.

You can either go (emotionally) broke running around trying to please everyone, or you can spend your time creating, living and being authentic to your own needs and desires. The universe rewards backbone.

It pays off to stick up for yourself, to say the hard truth, and to make the hard choices about where to spend your time and attention. It pays off in sanity. Ease. Lightness. Sense of self. Confidence. Clarity. And cajones. You are no good to anyone if you run yourself ragged trying to please everyone.

Start with yourself so that you can give back (with gusto!) to those in your life who are worthy of your precious time, love and attention.

Related Templates:

• Just graduated or living in a new area? Brainstorm ways to make new friends with the Meet Market template

7. Dating & Relationships: Stop auditioning for other people’s lives.

Life is like Tetris: You may be a “Z” when the other party is looking for an “I” — whether it comes to dating, job interviewing or business partnerships. No one is perfect, and life is a matching process. Look for situations in which you and the other party, given that you are both imperfect, bring something to the table. The matching process requires honesty to be successful, which involves taking risks.

It can be scary to put yourself out there and say “This is who I am. Take me or leave me, as I am.” It is scary because you are putting the real you out there to be accepted or rejected by the other party (and them by you). But it’s worth it – because when two parties are a fit, it works.

Related Template:

• Dealing with a broken heart? Work through your emotions with the break-up processing template

8. Health: Something is better than nothing.

Do you ever get that paralyzed feeling when you’re overwhelmed by so much to do that you freeze and don’t do anything? Perfection or bust? All or nothing? When you catch yourself falling prey to the perfectionist’s curse – the all or nothing, gung-ho or bust mentality – remember that SOMETHING is better than NOTHING.

Even if you only work out for 15 minutes a day, you will train your body to make fitness a part of your normal routine. Heck, even if all you did was put your workout clothes on, that’s a start!

Related Templates:

• Hold yourself accountable for strong health habits with the Fitness & Activity Weekly Tracker
• Train for a big event with the Marathon / half-marathon / triathlon training tracker

9. Fun and Relaxation: If you can dream it, you can do it!

A life coach once told me that — if you can dream it, you can do it. The same goes for your ideal day and your ideal life — sometimes we get so caught in the weeds reacting to errands and emails, that we forget to focus on what we really want to create in life.

Spend some time mapping out your ideal day (no limits!) and when you’re done, reflect on ways that you can start closing the gap between your current days and your ideal. It might start with 15 minutes tomorrow, or it might mean scheduling a long-overdue weekend getaway.

Related Templates:

• Have some fun! Dream big by creating a Life Checklist (to see an example of my life checklist, click here)

10. Personal Growth: Identify who is on the committee in your brain.

This might be too woo woo for you, but many of us have a committee of voices contributing to any big decision. I recently made the difficult decision to quit Google after 5 years there to try my hand at solopreneurship, and it was one of the toughest decisions I’ve ever made. The big discussion was between my Creative Director (the one concerned with me doing my best work) and my CFO (the one concerned with making financially sound decisions).

The bottom line: neither voice is right or wrong – they represent various concerns we have about different aspects of a decision. In the end, you — the CEO — have the final say, but you might feel better to ask each of your “committee members” what they need in order to feel comfortable moving forward.

Related Templates:

• Wrestling with a big decision or paralyzed by fear? Document and work-through your concerns with the Decision-Making Template

About Life After College by Jenny Blake

An avid reader and information gopher, Jenny Blake has read over 150 business and personal development books, and have distilled their wisdom in a way that will leave you feeling inspired and ready to take action toward creating the life you really want. Instead of spending your money buying numerous books about setting goals, managing your finances and navigating your career, Jenny offers a “one stop shop” book, with short but powerful advice and exercises for every area of your life after college.

Life After College: The Complete Guide to Getting What You Want is an essential manual for every graduating college student and twenty-something looking for direction. It provides practical, actionable advice and helps you focus on the big picture of your life – on your values and aspirations – all in a rapid-fire format. Chapter categories include life (values, goals), work, money, organization, home, friends & family, dating & relationships, health, fun & relaxation, and personal growth.




11/18/11--23:42: Bit Literacy - Mark Hurst (chan 1852493)

Book Notes: “Bit Literacy” by Mark Hurst

By Josh Kaufman



This post contains my personal notes about the big ideas in Mark Hurst’s Bit Literacy. My book notes are different from many of the book summaries you’ll find on the web. Instead of following the structure of the book in question, we’ll isolate and examine the key ideas and themes that make the book useful. Along the way, I’ll tell you how I actually apply the ideas. Enjoy!

Information overload is stressful and exhausting. If your e-mail inbox is overflowing, your desktop is full of random documents, and using your computer is a daily exercise in stress and frustration, you need to read Bit Literacy by Mark Hurst.

About Mark Hurst



Mark Hurst is the author of the Personal MBA-recommended book Bit Literacy, and the founder of Good Experience and the GEL conference.

Here are 10 big ideas from Mark Hurst’s Bit Literacy…

#1: “Bit Literacy” means developing the skills necessary to use technology in a healthy, productive way.

Computer use is not an instinct – it’s a learned skill that takes effort to master. Most of us learn these skills in a very ad-hoc way. and as a result, most of us don’t use technology very effectively or efficiently. That’s a huge opportunity.

Becoming “bit literate” is the process of mastering the technology you use to do your work. The more you rely on technology to create value, the more valuable bit literacy is, so make improving your skills a priority.

#2: Bitstreams are increasing every day, but not every bitstream is relevant to your interests.

The amount of information in the world is exploding. A “bitstream” is simply a source of information – a newspaper, a magazine, a book, a blog, or your e-mail. It’s easy to feel guilty if you don’t have enough time or energy to handle it all.

Here’s the good news: it’s perfectly okay to ignore the bitstreams that aren’t relevant to your life and work. By relieving yourself of the responsibility to pay attention to every bitstream that exists, you free yourself to focus only on those bitstreams that produce results – an example of The 80/20 Principle.

#3: Bits are heavy – they carry mental and emotional weight.

Information is physically weightless, but it carries a great deal of emotional weight. When you open your inbox and see that it contains 3,657 messages, it’s very easy to feel burdened and overwhelmed. The same goes for overflowing desk surfaces and stacks of unread magazines.

#4: If not consciously controlled, bits will overwhelm you.

This is a natural consequence of ever-multiplying bitstreams and our limited time and attention. More information and less time to deal with it all means that your bitstreams will accumulate endlessly – unless you decide to do something about it.

Taking control of your bitstreams is a conscious Decision. The moment you decide to take full responsibility for the bitstreams in your life is the moment you can begin to fight the overwhelm.

#5: You must learn to “let the bits go”.

The central tenent of Bit Literacy is “let the bits go.” The more you cling to your bitstreams, the faster they’ll overwhelm you. The first step in mastering informations is to learn to let it go. Attachment is the enemy.

Letting bits go can mean anything from deleting the streams that no longer serve you do directing the bits into archival systems you trust. Whatever you do, you must begin to move the bits somewhere, so they don’t accumulate.

#6: No tool can manage your bits for you – you must take responsibility for changing how you manage them yourself.

Your computer can’t manage bits for you. It’s very common for non-bit literate people to assume that someday technology companies are going to invent a magical way to automatically manage all of your bitstreams for you. Companies like Google and Microsoft, and independent computer programmers have invented thousands of tools to help you process your bitstreams.

Bad news: automatic bitstream nirvana is never going to happen. Just like we discussed in Getting Things Done, even the best productivity system can’t make decisions for you. Bits have meaning_, and only you can learn to manage them effectively. That’s why it pays to learn a few simple methods that you can use to manage the important bitstreams in your life. (Hurst has many specific tactical recommendations, which I won’t go into – if you’re interested in learning the best naming convention to use when choosing filenames for your digital photos, I recommend blank">picking up the book.)

#7: You can deal with bits in six different ways: act, delegate, defer, delete, archive, or ignore.

When all is said and done, there are really only a few ways you can manage your bits. The first four I call the 4 Methods of Completion, which are universal. You can either take an action related to the information, defer action until later, delegate action to someone else, or delete the information with no action.

Archiving and Ignoring are new options technology offers to deal with bitstreams. An e-mail, for example, may not require immediate action, but you may want to keep it available for future reference. By archiving it in a folder or storage system, you can search for it later – out of sight, out of mind, but still available if you need it.

Ignoring is also a plausible strategy – just because a bitstream exists doesn’t mean you absolutely have to pay attention to it. Personally, I ignore things like TV, newspapers, and most magazines, since I get very little value from them. Ignoring these streams makes it much easier to pay attention to others that I find more valuable – like reading great books.

#8: The best way to start getting your bits under control is to empty your inbox.

Bit literacy starts in your e-mail inbox. If you’ve been following the latest research and expert thinking about productivity for the past few years, you’ve almost certainly heard of the importance of “Inbox Zero” – keeping your e-mail inbox empty. E-mails have a nasty habit of accumulating, to the point it’s not uncommon to have hundreds (or thousands) of unread messages crying out to be processed.

If you’re new to bit literacy, the e-mail inbox represents low hanging fruit – by clearing it out and establishing a few simple rules to keep it empty, you can start to feel better and be more productive immediately. There are two simple rules: when you read a message, it can’t stay in the inbox – it must be replied to, deleted, delegated, or archived immediately. The second is to empty your inbox by the end of every day – no exceptions.

One of the biggest reasons people keep read messages in their inbox is to serve as a reminder. Hurst came up with an innovative way to handle that issue: a service called GoodTodo.com that allows you to forward e-mails to a system that will mail them back to you at a time you specify. Using systems like these allow you to defer action on certain e-mails effectively while keeping your inbox empty. (GoodTodo is a paid service; FollowUpThen.com provides the same functionality for free.)

#9: The media diet – choose your bitstreams wisely.

Another way to start feeling less overwhelmed immediately is to prune your bitstreams. Eliminate information that’s no longer relevant. Cancel your cable TV. Throw away the pile of unread magazines, and cancel the subscription. Unsubscribe from junk e-mail, and get a better spam filter.

By reducing your exposure to low-value bitstreams, you’re preserving your attention and energy for bitstreams that are more useful and meaningful – like reading good books, catching up with friends, and finally enjoying the pictures you took on your last vacation.

#10: Eliminate friction in input and processing to manage your bitstreams most effectively.

Here’s where bit literacy can reach ninja master levels – by learning how to increase the amount of output while minimizing effort, you can fly through your technology tasks.

A good example is using keyboard shortcuts in software you use often – they only take a minute to discover, practice, and learn, but the time and effort savings they enable add up to huge productivity gains over time. (If you’re still copying and pasting text using the mouse and menu dialog, you’re seriously missing out.)

The same principle applies to a skill as straightforward as touch typing – if you’re hunting and pecking on the keyboard with one finger, you’re never going to be as productive as someone who can type 100+ words per minute without effort. If you use the computer a lot, learning to touch time will drastically improve your productivity. (I recommend this game to get you started – it’s simple, but fun.)

There are also tools – Hurst calls them “bit levers” – that can help you automate everything from typing to complex sequences of commands. One of my favorites is an application called TextExpander, which can automatically insert pre-defined blocks of text when you type certain abbreviations.

For many of the tasks required in my work, like programming e-mail newsletters, tools like TextExpander are a godsend – all it takes to create a basic e-mail template is three keystrokes in a text editor, not hours of programming. Macros and automation programs can save you hours of unnecessary effort.

Anything that you can do to reduce the amount of time or effort it takes you to accomplish your technology task is a great investment. Make it a priority to master the art of bit literacy, and you’ll be amazed at what you can accomplish in the time and effort you have available.

This summary was created by Josh Kaufman, an independent business teacher and author of The Personal MBA: Master the Art of Business. To receive Josh’s notes on the best business books available and other Personal MBA blog updates, be sure to sign up for the Personal MBA newsletter – it’s absolutely free.




11/18/11--23:42: Deep Survival - Laurence Gonzales (chan 1852493)

Book Notes: “Deep Survival” by Laurence Gonzales

By Josh Kaufman



This post contains my personal notes about the big ideas in Deep Survival by Laurence Gonzales. My book notes are different from many of the book summaries you’ll find on the web. Instead of following the structure of the book in question, we’ll isolate and examine the key ideas and themes that make the book useful. Enjoy!

At first blush, this book has absolutely nothing to do with business – it’s a book of wilderness survival stories. Dig a little deeper, however, and you’ll find a wealth of principles that explain how human beings get into trouble… and how they survive the worst.

Here are 10 big ideas from Deep Survival…

1. Humans notice patterns in the world, simulate potential consequences, and make predictions about what will happen next – constantly and automatically.

The human mind is essentially a prediction machine. Every moment of every day, your brain is collecting information about the world around you. Your mind’s pattern matching capability isolates the important parts, and your capacity for mental simulation helps you figure out what to expect.

Our pattern matching and mental simulation capabilities evolved to keep us alive. The better we’re able to predict what’s next, the better we’re able to stay safe and take advantage of opportunities.

2. When our mental models don’t accurately reflect reality, we can suddenly find ourselves in big trouble.

Your mind’s ability to predict what happens next is limited: it’s only as good as the accuracy of the information you have and the patterns stored in your memory. If a fact is wrong, or a pattern is not quite accurate, you can find yourself in dire straights very quickly.

In business, even markets that have been solid for decades can experience sudden and extreme difficulties. Publishing was a stable and profitable business for hundreds of years – until it wasn’t. Housing prices always went up – until they didn’t.

3. You must train yourself to see what’s really happening and changing around you without freezing or denying the truth of the situation.

When the environment around you changes, your mental models must change along with it. Failing to update your patterns and predictions can lead you to make disastrous decisions.

Unfortunately, threat lockdown makes us prone to freeze when we face the unexpected. Gonzales calls the situations that trigger threat lockdown the "Four Poisons of the Mind: Fear, Confusion, Hesitation, Surprise.

4. Always have a backup/failsafe/contingency plan.

Since we’re not omniscient, unexpected situations will always arise – some very good, some very bad. You never know when or where something bad will affect you, so it pays to be as prepared as possible in advance.

Fail-Safes and backup plans are invaluable tools. Having resources in reserve or a retreat/regroup option at the ready helps cover you in the event of disaster.

Here’s the catch – your fail-safes and backups have to be prepared in advance. If your computer hard drive crashes, it’s too late to look into backups. A little planning and preparation now can save you a world of hurt later.

5. Sunk costs can kill you – know when to walk away.

Sometimes, it’s not worth pushing a project to completion. If you’re a day’s climb from summiting Everest and a killer storm blows in, you’re better off descending… and living to climb another day.

It’s important to realize how difficult these decisions can be in the moment – and be emotionally prepared to make them. Sunk Costs kill because we’re emotionally invested in the result we’re seeking, so we throw caution to the wind and push forward. That’s a recipe for disaster.

Define your success criteria in advance, and if something critical changes, be prepared to walk away.

6. Learn enough about what you’re doing to recognize early warning signs.

Ignorance in certain fields is fatal. If you don’t know what’s important enough to be life-threatening, you can find yourself in a great deal of trouble.

For example, one of the biggest threats nature presents to humans is hypothermia: a life-threatening drop in body temperature. When you’re about to go for a hike, hypothermia is the last thing on your mind, particularly if it’s a pretty day.

If a mid-afternoon thunderstorm strikes, chilling winds and soaked cotton clothing can create hypothermic body temperature very quickly. A little advance preparation and knowledge can give you the foresight to do things to reduce the risk, like wearing wool instead of cotton and packing rain gear.

In the same way, what you don’t know about running a business can sink your venture. Here’s an example: there are three primary causes of business failure: running out of purchasing power, financial insufficiency, and irreconcilable differences between business partners. If you’re not aware of these common issues, and how to prevent them, you increase the probability you’ll experience them accidentally.

A little knowledge can help you prevent these common mistakes. For example, books like Accounting Made Simple can help you understand your business financial records, while The Partnership Charter can help you think through the details of establishing a business relationship and agree on certain decisions before things get ugly.

7. Excitement can be more dangerous than fear – impulse control is critical.

Often, it’s the things that make us excited that present the greatest risks. Neurotransmitters called catecholamines are released whenever we notice something exciting – it’s the way our brain primes our body for action.

This neural response happens automatically, even if what we’re excited about isn’t a good idea. A vivid story in the book illustrates this point: a group of snowmobilers roared ahead when they saw a wide-open area of snow, even though they were rationally aware of an avalanche risk. Their excitement buried them.

Potential business opportunities and partnerships are exciting, and they prompt the same release of pleasurable neurotransmitters. Evaluating the direct and counterparty risks before signing on the dotted line is absolutely essential if you want to stay out of trouble.

I’ve found a mandatory waiting period (usually 48-72 hours) before committing to major decisions or projects a prudent strategy. It’s long enough to ensure you evaluate the risks dispassionately, but not so long that it stalls the deal.

8. When the going gets tough, keep calm and carry on.

When something unexpected or negative happens, Threat Lockdown is your worst enemy. Your first priority is to assess your current situation, and focus on keeping your wits about you.

Stop, think, observe, and plan. Keep yourself busy to avoid panic. Use Scenario Planning to consider your options, and Counterfactual Simulation to sanity test potential courses of action before you move forward.

9. Do everything you can to maximize your flexibility and resilience.

A little preparation goes a very long way. Knowledge, tools, and skills make you more able to withstand sudden changes, and more able to take advantage of unexpected opportunities.

The more you prepare, the more resilient you become. Preparation, however, has an opportunity cost – spending too much is sub-optimal. The more basic skills, tools, and knowledge you possess, the better the probability of success.

10. Positive Mental Attitude is the key to survival.

No matter how bad things are, you must continue to have an unshakable faith that you’ll find a way to make things work. This isn’t a form of denial: you still need to accurately assess the current situation. Pretending things aren’t bad doesn’t help you.

“Positive Mental Attitude” is different – a belief in your ability to survive the situation, and a commitment to do whatever it takes to live to see another day. It doesn’t matter whether you’re fighting for your survival or trying to find a job after being laid off – having confidence in your ability to prevail makes an enormous difference.

Never give up on yourself, or give up hope that a solution will be found. You can handle this.

This summary was created by Josh Kaufman, an independent business teacher and author of The Personal MBA: Master the Art of Business. To receive Josh’s notes on the best business books available and other Personal MBA blog updates, be sure to sign up for the Personal MBA newsletter – it’s absolutely free.




11/18/11--23:42: Self-Directed Behavior (9th edition) - David L. Watson and Roland G. Tharp (chan 1852493)

Self-Directed Behavior (9th edition) – David L. Watson and Roland G. Tharp



We all have things about ourselves we’d like to improve, but changing behavior is often very tricky business. The spirit may be willing, but the flesh is often weak, and our efforts to change sometimes end in frustration. Feeling bad about yourself doesn’t help, either.

There’s no need to start channelling your inner drill sergeant: Self-Directed Behavior (9th edition) is an extremely useful summary of the latest research in successful self-improvement and behavioral modification.

Watson and Tharp have done a masterful job of summarizing all of the latest findings in science and psychology that can help you change your behavior – and make those changes stick. You’ll learn what self-regulation is and why it’s important, how to choose useful goals and anticipate obstacles, how to observe yourself, how to examine the antecedents and consequences of particular behaviors, and how to solve problems and prevent relapses once a behavioral change is made.

Self-Directed Behavior (9th edition) can help you stop wasting valuable energy on behaviors that don’t serve you, and redirect that energy to behaviors that support the kind of life you want to live.




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11/18/11--23:42: Getting Things Done - David Allen (chan 1852493)

Book Notes: “Getting Things Done” by David Allen

By Josh Kaufman



This post contains my personal notes about the big ideas in David Allen’s Getting Things Done. My book notes are different from many of the book summaries you’ll find on the web. Instead of following the structure of the book in question, we’ll isolate and examine the key ideas and themes that make the book useful. Along the way, I’ll tell you how I actually apply the ideas. Enjoy!

If you’re ready to stop stressing and start accomplishing your goals, David Allen’s Getting Things Done can help you create a simple, effective personal productivity system.

About David Allen



David Allen is the author of the Personal MBA-recommended book Getting Things Done_, as well as Ready For Anything_, and Making It All Work. For more information about his work, check out the David Allen’s website.

Here are 10 big ideas from David Allen’s Getting Things Done…

1. If your day-to-day life is out of control, it’s almost impossible to think strategically or plan effectively.

When you’re feeling overwhelmed about how much you have to do (and who isn’t, really?), it’s difficult to focus on ensuring your life and work is moving in the direction you want to go. That’s why it’s important to get control of your daily tasks before working on your big-picture life planning.

GTD is a “bottom-up” approach to productivity. The goal is to establish a sense of comfort and control over the work that’s on your plate right now, so you can free up some mental energy and space to think about the big stuff.

2. Define what being “done” looks like.

Most of the tasks people keep on their to-do lists are “amorphous blobs of undoability” – commitments without any clear vision of what being “done” looks like. That’s a huge problem – your brain is naturally designed to help you figure out how to do things, but only if you know what the end point looks like.

Everything you’re working on should have a very clear stopping point – a point where you know you’re done. If you don’t know what that point looks like, you’ll find it very difficult to make any progress at all. When you’re having trouble making progress, first clarify what being done looks like.

3. Mental work has five distinct phases: Collect, Process, Organize, Do, and Review

Not all work is the same. There are five separate phases of effective work:

• Collecting is the act of gathering inputs: resources, knowledge, and tasks. You’ll have a much easier time making use of your available inputs if they’re all in one place before you begin.
• Processing is the act of examining your inputs: what you can do with the resources at your disposal. This is where you start separating things according to what you’re planning to do next: tasks, projects, future plans, and reference information.
• Organizing means taking the results of your processing and putting it in a system you trust, so you don’t have to remember it all. Tasks go on your to-do list, projects go on a projects list, future plans go into a tracking system, and reference information goes into a file or database you can access easily.
• Doing means working through the tasks you can accomplish right now.
• Reviewing means examining the results of your work, revising your strategy, and improving your systems for better results.

Keep the phases deliberately separate, and you’ll get a lot more done.

4. Get everything out of your head.

Many people try to keep track of everything they need to do in their mind, which is a big mistake. Our brains are optimized for fast decision-making, not storage. Trying to juggle too many things in your head at the same time is a major reason we get stressed out when there’s a lot going on: we’re using the wrong tool for the job.

The best way to stop mentally thrashing and start being productive is to spend a few minutes putting everything on your mind onto paper. You can write or draw – whatever works for you, as long as you can see it when you’re done. Once the information is out of your head, it’s far easier to figure out what to do with it. Even 10 minutes of Externalization can help you feel less freaked out about your workload.

Of course, it’s better not to be freaked out in the first place, so make it easy to capture what you’re thinking on paper. I carry a wallet that has a space for 3×5 index cards and a pen – whenever I have an idea, it’s easy to capture it, even if I don’t have my notebook or computer with me at the time. If you reduce the Friction you experience when capturing ideas, you’ll naturally capture more of them.

5. Projects and tasks are two different things: track them separately.

A major mistake that most people make when keeping track of things to do is conflating tasks and projects. That’s a good way to feel overwhelmed fast – many things can’t be accomplished in one sitting.

For example, I just finished the book I’ve been writing for a little over a year. If I had “write the book” on my to-do list, I’d quickly be overwhelmed – the project was just too big. Instead of “failing” to accomplish that to-do for a year, it’s far better to treat it as a project – something that takes more than one task to accomplish. I can’t “write the book,” but I can complete a small section of the book in one sitting.

Since projects and tasks are two different things, it’s best to keep track of them separately. Personally, I carry a small notebook with me to record active tasks with 3×5 index card inside that lists my active projects. The index card is just the right size to list 4-8 active projects – if I have more than that, I know I’m spreading myself too thin.

6. Focus on the Next Action required to move forward.

Big projects have many steps, and can be overwhelming in their complexity. The key to handling these projects is not to focus on everything that has to be done – that’s a great way to freak yourself out.

Instead, just focus on the very next physical action you need to do to move the project forward. It may be looking up a piece of information, making a phone call, or accomplishing a small task. Whatever it is, it’ll move you closer to completing the project, so don’t worry about everything else – focus only on what you can do right now.

7. Use the “2 Minute Rule” for small tasks.

Don’t worry about tracking small tasks – if you can accomplish the task in less than two minutes, just do it! Writing down every little thing you have to do takes more time than it’s worth – if you need to send a 30-second reminder e-mail to someone, there’s no sense in taking 20 seconds to write it down when you could just get er done.

Personally, I expand this to 5 minutes – the principle is the same. Your goal is to get things done, not to flawlessly capture each and every little thing in your perfectly designed system.

8. Use Reference and Someday/Maybe files for things that have no immediate next actions.

There’s no sense in keeping FYI or long-term dreams in your active daily task tracking system. Reference files are great for storing information you don’t have to act on right now. These files can either be physical or electronic – for example, I keep important paperwork and legal documents in a fire-proof safe, and electronic files and websites in a file on my computer or in Evernote.

Someday/Maybe lists are great for deferring ideas that you’d like to work on someday, but you’re not committing to right now. I have ideas about fun new things do to every day – way more than I have time or energy for. Instead of losing these ideas, it’s far better to capture them in a reference file you can look through later, when you have more capacity. When you’re ready to commit to a new project, the someday/maybe gets promoted to an active project.

9. Build a trusted system that helps you keep track of your commitments.

Your mind keeps things in working memory if it thinks you’ll lose them if it doesn’t. That’s why building a productivity system is important – it helps your mind let go of tracking unnecessary details so you can focus on the task at hand. That’s why Externalization works – when you put something on paper in a place you know you’ll be able to find later, you’re freeing mental resources that can be put to better use elsewhere.

An effective productivity system consists of the following:

• A list of active tasks – next actions you’ve committed to accomplishing in the next few days.
• A list of active projects – 4-20 project you’ve committed to accomplishing in the next few weeks.
• A calendar – commitments to meet with other people in the near future.
• A someday/maybe list – ideas you’d like to explore, but not right now.
• Reference files – information or documents you’ll need to refer to in the future.
• A capture device – some way of capturing ideas or next actions as you think of them.

That’s it, really – you can use any number of tools for the above, as long as they cover those basic needs. Personally, I use a notebook for active tasks, a 3×5 index card in that notebook for projects, the calendar on my computer, someday/maybe and reference files in Backpack and Evernote or physical files, and my 3×5-sized wallet for my capture device.

10. Schedule non-negotiable time for a Weekly Review.

Life moves fast – we often have so much to do that’s it’s difficult to take a step back and examine whether or not we’re getting the results we want. That’s why it’s extremely important to schedule some time each week to do a “Weekly Review.”

Here are a few things you should include in your weekly review:

• Process and organize – anything you’ve collected but haven’t handled yet.
• Review your active tasks – are there any to add, delegate, defer, or delete?
• Review your active projects – are there any to add, delegate, defer, or delete?
• Review your calendar – are there any meetings to add, delegate, defer, or delete?
• Someday/Maybe – anything to add or promote to an active project?
• Reference Files – anything you need soon? Anything to add or update?
• Goals – are you moving in the right direction? Are you making progress? Are any changes necessary?

Don’t skip this review – it’s extremely important if you want to decrease your stress levels. Personally, I find it best to schedule my review for the end of the week: Friday afternoon or Saturday morning. It’s a great way to wrap up the week, feel good about what you’ve accomplished, plan for the next week, and set yourself up for a relaxing weekend.

BONUS TIP: developing an effective personal productivity system takes time and experimentation.

Many people get frustrated when adopting GTD because it takes so long to get everything under control. Cut yourself some slack: GTD is a collection of habits, and habits take time to develop. Instead of trying to install everything at once, work on improving in one of these areas until it’s effortless, then focus on installing the next habit. In time, you’ll master them all.

Also remember that the goal of GTD is to make it easier to do work that matters – not procrastinating by endlessly improving your system instead of doing productive work. Try to avoid succumbing to “productivity porn” – experiment constantly, but remember that the most effective systems have the same thing in common: they’re usually the simplest thing that could possibly work. When in doubt, err on the side of doing less.

This summary was created by Josh Kaufman, an independent business teacher and author of The Personal MBA: Master the Art of Business. To receive Josh’s notes on the best business books available and other Personal MBA blog updates, be sure to sign up for the Personal MBA newsletter – it’s absolutely free.

(Photo credit: hbrinkman on sxc.hu.)




11/18/11--23:42: Uncertainty - Jonathan Fields (chan 1852493)

Uncertainty: Turning Fear and Doubt Into Fuel for Brilliance – Jonathan Fields

Every now and then, I invite cool people who have written books to share their knowledge directly with Personal MBA readers. Jonathan is a friend of mine, and you’ll find his research into the benefits and detriments of uncertainty very useful, regardless of what you do for a living. Here are Jonathan’s personal notes on the key ideas in Uncertainty. – Josh

About Jonathan Fields

Jonathan Fields is a lawyer turned serial-entrepreneur, speaker and author of Uncertainty: Turning Fear and Doubt Into Fuel for Brilliance. He’s been featured in The New York Times, Wall Street Journal, BusinessWeek, FastCompany, Inc, Entrepreneur, USA Today, Reuters and thousands of websites, TV and radio shows that don’t impress his daughter. Here’s more about Jonathan.

Here are 10 big ideas from Uncertainty: Turning Fear and Doubt Into Fuel for Brilliance.

1. Too much confidence kills innovation.

It’s great to be self-assured, but overconfidence or certainty can also stifle creativity and innovation. When you have a high degree of confidence and are certain in your ideas and plans, you tend to close the door on the possibility that there’s something better to be created or discovered. So, the more certain you are, the less likely you’ll be to see the myriad of paths, ideas and alternatives that present themselves along your creative journey.

You may well get to your specific vision faster, but you’ll also very likely have ignored opportunities that would have made your endeavor substantially better than the original vision. Confidence can be a great catalyst for action, but it can also be the source of “idea blindness.” Be confident, but always stay open to the possibility that you don’t always know best.

2. There is a direct connection between your ability to handle uncertainty and creativity.

Your ability to dance with uncertainty has actually been shown in research to be strongly correlated with creativity. Great ideas, solutions and businesses require percolation. You work hard, you research, explore and act, but often it takes time and space for the big insights to bubble up.

The longer you’re willing to live in the question, the more likely you’ll be to come up with better answers. And, the better a position you and your business will be in to then leverage those ideas and solutions to excel and more effectively differentiate what you do.

3. Without intervention, uncertainty causes pain.

While action in the face of uncertainty is a necessary part of every creative endeavor, our brains experience this as suffering. The reason is simple, recent fMRI studies show that your amygdalae, a part of the brain involved in fear and anxiety, lights up when you’re required to make choices in uncertain circumstances.

In an entrepreneurial or business setting, this makes most people either slow their progress to a crawl or race to the end in an effort to eliminate the discomfort. Problem is, this response also often paralyzes or stunts the potential of the endeavor.

The better response is to train in the alchemy of fear: to learn the strategies and practices that allow you to harness and ride, rather than hunt and kill the butterflies. Then, go at a pace determined more by information, intuition and intelligence than by fear and anxiety.

4. We all have strong creative orientations for either insight or production.

Most of us arrive in adulthood with a strong creative orientation. We’re either blank white page creatives – we come alive though insight, ideation and disruption – or we’re more drawn to refinement, expansion and production.

When we find work that allows us to spend most of our time in the orientation that feels natural to us, we hum along pretty happily. But, when we are forced to cross over to “the other side,” we feel huge resistance. Problem is, unless you are in absolute control of your organization, work allocation and culture, at some point (if not often), we all have to spend time in the part of the creative spectrum that battles with our creative orientation.

Thankfully, there are a lot of ways to reclaim your sanity and quality of work when you’re forced to operate in that place. We’ll explore a number of them below.

5. Most endeavors don’t fail because we don’t know the field, they fail because we don’t train our minds to succeed.

How much time, money and energy have you spent learning your specific craft, deepening your knowledge of the field you operate in? Thousands of hours, tens or even hundreds of thousands of dollars (maybe even millions)? Think about it.

Now, how much time, money and energy have to spent developing the specific mindset skills, personal practices and workflow strategies that will allow you to operate on all cylinders under demanding situations, push through and even harness the endless waves of challenge and uncertainty that are a part of every quest to do something great?

Success isn’t just about mastery of field-specific content, it’s about mastery of your mind and your environment. Train that side of the equation equally if not more.

6. Your mood has a significant effect on your brain’s ability to create and solve problems.

Not only is being grumpy, irritable and anxious an overall unpleasant way to exist, it also makes you “situationally stupid.”

In a series of experiments, groups of individuals from toddlers to doctors were primed to create a mood that was either positive and upbeat or negative and disparaging, then given problems to solve and challenges to create.

Across all ages and education levels, the negative primes significantly hurt performance and creativity. Even more recent recent research shows that positive mood increases the ability to solve problems via insight, while anxiety does the exact opposite.

Translation – your bad mood isn’t just making you unhappy, it’s making you dumb and poor.

7. Ritual can help counter the anxiety and fear that rides along with creation.

Without intervention, most people default to fear and anxiety in the face of uncertainty. Creating rituals around not only your work, but your life outside of your work allows you to drop “certainty anchors,” things that happen every day the same way, things you know will always be there and that create a series of mini opportunities to touch stone throughout the day.

These certainty anchors help you float higher up into the creative ether and stay there long enough for the good stuff to come, knowing that you’ve got enough tethers to solid ground in other parts of your life to create a foundation of baseline calm to return to.

Rituals can be as simple as eating the same thing for breakfast or, in the context of work, sitting down to write at the same time every day.

9. Mindfulness and exercise are extraordinary mindset and innovation force-multipliers.

For decades, meditation was viewed as something wacky koombaya types did and exercise was seen as something to be suffered in the name of rock hard abs, looser-fitting clothes and disease prevention. Over the last 15 years or so, though, a substantial body of research on both modalities has revealed a set of benefits that not only move meditation out of fringe-cultures, but position both activities as critical to an optimally functioning brain.

Meditation exercises not only help decrease anxiety and fear and increase mood, they also enhance executive function, problem-solving, creativity, reaction time and, very new research now shows they may even be able to generate new brain cells. In light of this, it’s hard to understand how anyone who wants to perform at their potential might justify not bringing these practices into their daily lives.

10. With rare exception, great creators are trained, not born.

There might be a very thin slice of the population who were put upon the planet with a genetic predisposition that allows them to not only tolerate, but invite and even amplify uncertainty in the name of creating great things, without also having to endure the unease that most other feel.

Most of us, though, including many world-class creators aren’t members of that thin slice. We love to create, but we feel like we pay an emotional toll for the quest to go big.

Thankfully, there exist a set of personal practices, workflow optimizations and environmental and culture adaptations that effectively build uncertainty scaffolding, allowing anyone to go to that place where genius is birthed without feeling like they’re hanging on to their emotions for dear life.

Your challenge, if you want to do great things in the world, is to build scaffolding strong enough to allow you to soar.

If you liked this post, be sure to pick up a copy of Uncertainty: Turning Fear and Doubt Into Fuel for Brilliance today. Also, be sure to take Jonathan’s Creative Mindset Audit.




11/18/11--23:42: 5 Secrets of Limitless Personal Growth (chan 1852493)

5 Secrets of Limitless Personal Growth



For the past six years, I’ve been helping entrepreneurs and business owners improve their skills and increase their confidence – without expensive credentials or unnecessary detours. Here are five secrets that will help you grow – on your own terms.

1. You Don’t Need Permission

It’s often easier to feel confident about what you’re doing when you have a credential. (Example: “When I have my MBA, people will take me seriously as a manager/entrepreneur…”)

Here’s the secret: you don’t need the credential. For many, formalized education is less about learning new things and more about feeling insecure. Instead of moving forward, you’re relying on some outside authority to proclaim that you’re now “good enough” to do what you want to do.

That’s baloney – you’re already good enough. True story: there once was a doctoral student named Joseph Campbell who wanted to study world mythology for his dissertation. His professors told him to study something else. Instead of accepting his fate and choosing another (less interesting) topic, he left school completely, lived in a small cabin in upstate New York, and spent 12 hours a day studying and writing about what he was interested in.

After spending 6 years, Campbell was offered a full professorship at Sarah Lawrence College (sans-doctorate), and quickly became the world’s leading expert in world mythology. You don’t need anyone else’s permission to do what you want to do – begin today.

2. “Do It Yourself” = Better Results

My wife, Kelsey, is a phenomenal cook. She’s never taken a course, but she has an amazing repertoire of skills and knowledge gained over time through reading and playing in the kitchen. Every once in a while, a recipe will flop, but that’s okay – it’s always a learning experience. More often, it’ll be a masterpiece. (Our friends still talk about the Pumpkin Curry Bowls.)

The Personal MBA is a DIY approach to business education – it’s taking responsibility for learning into your own hands. The best way to learn about business is to spend time gathering the most useful concepts you can, then putting them to use in the real world. Experience teaches better than any professor can.

Sure, you’ll make a few mistakes as you go along – everyone does. The important distinction is that, instead of doing meaningless homework, you’re actively building improving an actual business. You can learn more (and have more fun) by doing it yourself.

3. You Learn What You Care About

When I was in junior high, we were required to take a Home Economics class. Most of the classes involved cooking and sewing. I viewed Home Ec as a waste of time, and as a result, I spent most of that time messing around and doing other projects. Sadly, I didn’t retain much from that class.

A few years later, I was in college, and I was suddenly 100% responsible for my own housekeeping. All of a sudden, I cared very much about how to cook and how to iron – and I learned what to do (and what not to do) very quickly.

The same goes for personal growth. When it comes to learning, you will always learn and retain information concerning subjects you care about most effectively. The best reason to learn something is not because someone else says it’s important: it’s because you need it to accomplish something you have your heart set on.

If you don’t care, you won’t learn. If you don’t learn, you won’t grow.

4. There’s ALWAYS a Better Way

The world, for better or worse, is a suboptimal place. Things break. Meetings take too long. Projects get delayed. Products are hard to use. Businesses underperform. Careers go off track.

Here’s the good news: everything in your world can be improved, if you choose to spend time and effort improving it. Every single business that exists survives and thrives by improving the suboptimal.

What are you trying to improve? In the immortal words of Thomas Edison: “There’s ALWAYS a better way – find it!”

5. Personal Growth is a Path, Not a Destination

Personal growth, whether it involves business or anything else, is a never-ending process. There’s never a point where you’ll say, “Okay, I’m done – no more learning for me.” Every new concept you come across is a gateway to thousands of other opportunities. That’s what makes personal growth so fun and rewarding… there’s always something new to explore.

Learning about anything is a path – there’s no end to the process. Sure, there will be milestones: reading a book; mastering a new skill; launching a business. Eventually, however, you’ll find there’s a new path for you to take, and the journey continues. There’s never a limit to how much you can grow.

(Photo credit: manitou on sxc.hu)

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Josh Kaufman is an independent business professor and author of the upcoming book The Personal MBA: A World-Class Business Education in a Single Volume. You can find more of his work at personalmba.com, and you can take his 12-week “Business Crash Course” at crashcourse.personalmba.com.

Get Free Business Book Summaries and Training:




11/18/11--23:42: What it Really Takes to be an Entrepreneur (chan 1852493)

What it Really Takes to be an Entrepreneur

“When things get too complicated, it sometimes makes sense to stop and wonder: Have I asked the right question?” – Enrico Bombieri

What does it take to start your own business? Less than you think…

1. Create something other people want or need. (If you don’t know, test ideas in low-risk ways until you find something that works.)

2. Attract the attention of prospects, and make them interested in learning more about what you’re offering.

3. Encourage your prospects to trust you enough that they give you money in exchange for your offer.

4. Deliver the value promised in a way that makes your customers happy.

5. Collect more money than you spend, and enough to sufficiently compensate you for the time/energy/money invested.

That’s it. Those are the Five Parts of Every Business. Anyone who tells you entrepreneurship is more complicated than this is either trying to impress you or sell you something you don’t need.

What’s holding you back from getting started right now?




11/18/11--23:42: Building a Business That Supports Your Life (chan 1852493)

Building a Business That Supports Your Life

by Josh Kaufman



The last four months have been very interesting in the Kaufman household.

My book is selling extremely well – it’s been the #1 bestselling business training book in the world since launch, and it was the overall #1 bestselling business book at WH Smith in the UK for the past few weeks. General business training is difficult to write about, so there’s not much competition – I expect to hold #1 in the category for quite a while.

I recently spoke at Google and IBM; my reading at SXSW was a big hit. My coaching business is exploding. My online course and live training programs are selling briskly. I have several exciting new projects on the horizon.

It’s lovely when planning and effort pay off.

Kelsey, my wife, is a successful entrepreneur in her own right – she produces online yoga training programs. Her first project, YogaAnatomy.net, is changing how yoga teachers around the world learn the basics of their craft. She also has several promising new projects in the queue.

On top of it all, we welcomed Lela, our first child, into the world four months ago – 10 days before my book was published. Caring for an infant in the midst of two major product launches was quite the experience.

In many ways, our new daily schedule is crazy-making. Lela requires constant attention from at least one of us pretty much all the time. We’re largely past the new parent sleep deprivation phase, but setting aside large blocks of uninterrupted time for work is difficult.

Kelsey and I are each running a full-time business on ~20 hours per week, plus whatever time we’re able to sneak in when Lela is napping.

It’s not easy… but it’s worth it.

One of the primary reasons I left the corporate world was wanting to spend a significant amount of time with my children. I knew way too many co-workers who kissed their sleeping children on the forehead at 6:00am before heading off to work, only to kiss them on the forehead at 9:00pm when they arrived home.

I didn’t want that life.

Now that Lela is here, I spend every morning with her while Kelsey works. We read books and sing songs. We practice sitting and standing up. She bounces in her bouncy chair while I grind coffee beans. She takes a nap strapped to my chest as I do laundry. In the morning, I’m 100% dad.

In the afternoon, Kelsey takes care of Lela, and I work with my clients, write, do interviews, answer email, and make progress on projects. Evenings consist of dinner, family time, reading, and an early bedtime.

Spending time with Lela involves a tradeoff. We could certainly afford to hire a nanny so we could work more – we’d certainly make more money if we went that route. But that’s not a life that appeals to us.

Kelsey and I have structured our businesses to support the life we want to live. Time with Lela comes first, not last. If tradeoffs must be made, they are made in her favor. We work within these constraints as best we’re able, and experiment to find ways to make day-to-day life easier. It’s often difficult, but it’s working.

I had a conversation along these lines with one of my clients recently. He’s been feeling psychological pressure to keep growing his company, even though he’s very happy with the current size and workload. As a successful CEO, he feels driven to keep pushing as far as he can go, even though the company is privately owned and under his full control.

The truth is he can run his company however he sees fit. The company is financially sufficient and very profitable, is small enough to be managed efficiently via a flat organization, and everyone works as a team. The current business structure is working very well.

Growing the company would require bringing in more work, which would require hiring more employees. More employees means more financial overhead and more communication overhead. More overhead means big changes as the business structure and company culture changes to accommodate the workload.

When I asked my client whether or not growing the company would help him live the life he wanted to live, the answer was an immediate no. Seeking to make the company larger might add to his bottom line, but it would subtract from his soul. Having capacity for creative side projects and not freaking out over payroll every month is worth more to him than an incremental dollar.

There are all sorts of ways to improve a company other than revenue and number of employees. By focusing on finding ideal clients, it’s possible to optimize a business for things other than profit maximization, like enjoying the process of working or having a high return on invested time.

Some things are worth more than money. Structure your business to serve your life, not your life to serve your business. The tradeoffs are worth it.




11/18/11--23:42: The Economist Numbers Guide - Richard Stutely (chan 1852493)

The Economist Numbers Guide – Richard Stutely



Business analysis is a subject of many concepts: time-value of money, discounted cash flow valuation, amortization, depreciation, etc. The Economist Numbers Guide is a handy reference that will help you use these concepts appropriately and explain them clearly to your colleagues.

The Economist Numbers Guide is a short, but comprehensive book that contains everything you need to know about business mathematics. Inside, you’ll find information on arithmetic, notation, financial structures, investment analysis, inflation, interest, distributions, graphing, forecasting, sampling, testing, decision trees, Markov chains, and even advanced subjects like linear programming. You’ll be hard pressed to find a business situation that requires math this book doesn’t cover well.

The Economist Numbers Guide is the reference book I rely on to ensure I’m using business analysis techniques properly and explaining them clearly to other people. If business analysis is part of your job, I highly recommend keeping this book close at hand.




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11/18/11--23:42: 10 Days to Faster Reading - Abby Marks-Beale (chan 1852493)

Book Notes: “10 Days to Faster Reading” by Abby Marks-Beale

By Josh Kaufman



This post contains my personal notes about the big ideas in Abby Marks-Beale’s 10 Days to Faster Reading. My book notes are different than many of the book summaries you’ll find on the web. Instead of following the structure of the book in question, we’ll isolate and examine the key ideas and themes that make the book useful. Along the way, I’ll tell you how I actually apply the ideas. Enjoy!



Abby Marks-Beale is the author of the Personal MBA-recommended book 10 Days to Faster Reading, as well as The Complete Idiot’s Guide to Speed Reading. If you want to fly through your reading pile, RSS reader, and e-mail inbox at breakneck speed while maintaining consistently high levels of reading comprehension, these speed reading books are for you.

For more information about Abby’s work, check out:

• Rev It Up Reading – Abby’s new online reading skills course.
• The Corporate Educator – Abby’s business skills website.
• 10 Days to Faster Reading – Personal MBA-recommended guide to improving reading speed and comprehension.

Here are ten big ideas from Abby Marks-Beale’s 10 Days to Faster Reading…

#1. Linear Reading is Inefficient – You Don’t Have to Read Every Word to Extract Value from Non-Fiction Material

The purpose of non-fiction reading is not to read every word on every page – it’s to extract useful information from the material. Growing up, most of us learned to read by starting with the first word on the first page, then continuing to read until we get to the last word on the last page. Unless you’ve learned structured non-fiction reading techniques, you probably still read this way, even though it’s extremely inefficient.

Efficient reading is non-linear – a series of quick skims, skipping around, referencing, and note-taking. The purpose is not 100% eye-coverage of the text: it’s to extract all of the useful information that’s relevant to what you want to do.

It’s easy to get hung up on “reading the book” as turning pages until there are no more pages to turn. Once you get comfortable with the idea that you don’t have work your way through the entire book linearly to benefit from your reading, you can read much faster, and put the book down when you’ve learned what you need to know.

#2. Pick Your Battles: Ruthlessly Edit Your Reading Pile

Most of us have way too much to read. Between books, newsletters, magazines, e-mail, blog posts, and snail mail, our reading pile overfloweth. Until someone invents a Time-Turner that will allow us to keep up with our reading, choices must be made.

Triage helps you read the most critical materials first. In any good hospital Emergency Room, doctors identify which patients need help first – everyone else can wait. Heart attacks get first priority; cases of indigestion can wait a while. The same principle applies to reading: you may have a large pile, but some reading material will be more important than others.

Having a sense of clarity about what you’re trying to do is necessary in order to triage your reading pile effectively. If you’ve taken the time to clearly define your goals (i.e. “what you want”), it’s much easier to figure out if reading certain materials will help you get what you want.

When I was in the middle of writing my book, I didn’t check my blog reader for over four months. That was okay: reading RSS feeds was not as important as writing chapters, so I made a conscious decision not to read them for a while. When in doubt, throw it out or defer the reading to another time.

#3. Questions Before Content: The Power of Purpose-Setting

Effective non-fiction reading does NOT start with picking up the book. You can multiply your reading effectiveness by taking a few minutes before you start reading to decide why you’re bothering to read in the first place. I call this technique “Purpose-Setting.”

Purpose-Setting is the act of deciding what you want to learn by reading this material. By figuring out what information would help you, what questions you want answered, and how you intend to apply the material, you’ll make it much easier to recognize useful information when you find it.

I’ve found the best way to purpose-set is to write down 8-10 questions on an index card or in a notebook before opening the book. This effectively programs your brain to look for the information you’re trying to find – a very important concept called “Priming.”

#4. Priming: The Benefit of a Quick Preview

Priming is the act of “programming” your brain to notice certain things about your environment. If you’ve ever been interested in a certain type of car, only to find you start seeing them EVERYWHERE you go, you know what priming feels like. The universe hasn’t unloaded thousands of new cars all over the highway – they’ve always been there, but your brain filtered them out as irrelevant. Your interest changed the filters, so you actually notice when they appear.

Priming happens unconsciously, but you can control it if you know what you’re doing. Purpose-Setting works because it gives you an opportunity to consciously “prime” your perceptual filters to notice information related to your interests. That’s what allows you to read so quickly – when you’re sufficiently primed, you can skim through a book quickly until your brain recognizes something as interesting or important. As you skim, you suddenly find your eyes stopping on the part of the text that relates to what you’re looking for. It feels like magic, but it’s just your brain doing its job.

Before you start reading, don’t skip the two richest sources of priming material in the book: the table of contents and the index. The TOC gives you information about the book’s structure, content, and order. The index, aside from being a useful reference tool, is essentially a frequency-map of the book’s key terms. If you find a term you don’t know with a large number of citations, chances are it’s important – write it down on a list of key terms before you start reading.

Purpose-Setting and Priming only take a few minutes. Once you’re done, you’re ready to fly through the book.

#5. The Thought is Faster Than the Word

The biggest barrier to faster reading is subvocalization: sounding-out words verbally instead of thinking them. Subvocalization is a useful tool in learning to read, but it’s a major speed barrier once our skills have developed. Our minds are capable of taking in written words as thoughts much faster than our ability to vocalize them.

The first step in eliminating subvocalization is realizing that you’re doing it. Pick up a piece of reading material and notice what’s happening in your mind as you read it. If you’re saying the words to yourself as you read, you’re subvocalizing. To stop, simply start reading faster: at a certain point, you’ll be going faster than you can subvocalize, and you’ll be amazed at how much you’re still able to comprehend and retain.

Realizing that you can comprehend written material without subvocalizing is a major milestone that will increase your reading speed dramatically.

#6. Your Eyes Can Absorb More Information Than You Think

Your eyes can easily take in more than one word at a time. Instead of fixating on every word, taking in groups of 3-5 words at a time can increase your reading speed without harming your comprehension. Learning to read more than one word at a time is mostly a matter of training – Marks-Beale includes many exercises that can help you learn this skill.

New speed readers tend to gravitate to eye fixation techniques because they’re concrete, but they’re not the most important part of reading speed. In my experience, Purpose-Setting and Priming are far more important – if you’re trying to get the 80/20, start there. Eye fixation naturally develops with practice and experience.

(Note: a useful tool you can use to train your abilities to read without subvocalizing and taking in more than one word at a time is Spreeder.)

#7. Take Notes for Better Comprehension and Retention

Reading is not a passive activity – it’s not like television, where your job is to simply absorb stimuli. Reading is an active mental process that can result in all sorts of unexpected insights and connections, so it pays to be ready to capture them before you forget.

Don’t hesitate to write as you read. Taking notes does two useful things: it creates an archive of your thoughts for later reference, and it helps reinforce what you learn. Personally, I find the latter most important – if I read something and then write it down, it almost always sticks in long-term memory. The idea capture / archival process is useful for application – you can spark many new ideas by reading older notes.

Note-taking can take many forms. Some people prefer to write notes in the margins of the book itself, some prefer notebooks, and some prefer capturing notes via a computer or other device. Personally, I prefer a physical notebook – it’s easy to carry and easy to reference. Regardless of what you choose, always take notes.

#8. Eliminate Distractions for Best Results

Reading quickly requires intense mental concentration and effort. Done well, it engages your total attention, challenges your skills, and requires focus. If the phone is ringing, e-mail alerts are buzzing, and co-workers are constantly interrupting you, it’s best to find a quiet, pleasant environment where you can focus for longer periods of time.

(Side note: don’t ever let a co-worker give you a hard time for reading at work. Reading is real work, and is often one of the most effective things you can do with your productive time.)

#9. Challenge the Author – Capture Your Questions and Objections

Once of the differences in reading for school and reading for your own self-education is being able to reach out to authors you respect or disagree with and get answers. Since most of us grew up reading school textbooks and assigned material in an effort to pass tests, we often forget that authors are real people who are happy to engage with their readers.

Capturing your thoughts as you read is a major opportunity to discuss and engage with the author and other interested readers. Once you’ve sketched your own thoughts regarding a book, you’re in a much better position to have interesting and useful discussions about the book with others.

I often read material twice: the first pass is non-critical, keeping a completely open mind and trying to understand the author’s key points and position. The second pass is critical: are there elements that are confusing or contradictory? Are there positions I don’t agree with? If so, I write my thoughts down for later reference and discussion.

#10. Reading is Not Enough – Focus on Applying What You Read

The purpose of reading non-fiction is not to simply read the book – it’s to learn something useful. While reading is fun (and gets even more fun as you learn these skills), it doesn’t become profitable until you start translating things you’ve read into real-world results.

After reading a good book, you should always be able to add at least 3 tasks to your active to-do or projects list. Capture these actions while you’re reading, and review the list when you’re done. Ideally, these actions should be directly related to accomplishing one of the goals you had in the purpose-setting step.

Effective Non-Fiction Reading is a Skill – The Dividends are Huge

Effective non-fiction reading is a skill. It takes some time and practice to learn, but once you get the hang of it, you’ll experience enormous gains in your productivity.

Once I learned the material in 10 Days to Faster Reading, I easily quadrupled my reading speed. Now, I can easily sit down with a book for 10-15 minutes and extract most of the valuable information from the text – a task that would previously take me at least an hour.

Here’s an experiment I highly recommend trying for yourself: go to your local bookstore or library, grab 6 books and a timer, and spend no more than 10 minutes trying these techniques on each book. At the end of the 10 minutes, go back and write down in a notebook all of the things you learned. You’ll amaze yourself – guaranteed.

This summary was created by Josh Kaufman, an independent business teacher and author of The Personal MBA: Master the Art of Business. To receive Josh’s notes on the best business books available and other Personal MBA blog updates, be sure to sign up for the Personal MBA newsletter – it’s absolutely free.




11/18/11--23:42: Personal MBA Reading List - 2010 Edition (chan 1852493)

Personal MBA Reading List – 2010 Edition

26 January 2010



Today, I’m happy to announce the 2010 updates to the Personal MBA Recommended Reading List – the Personal MBA’s sixth edition. While you’re here, be sure to check out the 99 best business books available, read the updated Personal MBA manifesto, and take advantage of the NEW official Personal MBA Reading List Tracker and other exciting updates…

We’ve Come a Long Way, Baby

The Personal MBA Recommended Reading List has come a very long way since the 2005 edition. The list has doubled in scope, from 42 to 99 books, which has enabled the list to cover the fundamental business concepts every self-educated business professional needs to understand to be successful. Looking back to early versions of the list, it’s easy to see that the current version is the most comprehensive and well-balanced yet.

We’ve also added some great usability features to the website, like navigation buttons so you can browse through the list more easily. These changes make the site much easier to explore – special thanks to Kelsey Kaufman, whose help made this possible.

2010 Reading List Additions

The 2010 reading list features ten new books, each of which strengthen the reading list’s coverage of critical areas:

• The Human Mind: Making Sense of Behavior by William T. Powers
• Influence: The 48 Laws of Power by Robert Greene
• Entrepreneurship: Escape from Cubicle Nation by Pamela Slim
• Value-Creation: Four Steps to the Epiphany by Steve Blank
• Marketing: The 22 Immutable Laws of Marketing by Al Ries & Jack Trout
• Sales: Value-Based Fees by Alan Weiss
• Negotiation: The Partnership Charter by David Gage
• Systems: Work the System by Sam Carpenter
• Analysis: The Economist Numbers Guide by Richard Stuteley
• Personal Development: Self-Directed Behavior by David L. Watson & Roland G. Tharp

The Future of the Personal MBA: A Slight Shift in Focus

To date, the focus of the Personal MBA has been on books – which ones you should read to get the most comprehensive and useful self-education available. I’m very pleased with the results of the past six years of research, and I think the list will be very stable for years to come. I’ll update the list as necessary, but only if a new book comes out that clearly supersedes a previous title, new editions are published, or a book goes out of print. I have no plans to expand the list beyond 99 titles.

Moving forward, the focus of the Personal MBA will shift to business concepts vs. books. Books aren’t important in and of themselves – they’re a means of teaching critically important concepts, which are more important. The Personal MBA will always have a reading list, but the time has come to focus attention on fundamental concepts you can use to build your business.

In addition, I’m in the process of finishing my first book, The Personal MBA: Master the Art of Business, which will be published by Portfolio this time next year. If you’re interested in receiving a sneak-peak of the book the moment it’s available, be sure to subscribe to the Personal MBA Insider – I have a ton of very cool things planned, and Personal MBA Insiders will experience them first.

All in all, 2010 will be a bright and shiny year for all of us – thanks for following the Personal MBA, and I’m looking forward to helping you make this a year to remember.

(Photo credit: shilders at sxc.hu)




11/18/11--23:42: The 80/20 Principle - Richard Koch (chan 1852493)

Book Notes: “The 80/20 Principle” by Richard Koch

By Josh Kaufman



This post contains my personal notes about the big ideas in Richard Koch’s The 80/20 Principle. My book notes are different from many of the book summaries you’ll find on the web. Instead of following the structure of the book in question, we’ll isolate and examine the key ideas and themes that make the book useful. Along the way, I’ll tell you how I actually apply the ideas. Enjoy!

Would you like to learn how to get more done with less effort, eliminate wasteful activities, and sell more to your best customers? Richard Koch’s The 80/20 Principle will show you how to ensure your efforts produce the best possible results.

About Richard Koch



Richard Koch is the author of the Personal MBA-recommended book The 80/20 Principle_. For more information about Richard Koch’s work, check out blank">http://www.the8020principle.com/.

Here are 10 big ideas from Richard Koch’s The 80/20 Principle…

#1: A minority of inputs lead to a majority of outputs.

Think of all of the clothes you own. Think of how often you wear each of them. It’s very likely that you have a few favorites that you wear over and over.

Now consider the contacts you have in your address book or cell phone. It’s very likely that a small group of contacts represent most of the time you spend on the long time.

#2: A minority of causes create a majority of effects.

Think of the decisions you’ve made over the course of your life. You make hundreds (thousands?) of decisions every day, but where you find yourself now can be traced back to just a few critical choices that have led to your present state.

The same goes for things like investments – most of the returns a portfolio generates comes from a few critical decisions to purchase or sell certain securities. Most of the losses a portfolio generates also come from a few small decisions.

#3: A minority of efforts lead to a majority of results.

Think of everything you’ve accomplished in your education and career so far. It’s very likely that the skills you need to do your job well are a small fraction of what you know and what you can do well, but they produce the majority of your income.

Even the projects you’re working on follow the same principle: the vast majority of the value of any project lies in just a few critically important tasks. The rest of the tasks involved don’t matter nearly as much to the end result.

#4: There are many names for this common phenomenon: The 80/20 Principle, Pareto’s Law, Zipf’s Principle of Least Effort, Juran’s Law of the Vital Few

The 80/20 Principle has been articulated in all sorts of ways by many different people, but the central idea is the same: a few things matter a lot, and most things matter very little. Personally, I prefer to refer to this concept as The Critical Few.

#5: The Critical Few – identify and build upon the 20% of efforts that produce 80% of the results.

If you want to improve your effectiveness at anything, focus only on what matters most. It doesn’t matter if you’re conducting business, working on a personal project, trying to get into a competitive position, or finding a romantic partner, or strengthening a personal relationship. There are a few things that matter a lot, and much that doesn’t matter at all.

If you intentionally set out to study what matters most, you can tremendously improve your effectiveness. You’ll spend less time, less money, and less effort – and get better results at the same time.

#6: Most of what we do is low value – eliminate or reduce the 80% of efforts that produce poor results.

The flip-side is also true: in every endeavor, there are many ways to waste your time and resources. You only have so much energy to use, so it pays to use it wisely. If something is only marginally useful, delegate or delete it.

This advice is sometimes difficult to put into practice, because it requires what Tim Ferriss (author of The 4-Hour Workweek) calls, “the art of letting bad things happen.” If it’s largely a waste of time to answer every last e-mail or tie up every loose end, that doesn’t mean you won’t experience repercussions from skipping them. On the balance, you’ll come out ahead, but it’s easy to not feel that way in the moment.

By making some hard decisions about what to focus on and what to delete, you’ll free up huge amounts of productive time and energy to focus on what will really get you where you want to go.

That’s why I advise my clients to create a “not-to-do” list – by deciding in advance what’s not worth their time and energy, it becomes much easier to say no to low-value tasks and requests when they’re presented to you. Cessation is often a the best (and easiest) way to improve your performance.

#7: In business, focus on the products and customer that make you the most money, and minimize or eliminate the rest.

All people are created equal, but all customers are not. Some customers will feel like gifts sent from heaven – they’ll be excited, considerate, and will enthusiastically purchase everything you offer. Other customers will feel like they were sent from hell – they’ll buy what you’re selling, but they’ll never be happy, they’ll clog you will complaints, and they’ll demand special treatment or exceptions to your business practices.

Here’s the rule: discover who your best customers are, and focus on doing everything you can to give them the best experience and service possible. Also discover who your worst customers are, and fire them – they represent a huge Opportunity Cost in terms of time and effort. By politely inviting bad customers to not do business with you anymore, you free yourself to focus on customers who will actually help you meet your business goals. (Side note: if anyone asks you for a refund, don’t fight them – grant their request immediately, and be happy doing it. They are not your best customer.)

#8: In life, focus on the activities that produce the majority of life satisfaction.

The 80/20 Principle also extends to your life satisfaction – a few things will contribute the most to your overall happiness and inner peace. Those are the things that you should build your life around: for me, they’re spending time with family and friends, having deep conversations with people, sharing what I know with others, doing fun experiments, and reading everything that piques my interest. If I want to lead a happy life, that’s how I should spend most of my time.

A wide body of research indicates that daily experiences contribute far more to your overall happiness and life satisfaction than possessions do. That means you’re far better off investing in a trip around the world with friends than a huge house or luxury car.

On the flip side, you should ruthlessly eliminate things that don’t contribute to your happiness or life satisfaction. The classic example for most people is commuting: very few people love the feeling of sitting in a car or train for 1-3 hours every day. If you eliminate your commute by moving very close to where you work you both eliminate a source of dissatisfaction AND free up more time and energy to do things you find far more rewarding. That decision can be a net positive, even if it’s more expensive.

#9: A minority of decisions will produce the majority of your results: choice of work, debts, investments, relationships.

There are a few specific decisions it pays to take special care before making: what you do for a living, borrowing money, contractual commitments, and who you spend the most time with – particularly the transition from romantic partner to marriage or civil union.

Think of these decisions as inflection points – you’re making a commitment that’s very difficult (not impossible, but difficult) to reverse or change. They also effect how you will be spending your time and energy on a very fundamental level, such that they can drastically alter your income, priorities, and life satisfaction.

Accordingly, it pays to spend a disproportionate amount of time and energy making sure these decisions are made well, and you put yourself in the best position you can in the process. For example, purchasing a home is one of the biggest financial decisions people make, so if you want to buy a house, don’t do it quickly or lightly. Do your research, understand the complete financial picture, create a masterful budget, improve your credit, and negotiate hard with the bank if you’re taking on debt. What can look like small improvements can end up producing huge results: negotiating 1% off of your interest rate can save you hundreds of thousands of dollars on a 30-year mortgage, so it pays to push as hard as you can.

#10: More effort does not equal more reward – focus only on what is crucial, and ignore the rest.

Here’s the ultimate lesson, and it’s an important one: YOU ARE NOT REWARDED FOR EFFORT. People ultimately doesn’t care how long you spend doing something – it cares far more about how important and meaningful your work is.

You can spend 50 years digging a pit in the Sahara desert, and no one will care a bit. Spend those 50 years doing something like curing cancer, and EVERYONE will care.

Whatever you decide to do, spend some time at the beginning Deconstructing the goal – what appears to be critically important to master, and what appears to be a waste of time?

You’ll certainly have an incomplete list until you actually get started and start learning as you go, but establishing your “focus-on” and “Not-To-Do” lists from the outset can save you huge amounts of time and effort in the long run.

This summary was created by Josh Kaufman, an independent business teacher and author of The Personal MBA: Master the Art of Business. To receive Josh’s notes on the best business books available and other Personal MBA blog updates, be sure to sign up for the Personal MBA newsletter – it’s absolutely free.




11/18/11--23:42: End Malaria - Creating a Personal Masterplan (chan 1852493)

End Malaria: Creating a Personal Masterplan

I’m proud to join a group of 62 authors in publishing End Malaria – the first business book that literally saves lives.

End Malaria is available from Amazon.com, and costs $25. Your purchase sends a $20 mosquito net to a family in need and supports life-saving work in the fight against malaria.

In the printed version of End Malaria, you can find my contribution on page 127, in between contributions by Dave Ramsey and David Allen. The book features contributions from Kevin Kelly, Pam Slim, Sir Ken Robinson, Derek Sivers, Barry Schwartz, Jonah Lehrer, Gary Vaynerchuk, Tom Peters, Seth Godin, Chris Guillebeau, Jonathan Fields, Dan Pink, among others. I read the entire book last night, and it’s a very solid collection.

For End Malaria, I contributed the latest version of my “Personal Masterplanning” technique. This simple goal-setting and prioritization technique will help you discover what you actually want, and what’s most important, in record time.

If you enjoy my contribution, you’ll enjoy End Malaria. Be sure to buy a copy today – and save a life in the process.

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Creating a Personal Masterplan

Want to experience immediate clarity about your life and work? Want to ensure you’re prioritizing the projects that will lead to the results you desire most?

Create a personal masterplan.

Step #1: The Mind Dump

Here’s what to do first: grab a pen and five sheets of paper. At the top of the first page, boldly scribble “Here’s What I Want…”

Go nuts. List all of your big dreams, major projects, and minor preferences. Anything you want is fair game – what other people want you to want doesn’t really matter. Try to self-censor as little as possible – things that other people wouldn’t find socially acceptable are okay too. (You can always burn the list later if you’re
worried someone will read it.)

Dump the contents of your mind onto paper as completely as possible. You’ll know you’re done when you can’t think of anything else you might possibly want.

Step #2: Sorting

Here’s the second step: we’re going to sort the list you created into three separate lists to add a bit of clarity about what each item actually is. Here are the categories:

1. Goals – statements of achievement. Well-formed goals pass what I call the “Everest Test” – if you want to climb Mt. Everest, you know precisely when you’ve accomplished your goal. The best goals are positive, immediate, concrete, and specific. They’re also things that you have the power to accomplish if you invest enough time and effort.

2. States of Being – qualities of your present experience. “I want to be happy” is not a goal, since you can feel happy in one moment and miserable in the next. States of Being are actually decision criteria, not goals. If you “want to feel free,” and you’re not feeling free in a given moment, you know you need to change something.

3. Habits – daily supporting behaviors that keep you healthy, calm, and sane. Habits take some willpower to install, but the results accumulate over time. Brushing your teeth is a habit. So is going for a walk every day after dinner.

Step #3: Prioritizing

Once you’ve separated your list into these three lists, you’re ready for the third stage: prioritizing.

Most people think of prioritization as “deciding what’s most important.” The trouble with that definition is that it easily leads to overwhelm – way too many things feel important at once. (If it wasn’t important, it wouldn’t be on your list.)

That why it’s easy to feel overworked and stressed out: unless you make a conscious choice, your mind will continue to want everything, all at once.

Prioritization is actually the process of deciding what’s not important: what you’re not going to focus on right now. If you delete, delegate, or defer your less important wants, you free up time and energy for the reminder, which is more important by definition.

Start with your Goals list, and apply a simple rule: assume you can only accomplish 50% of the items on this list this year. Which items do you keep, and which do you cross off your list? Cut your list in half.

When you’re done cutting, cut the list in half again, then again, until you have four items left. Those are your most important goals right now.

When you’ve finished pruning your Goals, do the same for your States of Being and Habits list. Yes, the last few cuts are the most difficult, but they’re also the most valuable.

Cutting something from your list doesn’t mean you’re giving up on it completely – it simply means it’s less important than other items right now. Everything you cut can go on what David Allen calls a “Someday/Maybe” list that you can revisit later, when you’re ready for a new challenge.

Using Your Masterplan

Creating a masterplan takes at least an hour, but it’ll be one of the most productive hours you spend this year. Here’s why: having a masterplan makes it very easy to determine your most important tasks each day.

At the beginning of each day, review your masterplan. Figure out the very next thing you can do to achieve each of your goals. Those tasks will, by definition, lead most directly to what you want, so do them first.

Remind yourself of how you want to experience your daily life. Schedule time for the habits that support you.

It’s amazing how much a simple list can help you feel grounded, focused, and motivated each day. To your success!

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If you enjoyed this post, purchase a copy of End Malaria now. You’ll learn a ton, and save a life in the process.




11/18/11--23:42: Myths and Misunderstandings about the Personal MBA (chan 1852493)

Myths and Misunderstandings about the Personal MBA



In this post, I’m going to clear up some of the myths and misunderstandings about the Personal MBA and traditional business schools to help you get the most out of the your business self-education experience.

Myth-Understanding #1: You Have to Read All of the Books

Most people believe that you must read every book on the Personal MBA Recommended Reading List in order to benefit. Not true!

While reading every book on the Personal MBA Recommended Reading List is a laudable goal, and you’ll certainly benefit from doing so, I believe it’s more important to identify a few books you believe will help you most, and focus on reading those first.

Consider applying the Pareto Principle, or “80/20” Rule, to the Personal MBA. 80% of the information you’ll find personally useful to your present situation will be found in approximately 20% of the books.

Instead of overwhelming yourself from the outset with a “to-read” list 99 items long, pick one book from the Personal MBA reading list and commit to reading it by the end of the week. You’ll be amazed at how much you learn, and you can then quickly move on to the next book you find interesting.

Another approach to working through the Personal MBA I highly recommend is called synoptic reading. Choose a single category on the list and commit to reading all of the books in that category in a short period of time. By the end, you’ll easily be in the top 10% of the human population when it comes to that category of knowledge, and you’ll have a very good understanding of the most important concepts and how they relate to what you want to accomplish.

What can you start reading right now?

Myth-Understanding #2: You Can Learn Everything You Need to Know from a Book

It’s very tempting to assume that you can learn everything you need to know about business from reading books. Let me set the record straight right now: you can’t.

No matter how many books you read about entrepreneurship, you won’t really learn how to start a business until you actually start building one.

You won’t really learn how to write a business plan until you start writing one.

You won’t really learn how to manage people until you take on a few direct reports, and even then, it’s a constant learning experience.

Today’s lesson is simple: keep the books in their proper place, as a means of learning critically important skills and concepts that others have discovered through hard-won personal experience. Learn all you can from books, then use it to do something in the real world.

Your learning projects don’t have to be large. Start a small side business on the internet. Volunteer to help a friend or acquaintance write a business plan or conduct an analysis. Hire a
part-time virtual assistant as your first direct report and practice your management skills on them. The options are endless, so generate a few ideas, then test them to learn what works and what doesn’t.

When you combine reading with doing, you’ll be amazed at how quickly you learn.

Myth-Understanding #3: By Skipping the Classroom, You’ll Miss Critical Networking Opportunities

One of the comments I hear most often from critics of the Personal MBA approach to business education is the absence of traditional b-school networking opportunities. “Isn’t,” they argue, “the network the most valuable part of a traditional MBA program?”

Sure, having a large and diverse business network is extremely valuable. I simply question the necessity of spending six figures to build one.

Here’s the critical question: what is the best way to go about building a useful network?

Answer: make it a major priority (in both time and effort) to contact people you don’t currently know and spend time cultivating a real relationship with them.

The best networks are personally cultivated, not manufactured. If you take an active interest in meeting other business professionals, learning what they do, and connecting them with others, you can build a professional network by yourself in a very short period of time, sans the expensive sheepskin.

Pick up the phone; volunteer for a community organization; join Toastmasters or a local Meetup group; go to a conference about a topic that piques your interest. If you make it a priority to meet people and take a genuine interest in what they do, you’ll be amazed at the quality of the network you build.

You can even establish relationships with high-profile individuals, including CEOs of Fortune 50 Corporations, with the right strategy and enough persistence. (For more details, check out p161 in Tim Ferriss’ The Four-Hour Workweek.)

I have built a network of thousands of business professionals from all over the world, including the senior management of hundreds of companies, via working on the Personal MBA in my spare time. It’s been immensely fun and rewarding, and it’s a great example of how far a little personal effort can take you.

What can you do right now to start meeting other business professionals? It’s easier than you think.

Myth-Understanding #4: Books Are Expensive

If you buy the entire Personal MBA Recommended Reading List from Amazon.com, you’ll spend about $1,400. To some, that seems like a lot of money. In reality, it’s one of the best investments you’ll ever make.

Tom Peters once remarked:

“If I read a book that cost me $20 and I get one good idea, I’ve gotten one of the greatest bargains of all time.”

Benjamin Franklin wrote:

“If a man empties his purse into his head, no man can take it away from him. An investment in knowledge always pays the best interest.”

Ever since I created the Personal MBA, I’ve heard countless stories of people receiving a raise or promotion, starting a new business, improving their existing business, or expanding their areas of interest as a direct result of what they learned through the Personal MBA. Personally, I credit my ability to get (and quit) a job at a Fortune 50 to what I’ve learned through this program.

Purchasing and reading these books is not an expense – it’s an investment that will pay you back a thousandfold over the course of your career.

If cost is an issue, you can certainly borrow any of the books on the Personal MBA Recommended Reading List from your local library, but I highly recommend purchasing the books if you can. I have referenced my Personal MBA library thousands of times for ideas and information related to project I’ve worked on, and having my entire library immediately accessible has been a godsend. Nothing puts a hold on your projects more quickly than having to wait a week for a critical book to become available at the local library.

If you want to get the most out of your Personal MBA experience, you owe it to yourself to start building a personal reference library – the return on your investment is simply staggering.

Myth-Understanding #5: You Can Do It By Yourself

The Personal MBA is a “Do-It-Yourself” approach to business education, but “Do-It-Yourself” does not mean “Do-It-By-Yourself”.

Fact: your brain responds very differently to external stimuli than it does to your internal thought processes. That’s why it’s useful to talk with a friend when you have a difficult choice or problem, and why you get a better workout when you work with a trainer at the gym. Your frontal lobe can only do so much to spur you into action.

If you want to get the most out of your time and energy, working with others pays massive dividends. I credit the quality of the Personal MBA Recommended Reading List to the hundreds of people I’ve discussed it with over the years.

For best results, I highly recommend that you work on the Personal MBA with a small group of other people. Establish a group of friends and colleagues to discuss what you’re reading and learning on a regular basis. Share your experiences and knowledge with others on a blog and converse with people who leave comments. Become a member of the Personal MBA Community and strike up a few conversations.

No matter how you choose to work your way through the Personal MBA, don’t go it alone. You’ll learn more, retain more, and have more fun if you share the experience with other people.

Have any other questions about the Personal MBA? Feel free to contact me…

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Josh Kaufman is an independent business professor and author of the upcoming book The Personal MBA: A World-Class Business Education in a Single Volume. You can find more of his work at personalmba.com, and you can take his 12-week “Business Crash Course” at crashcourse.personalmba.com.

(Photo credit: omster-com on sxc.hu)




11/18/11--23:42: Driven - Paul R. Lawrence and Nitin Nohria (chan 1852493)

Book Notes: “Driven: How Human Nature Shapes Our Choices” by Paul R. Lawrence and Nitin Nohria

By Josh Kaufman



This post contains my personal notes about the big ideas in Driven: How Human Nature Shapes Our Choices by Paul R. Lawrence and Nitin Nohria. My book notes are different from many of the book summaries you’ll find on the web. Instead of following the structure of the book in question, we’ll isolate and examine the key ideas and themes that make the book useful. Enjoy!

There are four core human drives that shape how people think and behave. Understanding these core drives helps us understand what people want, as well as find ways to help others fulfill them – the central function of business. The more drives your offer appeals to, the more appealing it will be to your potential customers.

About Paul R. Lawrence and Nitin Nohria

Paul R. Lawrence is the Wallace Brett Donham Professor of Organizational Behavior, Emeritus at Harvard Business School. Nitin Nohria is now the dean of Harvard Business School.

Here are 10 big ideas from Driven: How Human Nature Shapes Our Choices…

1. Human beings have four fundamental, biological drives: acquiring, bonding, learning, defending.

We’re in the business of helping our customers. Our customers are human beings, with wants, desires, and needs of their own. If you want to succeed in business, you must have a clear idea of what people want and need – what they’re driven to seek for themselves.

Lawrence and Nohria’s four drive theory helps to explain what humans want, as well as why they want those things. On the whole, humans love to:

• Acquire – both material goods, as well as immaterial things like status, power, and influence.
• Bond – form relationships and interact with other people.
• Learn – explore new areas of life, practice new skills, and satisfy curiosity.
• Defend – protect what is “ours,” and drive away threats to our safety and security.

2. If you want to succeed in business, it pays to understand what people want. Markets form around core human drives.

The four drive theory can serve as a starting point for discovering what people want enough to pay for. Whenever a person believes (either consciously or subconsciously) they don’t have “enough” of one of these core drives, they’ll do what they can to get more.

Understanding these drives helps you understand human behavior. As we discussed in Making Sense of Behavior, humans act when a perception is outside of a certain range. These drives help explain what people are actually controlling for on a high level.

When enough people feel a need in one of these areas, a market forms – a group of people who are willing to try something new and potentially pay for a solution.

Here’s an exercise for you: go through the list of current Fortune 500 companies – the largest businesses in the world. All of them meet a need related to one (or more) of these four drives. Wal-Mart and Target are acquiring businesses. Boeing and Raytheon are defending businesses, etc.

3. Drives are subconscious: all people want them at some level almost all of the time.

The four drives are universal – they transcend age, status, and culture. The drives describe the human experience, and we all want all of them all of the time. As a result, these drives are useful when examining how people are currently behaving, as well as predicting how they’re likely to behave in the future.

4. Drives are emotional, and serve to provide context to rationality: goals, intentions, purpose, and motive.

When it comes to making good decisions, emotions are essential. It’s common to think of rationality as being Spock-like – unemotional and coldly logical. That’s not an accurate picture of the role of emotion in decision-making.

Emotions are an important part of rationality. The universal drives are felt at an emotional level, and help us use our minds to get what we want. These built-in control systems help ensure that our minds are focused on high-priority issues: matters that will improve our odds of biological and reproductive success vs. more trivial matters.

5. Drives evolved to help us survive and thrive in our ancestral environment.

It’s important to understand that these drives help us stay alive and in the good graces of other people. Without them, we’d make decisions that wouldn’t serve us biologically. We’d do things that jeopardized our survival, threatened our place in society, and reduced our chances of finding a suitable mate.

Any particular individual may have a greater or lesser developed need for one of these drives, but the drive is always there on some level. A “minimalist” may seek to reduce the number of items they acquire, but they still must acquire enough to live.

6. The Drive to Acquire: material goods and immaterial status, influence, and power.

Humans have the need to acquire things. Some of these items are necessary for survival, like food and shelter. Some of these items are more directly tied to social status – things that influence how other people perceive us, like luxury items, large homes, and expensive cars.

Businesses that cater to the drive to acquire include retail stores, vehicle manufacturers, and groceries.

7. The Drive to Bond: forming social relationships, communicating, and the feeling of belonging.

Humans have the need to bond with other people. We need to feel connected to others – so much so that prolonged solitary confinement is torture. Businesses that cater to the drive to bond include telecommunications, conferences, restaurants, and dating services.

Consider websites like Twitter and Facebook: they primarily fill a bonding need, with a subtext of acquiring new “friends” or “followers.” A major part of the rapid adoption of these tools came from a felt need – that it was difficult to keep in touch with far-flung friends and associates, and using these services help people feel less alone.

8. The Drive to Learn: curiosity, exploration, questioning, and pushing boundaries.

Humans have the need to learn new things. Curiosity is a part of the human condition, and without consistently learning and trying new things, people quickly become restless and bored.

Businesses that cater to the drive to learn include publishers, seminars, and self-improvement offerings.

9. The Drive to Defend: identifying threats, protecting self and others, and seeking safety.

Humans have the need to defend themselves and their domains. Whenever we feel threatened in some way – physically or socially – we spring into defensive mode. We start to think of ways that we can defend ourselves, our property, and our clan against danger.

Defending also applies to the specter of potential loss – losses that haven’t happened yet, but might happen in the future. For example, the survivalist community has been preparing for “The End of the World as We Know It” for decades, even though major losses haven’t happened. (But they might – in the mind of a “prepper,” better safe than sorry.)

Businesses that cater to the drive to defend include martial arts studios, weapon manufacturers, and home security systems.

10. Multiple drives can be active at the same time: the more drives an action invokes, the more compelling that action becomes.

Drives combine multiplicatively – the more drives an opportunity or action engages, the more intensely we’ll feel motivated to act.

Consider social games like World of Warcraft. The game has been specifically engineered to appeal to all four core drives. The major progression element of the game is tied to getting better gear, and better gear leads to higher social status – acquisition. The only way to advance to the highest levels is to join and advance in a guild – bonding. Doing these things requires exploring new dungeons and constantly developing tactics to defeat the enemy – learning. Failing to do these things results in the death of your character and possible eviction from your guild – defending.

Is it any wonder World of Warcraft is such an addicting game? The more drives your offer appeals to, the more compelling your offer becomes.

BONUS: The Drive to Feel: emotion, boredom, and sensory stimulation.

I believe Lawrence and Nohria missed (or left out) a major drive: the drive to feel. Human beings have the need to be emotionally engaged on a daily basis – too little sensory stimulation (beyond that of curiosity or bonding) creates a drive to seek it.

Consider going to the movies. You’re not acquiring anything. Any bonding that happens with others happens before or after the movie. You very rarely learn something new. Seeing the movie doesn’t remove any threat.

The major effect of a good movie is to provoke your emotions – to guide you to feel something. The movies that get the best reviews, and do the best in the box office, are the movies that provoke our emotions the most.

Never underestimate the power of appealing to your customers on an emotional level.

This summary was created by Josh Kaufman, an independent business teacher and author of The Personal MBA: Master the Art of Business. To receive Josh’s notes on the best business books available and other Personal MBA blog updates, be sure to sign up for the Personal MBA newsletter – it’s absolutely free.




11/18/11--23:42: Read This Before Our Next Meeting - Al Pittampalli (chan 1852493)

Read This Before Our Next Meeting – Al Pittampalli

Every once in a while, I invite cool people who have written books to share their knowledge with Personal MBA readers. Al Pittampalli is on a quest to save the world from horribly-organized, productivity-draining, soul-destroying meetings. I think you’ll enjoy his personal notes on the key ideas in Read This Before Our Next Meeting. – Josh

About Al Pittampalli and Read This Before Our Next Meeting



Al Pittampalli is a speaker, author, and meeting “culture warrior.” As a former IT advisor at Ernst & Young LLP, Al worked on-site at Fortune 1000 companies all across the country. He sat in a lot of meetings… and he’s still recovering.

Al is embarking an a revolution dedicated to eradicating the traditional meeting, and replacing it with what he calls the “Modern Meeting.” The goal is to save people time, effort, and precious sanity.

Here are ten big ideas from Al Pittampalli’s Read This Before Our Next Meeting:

 
 
 
 

1. Meetings are broken beyond repair. We can’t fix them, we have to reinvent them.

An overabundance of ineffective and wasteful meetings is plaguing organizations and frustrating individuals everywhere. For years, the meeting efficiency movement has tried desperately to make meetings better.

It hasn’t worked, at all. Desperate times call for desperate measures.

Every organization must destroy the traditional meeting, and starting from scratch fundamentally redefine it. We’ll call this reinvention the Modern Meeting.

2. Traditional meetings create a culture of compromise.

Meetings are structured in a way that kill action and enable us to pass of responsibility too easily. The committee mentality ensures that instead of one individual being responsible and accountable for making a decision, the bystander effect takes over and a diffusion of responsibility occurs.

Even slightly innovative ideas require someone willing to step up and champion them, but traditional meetings’ obsession with consensus ensures these ideas almost never move forward. This results in safe, boring, compromised decisions (or none at all).

3. Traditional meetings kill our sense of urgency.

As Peter Drucker said, one can either meet or work: you can’t do both at the same time. When we spend too much time inside of meetings, progress slows and truly great work never occurs.

This phenomenon is fueled by one simple truth: meetings are often useful for the leader, but not for the participants. And because anyone can call a meeting, everyone does. This creates an environment of constant interruption.

In addition, false urgent meetings kill employees sense of speed and trust. When we find out a meeting that was supposed to be “critical” wasn’t, it’s hard not to think, “Why bother?”

4. At the heart of meeting excess is a decision problem.

Individuals inside organizations are terrified of making decisions, so they call meetings instead. Those meetings turn into more meetings and the cycle is often never ending. It’s the perfect crime, the decision maker gets to delay in a way that appears productive.

Of course sometimes holding a meeting is a strategic decision, but most of the time it’s an emotional one, spurred by fear. Meetings have become the default stalling tactic for tough decisions.

5. A Modern Meeting exists for one reason: to support a decision that has already been made.

Unlike traditional meetings that stifle decision making, the Modern Meeting is structured so the bias is towards action.

When you have a decision to make, you must make the decision first, before you can call a meeting. You can get input from others individually if you want through one-on-one conversations, but until you make your decision, a meeting can’t be called.

Once a decision is made, you can call a meeting to support that decision. There are two ways meetings support decisions, through conflict or coordination.

6. There are only two activities for which a Modern Meeting is worth convening, conflict or coordination.

1. Conflict

Once a preliminary decision is made by an individual, it might be useful to allow a debate of conflicting opinions. After all, moderate levels of conflict by groups can lead to more intelligent decisions.

The debate might enable the decision maker to change his decision or simply alter some of the aspects of that decision.

2. Coordination

Once the decision is resolved, sometimes the scenarios are tricky and the steps are vague. It’s worth getting smart people in a room to engage in the type of collaborative problem solving necessary to support a plan or launch a product.

7. Death to the informational meeting!

To keep the Modern Meeting powerful, we have to cancel the meetings that don’t directly support decisions. The most frequent offender: meetings whose sole purpose is to disseminate information.

The cost of holding a meeting is extraordinary. There are so many better and cheaper alternatives (e-mail, recorded audio, recorded video) that allow people to consume information on their own time.

Here’s the key: important information still needs to get reliably communicated throughout the organization. So we can only realistically cancel all informational meetings if we institute a sacred pact.

Everyone must read the memos, without fail. If even a few people fail to read, it jeopardizes the system of trust, and the entire system crumbles.

8. The Modern Meeting moves fast and ends on schedule.

Deadlines are procrastination’s worst enemy. Since the modern meeting optimizes for the decision, and we realize pressure leads to resolution, we keep meetings fast and ruthlessly on time.

Hard stops make it necessary for groups to come together and prevent decisions from being stalled. In fact, too much time often leads to more anxiety, more doubt, and then even the most unshakable decision can fall apart.

9. Brainstorming is not a meeting. It’s the anti-meeting.

Unfortunately, we’ve lumped brainstorming into the “meeting” category. It’s not, it’s the opposite. Modern Meetings are focused on decision, the narrowing of options.

In order to maintain a healthy ecosystem for ideas, we must be sure to balance this with sessions dedicated to the creation of possibilities. Luckily, brainstorming magically results in the mass generation of options.

Brainstorming should look extremely different from ordinary meetings. No criticism or evaluation should be present. Get passionate people in the room and intimidating ones out. Make it fun, make it active, and make it as creative as possible.

10. The quality of your meetings is the quality of your organization.

Meetings were created to provide needed coordination in your organization. We need meetings to ensure intelligent decisions are made and to make sure teams are interacting effectively on projects.

The promise of organization is that many people working together can produce much more than the sum of those people working individually. It’s the intersections between teams, departments, and business units that make this possible.

We have to reinvent the meeting in a way that is worthy of the work we do every day. Let’s reinvent.

About Read This Before Our Next Meeting by Al Pittampalli

Meetings are broken. Read This Before Our Next Meeting is a manifesto written in response to an antiquated meetings system. The solution is the “Modern Meeting Standard”: 7 simple principles that change the way an organization makes decisions and coordinates action.

Give this book to your colleagues who organize horrible meetings, and change the world for the better.

Useful tip: thanks to a generous sponsorship from Citrix, the Kindle version of Read This Before Our Next Meeting is available FREE for download from August 3rd – 9th. Download your copy now.




11/18/11--23:42: What Must an Educated Person Know? (chan 1852493)

What Must an Educated Person Know?

“If you don’t have time to do it right, when will you have time to do it over?” – John Wooden, basketball coach

John Taylor Gatto, a renowned education historian and critic of modern industrial schooling, wrote an essay titled The Curriculum of Necessity or What Must an Educated Person Know? Here’s how the essay begins:

A few years back one of the schools at Harvard, perhaps the School of Government, issued some advice to its students on planning a career in the new international economy it believed was arriving. It warned sharply that academic classes and professional credentials would count for less and less when measured against real world training. Ten qualities were offered as essential to successfully adapting to the rapidly changing world of work. See how many of those you think are regularly taught in the schools of your city or state…

Here’s Harvard University’s list of skills that make an “educated person”:

1. The ability to define problems without a guide.
2. The ability to ask hard questions which challenge prevailing assumptions.
3. The ability to quickly assimilate needed data from masses of irrelevant information.
4. The ability to work in teams without guidance.
5. The ability to work absolutely alone.
6. The ability to persuade others that your course is the right one.
7. The ability to conceptualize and reorganize information into new patterns.
8. The ability to discuss ideas with an eye toward application.
9. The ability to think inductively, deductively and dialectically.
10. The ability to attack problems heuristically.

After listing these skills, Gatto continued:

You might be able to come up with a better list than Harvard did without surrendering any of these fundamental ideas, and yet from where I sit, and I sat around schools for nearly 30 years, I don’t think we teach any of these things as a matter of school policy… None of the schools I ever worked for were able to provide any important parts of this vital curriculum for children. All the schools I worked for taught nonsense up front. And under the table, they taught young people how to be dumb, how to be slavish, how to be frightened, and how to be dependent.

I found Harvard’s list fascinating. A while back, I drafted a list of this type my own post Do You Have These Core Human Skills?

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Here’s my own list of “Core Human Skills”:

1. Information-Assimilation – how to find, consume, and comprehend information and identify what’s most important in the face of a problem or challenge.
2. Writing – how to communicate thoughts and ideas in written form clearly and concisely.
3. Speaking – how to communicate thoughts and ideas to others clearly, concisely, and with confidence.
4. Mathematics – how to accurately use concepts from arithmetic, algebra, geometry, calculus, and statistics to analyze and solve common problems.
5. Decision-Making – how to identify critical issues, prioritize, focus energy/effort, recognize fallacies, avoid common errors, and handle ambiguity.
6. Rapport – how to interact with other people in a way that encourages them to like, trust, and respect you.
7. Conflict-Resolution – how to anticipate potential sources of conflict and resolve disagreements when they occur.
8. Scenario-Generation – how to create, clarify, evaluate, and communicate a possible future scenario that assists in decision-making, either for yourself or another person.
9. Planning – how to identify the necessary next steps to achieve an objective, account for dependencies, and prepare for the unknown and inevitable change via the use of contingencies.
10. Self-Awareness – how to accurately perceive and influence your own internal states and emotions, including effective management of limited energy, willpower, and focus.
11. Interrelation – how to recognize, understand, and make use of key features of systems and relationships, including cause-and-effect, second and third-order effects, constraints, and feedback loops.
12. Skill Acquisition – how to go about learning a desired skill in a way that results in competence by finding and utilizing available resources, deconstructing complex processes, and actively experimenting with potential approaches.

A bit of research led me search for other lists of “what an educated person must know.” Oliver Demille’s A Thomas Jefferson Education included Harvard’s list, in addition to two others.

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Here’s Princeton University’s list of skills that make an “educated person”:

1. The ability to think, speak, and write clearly.
2. The ability to reason critically and systematically.
3. The ability to conceptualize and solve problems.
4. The ability to think independently.
5. The ability to take initiative and work independently.
6. The ability to work in cooperation with others and learn collaboratively.
7. The ability to judge what it means to understand something thoroughly.
8. The ability to distinguish the important from the trivial, the enduring from the ephemeral.
9. Familiarity with the different modes of thought (including quantitative, historical, scientific, and aesthetic.)
10. Depth of knowledge in a particular field.
11. The ability to see connections among disciplines, ideas and cultures.
12. The ability to pursue life long learning.

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Here’s George Wyth College’s list of skills that make an “educated person”:

1. The ability to understand human nature and lead accordingly.
2. The ability to identify needed personal traits and turn them into habits.
3. The ability to establish, maintain, and improve lasting relationships.
4. The ability to keep one’s life in proper balance.
5. The ability to discern truth and error regardless of the source or the delivery.
6. The ability to discern true from right.
7. The ability and discipline to do right.
8. The ability and discipline to constantly improve.

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There are four major lessons to learn from these lists:

1. There’s a remarkably strong consensus from independent sources (inside and outside academia) about what it means to be an “educated” person. An “educated” person is one equipped to deal with most common life situations. Skills related to these areas are the skills that will be most useful throughout the course of life.
2. “Education” is an ongoing process that is not synonymous with credentialing: credentialing programs almost universally skip teaching these “fuzzy” skills in favor of other skills that can be assessed more easily. “Education” does not end when schooling ends. The true test of these skills is how an individual responds in situations that call for them.
3. Existing schooling / credentialing processes have little to no overlap with these major areas, and may actually be counterproductive, either by over-complicating the theory related to these skills or consuming time/attention in teaching areas unrelated to these skills. Current trends in credentialing are leading to less overlap in these areas over time, not more.
4. If you intend to improve in each of these areas, you must invest time, energy, and resources learning these skills on your own. Investment in learning skills related to these areas is most likely to pay dividends in real-world situations, either in money or overall life satisfaction.

What are you practicing right now? What skills are you actively developing? Are these efforts contributing to your development as an “educated” person, or are they interfering?




11/18/11--23:42: The 48 Laws of Power - Robert Greene (chan 1852493)

The 48 Laws of Power – Robert Greene



The use – and abuse – of power is a critically important part of the human experience. If you don’t understand how to accumulate and wield power responsibly, you’ll forever be at the mercy of other people’s plans for you. The 48 Laws of Power is part history, part primer: it tells the stories of leaders past and present who have accumulated, wielded, and been affected by power – to their benefit and often their detriment.

I’ll be frank: The 48 Laws of Power is a disconcerting read – that’s the point. Greene’s treatment of power is completely amoral: it treats the accumulation and use of power as an end in and of itself, making no judgements on good and evil. The book assumes you’re interested in increasing your control and influence by any means necessary, and like a modern Machiavelli, shows you how to go about doing just that.

While some of the historical examples aren’t immediately applicable (please don’t behead your enemies), it’s not difficult to see echos of these “laws” in modern business life. Forewarned is forearmed – knowing these principles makes it much easier to defend against those that would use them against you.

By the time you finish The 48 Laws of Power, you’ll be far less naive when it comes to the uses and abuses of power, and far better prepared to handle the power plays you’ll experience in your career – time very well spent.




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Discuss 48 Laws of Power on the Personal MBA Forums




11/18/11--23:42: Time is Never "Found" for ANYTHING (chan 1852493)

Time is Never “Found” for ANYTHING

06 May 2010



I’ve been going through the feedback I’m receiving on the re-launch of the Personal MBA Business Crash Course, and there’s a recurring theme I’m hearing from quite a few people who are choosing not to enroll:

“Looks great, but I don’t have enough time…”
“I’m too busy – I’ll do it when I find the time…”

I hear the same thing about reading the books on the Personal MBA’s list of the best business books – it’s a fantastic education, if you can “find the time.”

“Finding time” is a myth. Here’s the truth: no one ever “finds” time for ANYTHING, in the sense of miraculously discovering some bank of extra time, like finding a $20 bill you accidentally left in your coat pocket. If you rely on “finding” time to do anything, it’ll simply never be done – guaranteed. If you want to “find” time, you must MAKE time.

Once I figured that out, my life became a heck of a lot easier, more productive, and more fun.

The Meritocracy of Time

Use of time is an absolute meritocracy: each of us has 24 hours (~16 assuming 8 hours of sleep), and it always fills up very quickly, whether you’re an executive, doctor, blogger, or trash collector. No one has any more time than anyone else – we all have precisely the same amount, and have the same opportunity to use it well or waste it.

Deciding how to use your time is typically referred to as “prioritization.” Most popular prioritization methods attempt to structure your time by trying to decide what’s most important, then rank-ordering your to-do list in terms of most-to-least important. (The popular ABC method popularized by Stephen Covey fits this model.) While it makes intuitive sense to rank projects in this way, you rarely gain much clarity about what to do next – after all, even “C” priorities still need to be done, right?

Everything is NOT Important

In one of my first jobs out of college, my workload consisted of 6 complex, high-profile projects – more than enough work for two people working full-time. When I asked my manager which projects were more important so I could prioritize appropriately, I received a response I’m sure you’ve heard at some point in your life as well: “everything is important – make it happen.” The only thing that could be done was to wade through the daily craziness as best as possible, since I wasn’t free to choose what NOT to do – a major contributing factor of why I left that job as soon as I could. By trying to do everything at once, I ended up getting much less done and experienced significantly more stress.

Using time well means consciously deciding what NOT to do. In my upcoming book, one of the personal productivity concepts I discuss is the “4 Methods of Completion.” There are really only four ways to “complete” a task or project: (1) you can do / act to complete it, you can (2) delegate it to someone else, you can (3) defer it to a later date, or you can (4) delete it – consciously decide NOT to do it. When it comes to prioritization, deleting is by far the most important.

In order to focus on doing what’s most important, you must consciously choose not to do things that are less important to free up time for your priorities. I’ve spent the past several months working on the book, and you’ve probably noticed that my frequency of posting on this blog went down rather dramatically. That was a conscious decision: I could either spend most of my productive writing time working on the book, or creating new posts for the blog.

The best way to “find time” to write the book turned out to be choosing NOT to do something else – write new blog posts. Instead of feeling bad I couldn’t do both, I make a conscious choice that finishing the book was most important, then consciously deleted, delegated or deferred everything in my life that interfered with that goal. That’s the essence of effective prioritization.

3 Ways to MAKE Time Immediately

The best way to “find” time for an important project is to consciously delete less important competing projects, tasks, or time-sinks that interfere with getting it done. Here are three things you can do to “find time” immediately.

1. Get Rid of Your TV. Going cold turkey and canceling your cable or satellite service is the closest thing you’ll ever find to “discovering” more time – it’s amazing what you can accomplish when you’re educating yourself instead of passively absorbing useless content. If you have a few shows you like to watch, get them on DVD and watch them only when you need some time to decompress. (“The time you enjoy wasting is not wasted time.” – Bertrand Russell)

2. Refuse to go to unproductive meetings or obligations that have outlived their usefulness. One of my coaching clients recently landed a professorship and postdoc at a prestigious, well-known research university. Surprisingly, he found that his productivity went down significantly vs. what he was able to accomplish in his doctoral research program. The culprit was meetings: he was spending so much time going to meetings that he found it difficult to get actual work done. The solution was simple: he stopped going, and was prepared to accept the consequences. After he made this decision, he got so much useful research done that his advisor no longer expects him to waste time attending meetings that add little value. If you’re involved in groups or organizations that no longer serve you, simply stop going.

3. Cut your obligations to no more than three active projects at once. All of us must spend some time keeping ourselves healthy and maintaining relationships with family, friends, and colleagues in order to function optimally, which leaves only so much time for productive activities. In general, it’s best to limit your active projects to no more than three – any less, and you’ll decrease your impact, but any more, and you’ll spread yourself too thin. I’ve found three active projects to be the sweet spot between getting a lot accomplished while avoiding unproductive task switching and stress – you can focus your efforts on what will make the biggest difference in what you want to accomplish.

By MAKING time to achieve what’s most important in moving you toward what you want, you’ll be amazed at what you can accomplish.

What are you putting off because you “can’t find the time”? What can you choose to delete or delegate to free up time for your most important projects?

(Photo credit: iotdfi on sxc.hu.)




11/18/11--23:42: Schrödinger on Knowledge (chan 1852493)

Schrödinger on Knowledge

18 November 2010



Erwin Schrödinger, physicist and father of quantum mechanics:

We have inherited from our forefathers the keen longing for unified, all embracing knowledge… But the spread, both in width and depth, of the multifarious branches of knowledge during the last hundred odd years has confronted us with a queer dilemma. We feel clearly that we are only now beginning to acquire reliable material for welding together the sum total of all that is know into a whole: but, on the other hand, it has become next to impossible for a single mind fully to command more than a small specialized portion of it.

I see no other escape from this dilemma (lest our true aim be lost forever) than that some of us should venture to embark on a synthesis of facts and theories, albeit with second hand and incomplete knowledge of some of them – and at the risk of making fools of ourselves. So much for my apology.

The modern world emphasizes and rewards narrow specialization. Specialization is for insects – how much energy are you investing in understanding the bigger picture?




11/18/11--23:42: LAUNCH - The Personal MBA Book - Master the Art of Business (chan 1852493)

LAUNCH: The Personal MBA Book – Master the Art of Business

30 December 2010



I’m excited to announce that my new book, The Personal MBA: Master the Art of Business, is now available at a bookstore near you. The reviews are rolling in, and they’re fantastic. This is a book six years in the making – a comprehensive collection of the most important and practical ideas in business.

You should be able to purchase this book for less than $25 USD at most major bookstores – you won’t find a better ROI anywhere. I hope you enjoy the book!

I’m also excited to announce the birth of my daughter, Lela Christine. Lela was born 10 days ago, so I’m the proud papa of two lovely launches today.

If you’ve already purchased a copy of The Personal MBA, thank you – please spread the word, and leave a review if you’re so inclined.

If you haven’t yet purchased a copy for some reason, now is a great time to do so. Books are a great way to launch new ideas into the mainstream, and the media uses bestselling books as a gage when deciding what to talk about. If you’ve ever wished more people would recognize the value of self-education, here’s your chance – purchasing this book is a way of voting with your dollars. We all benefit from spreading this message far and wide.



The Personal MBA: Full Table of Contents

It’s not uncommon for authors to post the table of contents of their book, so readers can get an idea of what’s inside. I’m going to go one step further: here’s the complete table of contents INCLUDING a video summary of each concept. Each link leads to a video, where you can quickly learn about each key idea in the book.

Since I’m known for my book summaries, I figured the best way to launch this book would be to summarize it for you. Enjoy, and thanks for your support!

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Chapter 2: Value Creation

• Value-Creation
• The 5 Parts of Every Business
• Economically Valuable Skills
• The Iron Law of the Market
• Core Human Drives
• 10 Ways to Evaluate a Market
• The Hidden Benefit of Competition
• The Mercenary Rule
• The Crusader Rule
• The 12 Standard Forms of Value
• Form of Value #1 – Product
• Form of Value #2 – Service
• Form of Value #3 – Shared Resource
• Form of Value #4 – Subscription / Continuity
• Form of Value #5 – Resale
• Form of Value #6 – Lease
• Form of Value #7 – Agency
• Form of Value #8 – Audience Aggregation
• Form of Value #9 – Loan
• Form of Value #10 – Option
• Form of Value #11 – Insurance
• Form of Value #12 – Capital
• Perceived Value
• Modularity
• Bundling / Unbundling
• Prototype
• The Iteration Cycle
• Iteration Velocity
• Feedback
• Alternatives
• Economic Values
• Relative Importance Testing
• Critically Important Assumptions
• Shadow Testing
• Minimum Economically Viable Offer
• Incremental Augmentation
• Field Testing

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Chapter 3: Marketing

• Marketing
• Attention
• Receptivity
• Remarkability
• Probable Purchaser
• End Result
• Qualification
• Point of Market Entry
• Addressability
• Desire
• Visualization
• Framing
• Free
• Permission
• Hook
• Call-To-Action
• Narrative
• Controversy
• Reputation

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Chapter 4: Sales

• Sales
• Transaction
• Trust
• Common Ground
• Pricing Uncertainty Principle
• 4 Pricing Methods
• Value-Based Selling
• Education-Based Selling
• Next-Best Alternative
• 3 Universal Currencies
• 3 Dimensions of Negotiation
• Buffer
• Reciprocation
• Damaging Admission
• Objections & Barriers
• Risk-Reversal
• Reactivation

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Chapter 5: Value Delivery

• Value-Delivery
• Value Stream
• Distribution Channel
• Throughput
• The Expectation Effect
• Predictability
• Duplication
• Multiplication
• Scale
• Accumulation
• Amplification
• Barrier To Competition
• Force Multiplier
• Systemization

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Chapter 6: Finance

• Finance
• Profit
• Value Capture
• Sufficiency
• Target Monthly Revenue
• Core Revenue Growth
• Pricing Power
• Lifetime Value
• Allowable Acquisition Cost
• Overhead
• Costs: Fixed & Variable
• Breakeven
• Amortization
• Purchasing Power
• Cash Flow Cycle
• Opportunity Cost
• Time Value of Money
• Compounding
• Leverage
• Hierarchy of Funding
• Bootstrapping
• Return on Investment
• Incremental Degradation
• Sunk Cost

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Chapter 7: The Human Mind

• The Human Mind
• Caveman Syndrome
• The Gas Tank
• The Onion Brain
• Perceptual Control
• Reference Level
• Reorganization
• Conflict
• Pattern Matching
• Mental Simulation
• Interpretation
• Motivation
• Willpower Depletion
• Guiding Structure
• Loss Aversion
• Threat Lockdown
• Cognitive Scope Limitation
• Contrast
• Association
• Absence Blindness
• Scarcity
• Novelty

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Chapter 8: Working With Yourself

• Working With Yourself
• Four Methods of Completion
• Most Important Task
• Goal
• State of Being
• Priming
• Choice
• Five-Fold Why
• Five-Fold How
• Next Action
• Externalization
• Self-Elicitation
• Cognitive Switching Penalty
• Counterfactual Simulation
• Parkinson’s Law
• Doomsday Scenario
• Excessive Self-Regard Tendency
• Confirmation Bias
• Hindsight Bias
• Performance Load
• Recovery
• Dash
• Mystique
• Locus of Control
• Acceptance

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Chapter 9: Working With Others

• Working With Others
• Power
• Comparative Advantage
• Communication Overhead
• Importance
• Safety
• Golden Trifecta
• Reason Why
• Commander’s Intent
• Referrals
• Clanning
• Convergence / Divergence
• Social Signaling
• Social Proof
• Authority
• Consistency
• Incentive-Caused Bias
• Modal Bias
• Bystander Apathy
• Planning Fallacy
• Pygmalion Effect
• Attribution Error
• Option Orientation

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Chapter 10: Understanding Systems

• Understanding Systems
• Gall’s Law
• Flow
• Stock
• Slack
• Constraint
• Environment
• Selection Test
• Feedback Loop
• Autocatalysis
• Uncertainty
• Change
• Interdependence
• Second-Order Effects

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Chapter 11: Analyzing Systems

• Analyzing Systems
• Deconstruction
• Measurement
• Key Performance Indicator
• Garbage In Garbage Out
• Analytical Honesty
• Sampling
• Confidence Interval
• Counterparty Risk
• Ratio
• Norm
• Proxy
• Context
• Segmentation
• Humanization

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Chapter 12: Improving Systems

• Improving Systems
• Refactoring
• Optimization
• Critical Few
• Diminishing Returns
• Friction
• Automation
• The Irony of Automation
• The Paradox of Automation
• Standard Operating Procedure
• Checklisting
• Cessation
• Normal Accidents
• Resilience
• Fail-Safe
• Stress Testing
• Scenario Planning
• The Middle Path
• The Experimental Mindset

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I hope you enjoy the book!




11/18/11--23:42: Bulk Positive Randomness (chan 1852493)

Bulk Positive Randomness

“A bit of this and a bit of that is how newness enters the world.” – Salman Rushdie

I believe in the power of exposing yourself to as many different positive stimuli as possible – bulk positive randomness.

Here’s what my friend, Ben Casnocha, has to say about this practice:

Expose yourself to bulk, positive randomness and be ready to take advantage of it… Read books, travel, talk to people. Take in information and new experiences. Be in a mindset that allows your deepest assumptions to be challenged.

Bulk: This is the theory behind conferences. It’s more efficient when people and ideas are concentrated in one physical location. Another example of bulk randomness is a web site like Political Theory Daily Review which each day presents interesting (and intellectual) links in high quantity. Finally, any college or university serves up randomness on a silver platter: thousands of smart strangers concentrated in a small physical area for a long period of time.

Positive: There needs to be no significant downside. In other words, wandering around Darfur in the pursuit of random interactions is a bad idea.

Take Advantage of It: You need to seize the moment. If you randomly meet someone interesting, follow up. If you discover a wonderful nook in Barcelona and want to postpone your trek to Madrid, do it, and explore. If someone invites you to attend a speech by a hero but it conflicts with something already on your calendar (but less interesting), skip your existing appointment and go for it.

Recommended Resources for Bulk Positive Randomness

One of the best uses of the web is that you can intentionally use it to supply bulk positive randomness. The key is to subscribe to a few consistently thought-provoking, intelligently curated, semi-random sources of information across many topics. Taken together, the randomness quotient is quote high.

Here are a few sites I read on a daily basis for bulk positive randomness:

• Less Wrong (psychology, philosophy, rationality, cognitive bias, learning)
• Hacker News – Best (business, technology, programming, design)
• Delicious Popular (very random)
• Longreads (society, culture, politics, current events)
• Give Me Something to Read (society, culture, politics, current events)
• Longform.org (society, culture, politics, current events)
• Cool Tools (technology, home, hobbies)
• Survival Blog (preparation, contingency planning, scenario planning, outdoors)
• Science Daily (cutting edge science and research)
• TED Talks (technology, entertainment, design, social causes)
• Arts & Letters Daily (general interest, books, essays)

Do you have a favorite source of bulk positive randomness? Contact me and I’ll add it to the list.




11/18/11--23:42: Are You Indispensable? An Interview with Seth Godin (chan 1852493)

Are You Indispensable? An Interview with Seth Godin

26 January 2010



Seth Godin‘s new book, Linchpin: Are You Indispensable?, comes out today. As with all of Seth’s books, it’s a quick and inspiring read – if you aspire to make a difference in the world, you’ll find this book thought-provoking.

I recently caught up with Seth to ask him a few questions about the book – I think you’ll find our conversation quite interesting…

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Josh: First, let’s discuss the essence of the idea: what does it mean to be indispensable?

Seth: Today’s economy places little value on showing up, filling a cube, answering the phone. We can get people to do that cheaper than you, that’s for sure. Now, white collar workers, MBAs and executives are judged more harshly, or they’re replaced or outsourced. The job disappears.

So, to be indispensable is to do work your boss couldn’t imagine. It means that you’re human, an independent actor, an artist, someone who connects and makes a difference. These people have genuine job security, because what they do is scarce.

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Josh: It seems like there are a million ways a person could potentially be indispensable. Are some forms of indispensability better or more valuable than others?

Seth: You’re right, there are. But we’ve been brainwashed not to think that way. Look around you. When times got tough, what did most people do? They pulled back and worked hard to fit in, not to stand out. It’s like Purple Cow for people. The obvious thing to do is average stuff for average people, with a lot of hype. But what works? Exceptional work, unexpected insights and genuine connection.

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Josh: Can you figure out whether or not you’re already indispensable in some way? If so, how? Are there clues or characteristics to look for?

Seth: Do people come to you or do you go to them? Do you need a resume or do your references speak for themselves? Do you initiate or react? Do people seek you out and ask you to do something outside of your to do list? When was the last time someone asked you to come give a speech?

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Josh: The world is a big place – if you’re not already indispensable to someone or some group of people, do you have any recommendations about who or what to focus on serving?

Seth: This is the really cool part of the opportunity – because just about all the interesting jobs didn’t even exist a little while ago, no one is obviously more qualified than you. So first, figure out what you love (not the industry, the work) and then go do it. And second, decide to love what you do, because that’s a big part of it too.

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Josh: Is becoming indispensable an achievement, an ongoing process, a little of both, or something else entirely?

Seth: No way is it an achievement. You don’t stay indispensable for long. One day they’re scalping tickets to see you for $250 in the street, the next day you’re in the discount bin. The challenge is perpetual re-invention.

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Josh: It appears to be far easier to become indispensable if you choose to walk your own path and consciously break away from the norms of large systems that seek stability and predictability, like schools, governments, and big companies. Is that true? Can “cogs in the machine” become indispensable?

Seth: If you work for a company that prides itself on anonymous cogs, then success there actually means life career failure. That’s a sucker’s game. But I think there are more and more companies that pride themselves on building entire groups of indispensable people, linchpins, people who seek to make a difference.

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Josh: As you note in the book, our ancient “lizard brain” is always instinctively searching for pleasure, safety, and security. The process of becoming indispensable is often uncomfortable and feels quite risky. Do you recommend ignoring these instincts, or is there some way to use them to our advantage?

Seth: Here’s what I do: when I hear the lizard brain, the scared voice, what Steven Pressfield calls the resistance… I do precisely what it is afraid of. It’s my compass, but backwards.

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Josh: Generosity seems to be a major theme in the book. The general approach to becoming indispensable seems to be giving away significant value; the more you give, the more indispensable you become. At the same time, the defining moment of every self-supporting business is the transaction – no sales, no business. At what point do you transition from giving to trading?

Seth: I think the transition becomes easy when the thing you want to sell is naturally scarce. If you need custom work, fast work, exceptional inspired work… that’s what you’re going to pay for. Before you pay for that, I demonstrate to you how hard it is to live without it, because you’ve already seen what I can do for others (or perhaps for you).

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Josh: I love the connection you make between businesses that matter and art, which you define as “a personal gift that changes the recipient.” What do the most successful businesspeople and artists have in common?

Seth: Art has nothing to do with painting, and everything to do with change, emotion and connection. And isn’t that what smart, growing businesses do? We now pay for surprise and delight and productivity. Where do those things come from? Not from a manual. Not from a marketing textbook. They come from an artist.

---

Josh: Craftsmen and artists, more often than not, hate to compromise – even when their vision requires working with others, who may have different values or priorities. For example, changes to a building’s budget may impact an architect’s vision for the space. When is it better to walk away from situations that compromise your ideals? Is there a time and place for making tradeoffs to ensure the work becomes real? Does accepting tradeoffs make you any less of an artist or craftsman?

Seth: This is a spectacular insight, and I don’t know the answer. Certainly, there are artists that are so cocky and imperious and so afraid to work with someone else that they have no work at all. The challenge is to balance the trade offs. Not easy to describe, I think, but worth trying to do.

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Josh: A strong mental association many people have related to the idea of art is the image of the “starving artist” – a person who chooses to live a life of material want in favor of living their ideals, which are often anti-commercial. Does commerce cheapen art? Is the business artisan destined to live a life of relative poverty?

Seth: Commerce cheapens art, because art is a gift. But that doesn’t mean you can’t get paid for the souvenirs, for appearances, for the work you do that creates value… at the same time your generosity completes your art by adding a gift element. More complex than I can go into here, but in the book I try to outline precisely why a culture of gifts creates the connection that makes art actually happen.

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Josh: In the book, you say that art is the product of “emotional labor,” which is always difficult and guaranteed to provoke inner resistance. How can you tell the difference between something that’s difficult because it’s important and something that’s difficult because your plan isn’t working? Where does The Dip fit into the picture?

Seth: Difficult in this case only refers to the internal dialog. Hard to smile when you don’t feel like smiling. Hard to delight a customer when he’s a jerk. Hard to serve someone who is mocking you while you’re asking questions. But it’s that difficulty that creates real value, it’s what we get paid for.

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Josh: Self-education and self-improvement are subjects that are near and dear to both of us. What encouragement or advice would you give to someone who is determined to become indispensable and make the most of their life without the benefits (and detriments) of formal schooling or advanced certification?

Seth: Don’t pick a job that likes cogs.
Don’t pick a job that insists on advanced degrees.
Don’t look for safety.
Fail often.
Fail in public.
Try to find things people will criticize.
Learn from your mistakes, with eagerness.
Do difficult emotional labor that others fear.
Be generous.
Connect.

Have fun!

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You can order Seth’s new book, Linchpin: Are You Indispensable?, from Amazon.com or your local bookstore. Additional interviews and commentary about the book can be found via The Linchpin Posts.




11/18/11--23:42: Four Steps to the Epiphany - Steve Blank (chan 1852493)

Four Steps to the Epiphany – Steve Blank



Here’s the fastest way to fail in business: spend a lot of time and money developing something no one wants. That seems like common sense, until you realize that most businesspeople default to building something first, then trying to discover if someone’s interested in buying it. Bad move.

There’s another way to create valuable offers – a method that helps you ensure you have a market of customers willing to buy your offer before raising millions of dollars in venture capital. In Four Steps to the Epiphany, Steve Blank describes value-creation as a “Customer Development” process – discovering what your customers actually want, validating that you have something to offer them, making real sales, and then building the company to fulfill proven demand.

This isn’t the prettiest or most attractively-formatted book on the market, but Blank’s experience in starting real, successful companies shines in this book. A combination of essays, diagrams, and course notes from a popular class Blank teaches at Sanford, Four Steps to the Epiphany will help you validate your business idea before you sink years of effort and your life savings into a new business idea.

If you’re responsible for creating and testing new offers, skip Four Steps to the Epiphany at your own peril.




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11/18/11--23:42: School is "Just a Formality" (chan 1852493)

School is “Just a Formality”



“Every artist was first an amateur.” – Ralph Waldo Emerson

True story: my friend Corey recently moved from Washington DC, where she worked as a satellite radio producer / programmer, to Manhattan. Like many industries, the entertainment business is pretty tough right now, so she wasn’t having much luck finding work.

One of the things Corey loves most is baking, and she’s awesome. Her culinary skills have been honed by years of dedicated practice in her own kitchen, baking simply because she loves to. (Her cookies and cakes are particularly good.)

After a few months of fruitless job searching, Corey decided to try getting a job at a bakery. There’s just one catch: workers in high-end Manhattan bakeries typically require degrees from the French Culinary Institute or a similar school, which costs upwards of $40,000.

That didn’t stop Corey – instead of enrolling in culinary school and taking out loans, she did something even better: she offered to work for a bakery for free as an intern. Here’s why, in her words:

“Interning is way cheaper than culinary school and I get to learn specifically what I’m interested in… I’m sure [my coworkers] could kick my butt in making puff pastry, but do I really want to make puff pastry? No. I want to make cookies, and that I know how to do (and I’m learning more)… without $40,000 in loans.”

Instead of paying for her education, Corey managed to get it for free – working side-by-side with some of the best bakers in the city. Even better: after one of the bakers decided to leave for another job, Corey was hired to replace her.

Last week, Corey mentioned to her boss that she felt a bit intimidated being the only one in the bakery that didn’t graduate from culinary school. Here’s what her boss told her:

“Culinary school is just a formality. You know what you’re doing.”

Are you interested in improving your skills, or having a document hang on your wall to impress people? The former is far more important than than the latter, and there’s always a way to get what you want faster / cheaper / better by doing things differently.

(Photo credit: hsin26 on sxc.hu.)




11/18/11--23:42: New York Times - 7 Tools to Manage Social Media Overload (chan 1852493)

New York Times: 7 Tools to Manage Social Media Overload

by Josh Kaufman

“I get by with a little help from my friends… I’m gonna try with a little help from my friends.” – The Beatles

Today, I was featured in a New York Times article on social media. Many thanks to Stephanie Rosenbloom for including me.

I’m receiving a ton of questions about the tools and techniques I use to manage online information overload, so I decided to put together a few more details for your reference.

To get a quick feel for how I use social media, check out @joshkaufman (my Twitter account).

My Personal Social Media Rules:

1. Twitter is my primary service, since it’s the easiest to use and automate.
2. LinkedIn is for business contacts, former colleagues, and Personal MBA readers.
3. Facebook is for family and personal friends only.
4. Google+ has the same rules as Facebook.

Syndication: Facebook & LinkedIn Twitter Accounts

As I mentioned in the NYT article, everything I do in social media is posted to Twitter first. Those posts are then automatically syndicated to Facebook and Twitter.

Facebook – I use Facebook’s official Twitter application to syndicate my Twitter posts to my Facebook wall.

LinkedIn – Likewise, I use LinkedIn’s built-in Twitter features (found under “Settings” —> “Manage your Twitter settings”) to syndicate my Twitter posts to LinkedIn.

Syndication saves me so much effort it’s ridiculous. It’s a smart way to cut your social media time in half, easily.

Automation: Twitterfeed & Buffer

I love automation. Since I don’t want to be tied to the computer all day, automation programs make it easy to spend a little time deciding what I want to do, then have those things happen automatically.

Twitterfeed is a tool that allows you to synchronize an RSS feed to a Twitter account. Every time I publish something new on PersonalMBA.com, it’s automatically posted on Twitter, and is also syndicated to the Personal MBA Facebook Page.

Buffer is an online application that helps you schedule Twitter posts in advance, so you don’t overload your readers. I try to keep 1-2 days worth of posts in my Buffer, which are mostly links to articles and posts that are interesting or useful.

Twithawk is an online application that helps me find people who are talking about The Personal MBA. This helps me respond quickly to my readers without having to follow a billion people. (As the article mentions, I actively follow 86 people on Twitter, mostly colleagues and friends.)

What’s the Business Return on Investment?

I’ve found that social media is a worthwhile investment, in small doses. Here’s why:

• I’m now friends with people I originally met via social media, particularly Twitter.
• People who say kind things about my book are more likely to leave a review if I have a conversation with them personally.
• My work spreads very quickly via social media, so it amplifies the results of things I’m already doing.
• It doesn’t take a lot of time or money, so my total investment is small. (Investing hours and hours a day would be different – that’s too much of an Opportunity Cost.)

My Comprehensive Morning Social Media Checklist

1. Reply to comments from friends via official Twitter for Mac application.
2. Check Twithawk to find new conversations about the Personal MBA, and reply as needed.
3. Fill Buffer with links to interesting business-related articles.

That’s it. The whole process takes no more than 10-20 minutes. I usually do this while my daughter is taking her morning nap.

When it’s time to work…

I turn off the internet. Seriously.

Freedom is a desktop application that disables your internet connection completely for up to 8 hours. Freedom allows me to continue using my computer without the risk of falling into a rabbit hole of “research” instead of writing. It’s safe to say that, without Freedom, my book wouldn’t exist today.

Editing /etc/hosts. This is a useful technique if you’re comfortable with technology. I use the hosts file to permanently block specific sites like Reddit, Digg, Stumbleupon, etc. to make it difficult to procrastinate via random web surfing. When I notice myself spending a lot of low-value time on a website, I block the site in my hosts file to reclaim that time. Here’s a tutorial on how to use the hosts file via Lifehacker.

These are both examples of Guiding Structure: by using your willpower to block websites once, you don’t have to rely on willpower during the day to get things done.

On a practical note…

There are people out there who are using social media for awesome things. Example: Dan Portnoy (one of my clients) is using social media to raise millions of dollars for non-profits that are doing important work. Dan is about to release a book called “The Non-Profit Narrative.” If you’re interested in how to use social media for great good, Dan is the guy to follow.

Here’s what I’ve learned from Dan: if you invest in telling a story worth paying attention to, these tools can spread your message far and wide. All it takes is a bit of strategy, effort, and persistence.

This post was created by Josh Kaufman, an independent business teacher and author of The Personal MBA: Master the Art of Business. To receive Josh’s notes on the best business books available and other Personal MBA blog updates, be sure to sign up for the Personal MBA newsletter – it’s absolutely free.




11/18/11--23:42: Real Artists Ship (chan 1852493)

Real Artists Ship



Image credit: Allan Rosenow, EpipheoStudios.com

“Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.” – “Think Different”, an advertising campaign for Apple Inc, 1997.

It’s easy to have opinions about how something “should” be. To whine, complain, or grumble that the world isn’t living up to your expectations. To have certain tastes, and be disappointed that others aren’t delivering them.

Steve Jobs had very strong opinions about how the world should work. Instead of complaining or waiting for someone else to act, he focused on creating beautiful objects that brought the world closer to what he imagined.

Steve was a true craftsman: an artist that shipped. Over and over again.

Steve Jobs, Steve Wozniak, and Ronald Wayne founded Apple 35 years ago. In three and a half decades, Steve built himself a legacy many times over.

In Steve’s words, “real artists ship.”

Life is short. What are you creating today?




11/18/11--23:42: Escape from Cubicle Nation by Pamela Slim (chan 1852493)

Escape from Cubicle Nation by Pamela Slim



If you’re sick and tired of “working for the man,” suffering through soul-sucking meetings and typing up TPS reports, you’ve probably dreamt of breaking free and working for yourself. Your heart longs to leave your bleak cubicle-bound existence behind, but you’re scared – scared of making a bad decision, losing everything, and living in a van down by the river.

In the immortal words of Pamela Slim, “Hating your job intensely is not a business plan.” Escape From Cubicle Nation is a comprehensive primer on how to make the leap from corporate employee to entrepreneur – without freaking out.

Pam Slim is equal parts practical and supportive – exactly the right combination of qualities when you’re equal parts wound up and stressed out. From crafting a workable business plan to dealing with details like taxes and insurance, Escape From Cubicle Nation will help you stop dreaming and start making your fledgling business a reality.

I found Pam’s advice and support hugely useful in my own transition from corporate employee to thriving entrepreneur, and if you’re looking to make the leap, I’m sure you will as well.




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11/18/11--23:42: Best of the Personal MBA, 2009 edition (chan 1852493)

Best of the Personal MBA – 2009 edition

14 January 2010



I was recently combing through the Personal MBA’s archives, and I did a quick analysis on which posts were most popular on the blog last year. Here are the top 15 posts from 2009… enjoy!

1. Do You Have These Core Human Skills?
2. The 4 Most Valuable Things I Learned in Business School
3. “Branding” Is an Overrated Buzzword
4. 10 Time-Tested Ways to Make Money
5. Use What You Make
6. The Dangers of Mystique
7. Experimenting with Delegation and Outsourcing
8. How to Get a Valuable Education Without Mortgaging Your Life
9. How to Handle Business Book Narcissism
10. Learning Via Self-Experimentation
11. 49 Questions to Improve Your Results
12. Absence Blindness
13. Resilience: The Secret of Surviving Anything
14. On Discounting
15. The Secret of World-Class Performance




11/18/11--23:42: Announcing Personal MBA Local Meetups Worldwide (chan 1852493)

Announcing Personal MBA Local Meetups Worldwide

By Josh Kaufman

If you’ve visited http://community.personalmba.com recently, you’ve probably noticed a big change.

I’ve been following the Community closely for the past year to see how people are using it. The most popular feature, by far, is to create a group to meet with Personal MBA readers in your local area.

Unfortunately, the old community forums aren’t optimized for local groups. They’re easy to create, but difficult to find and use. As a result, we have hundreds of groups with only a few members each.

Let’s change that.

The new http://community.personalmba.com is optimized to help you create and organize local Meetup groups, so you can get to know Personal MBA readers and businesspeople in your area, wherever you are in the world – even if you’re traveling.

Announcing “Personal MBA Worldwide Meetup Day”

In addition, I’m designating the first Thursday of every month as “Personal MBA Worldwide Meetup Day.” Every month, we’ll get together to share what we’re working on, what we’re currently having trouble with, and resources and books we’ve personally found useful. The goal is to help each other out as much as possible. (If you want to get together more often than once a month, feel free – the new site makes it easy to organize events whenever you want.)

Here’s what to do:

1. Visit http://community.personalmba.com
2. Search for local Personal MBA groups in your area
3. If a group already exists, click the “Count me in” button to attend
4. If a group doesn’t already exist, create one – it’s easy!

I’m hosting a Personal MBA Meetup in my hometown (Fort Collins, Colorado) on May 5th. I hope you’ll step up and lead a local group in your town on May 5th as well – it’s easy, it’s free, and it’s a great way to meet interesting people.

Bring a friend, and have fun!




11/18/11--23:42: StrengthsFinder 2.0 - Tom Rath (chan 1852493)

Book Notes: “StrengthsFinder 2.0” by Tom Rath

By Josh Kaufman



This post contains my personal notes about the big ideas in Tom Rath’s StrengthsFinder 2.0. My book notes are different from many of the book summaries you’ll find on the web. Instead of following the structure of the book in question, we’ll isolate and examine the key ideas and themes that make the book useful. Along the way, I’ll tell you how I actually apply the ideas. Enjoy!

If you’re ready to stop wasting time doing work you’re not good at, Tom Rath’s StrengthsFinder 2.0 can help you become more productive, experience less stress, and have more fun at work.

About Tom Rath



Tom Rath is the author of the Personal MBA-recommended book StrengthsFinder 2.0_, as well as Wellbeing: Five Essential Elements_, Strengths-Based Leadership, and Vital Friends. For more information about his work, check out the Gallup website.

Here are 10 big ideas from Tom Rath’s StrengthsFinder 2.0…

1. Contrary to popular opinion, talent and potential matter a lot.

As uncomfortable as it is to say, you can’t be anything you want to be – without a certain amount of natural ability, even the most dedicated person won’t be very effective.

For example, I’m a lean 5’11" and 165 pounds. No matter how much I want to become an NFL linebacker, it’s just not going to happen – a certain build, talent, and mentality is required to do the job well. No matter how hard I worked, I’d never be good enough to play professionally – all of my effort would be easily surpassed by others with more talent who also work hard.

In the same way, talent matters in business. Certain jobs (like being a CEO or project manager) require different skills to be world-class. If your skills lie in different areas, you won’t be very effective. Instead, you’ll find yourself doing everything you can just to keep your head above water, which isn’t productive for anyone.

2. For best results, focus on doing what you’re naturally good at.

Everyone has areas in which they’re naturally talented, and areas in which they’re naturally weak. There’s nothing wrong with that – it’s a byproduct of how our brain grows. Strong neural connections grow stronger with use and social reinforcement, and weak neural connections grow weaker over time.

What that means for you is that you have certain areas of natural talent you can capitalize on. By focusing on doing the things where you have natural potential, you can quickly develop areas of valuable strength.

3. Time spent developing areas of weaknesses is time ill spent.

Most business review processes highlight weaknesses (euphemistically called “areas of improvement”), then focus on eradicating them. StrengthsFinder 2.0 argues that this is a waste of valuable time and energy – instead, you should focus on finding areas of strength and doing everything you can to improve them.

That isn’t to say it’s never smart to work on improving things you’re bad at: baseline competence is important in many areas. If you’re running a business and having trouble paying the bills, it pays to learn more about accounting and budgeting. That doesn’t mean you should start studying for the CPA exam – you just need to understand enough to avoid bankrupting your business in the short-term and identify competent people to help you as soon as possible.

4. Partner with others who have different strengths that complement yours.

Comparative Advantage is the idea that people are better off not trying to do everything themselves – it’s far better for everyone if you focus on what you’re best at, then partner or trade with others for everything else.

If you’re weak in a particular area, it’s smart to find someone to work with who’s naturally strong in that area. Instead of burning a huge amount of time and energy shoring up your weakness, working with someone else allows you to focus on doing what you do best.

You don’t have to do everything yourself – by partnering with other people who have complementary strengths, you can get more done.

5. Diverse teams are more effective because they have a larger pool of strengths to draw from.

Much has been made of the value of diversity in business literature, and strengths-based management explains why diversity works. If everyone on your team has the same strengths and background, it’s much easier to get stuck on problems requiring skills in the team’s mutual area of weakness.

Diverse teams have a much larger pool of strengths and experiences to draw from, so it’s easier to solve challenges as they occur. Everyone doesn’t have to be awesome at everything – by working together, diverse teams can accomplish their objectives far more effectively.

6. Encourage peers and direct reports to focus on utilizing their strengths, not “areas of improvement”.

People do better work if they focus on their personal areas of strength. If you have an employee who is brilliant at strategic planning but horribly ineffective in front of customers, it doesn’t make much sense to assign them to sales in order to “shore up” that weakness. Assigning an A performer to another role that requires different strengths is a very good way to make them a C performer or worse.

If you’re responsible for evaluating peers or managing others, identifying their strengths and capitalizing on them can make them much more effective. Let your people focus on doing what they’re best at (and compensate them accordingly), and you’ll accomplish much more.

Many of my clients have used the assessment in StrengthsFinder 2.0 as a team exercise – it’s an inexpensive, high quality tool you can use to learn more about the people you work with. Understanding the strengths of the people you work with is the first step in ensuring everyone is focusing on what they can do best.

7. Hire for talent and develop for strength.

Depending on what you need to do, looking for particular strengths pays off in the recruitment / hiring process. If you’re hiring a salesperson, strengths like Achiever and Woo are good indicators that the candidate has the skills and mindset necessary to succeed.

I have no plans for building a huge team, but if I was hiring, I’d have hiring candidates complete a StrengthsFinder profile after they pass the pre-screen – it’s a quick way to learn a lot of valuable information about a candidate that can help you place them in the right assignment. Once they’re in suitable role, you can build upon their areas of natural talent.

8. Build your activities and schedule around your strengths.

Knowing your areas of natural strength is hugely valuable. By consciously taking up projects and hobbies that use your strengths, you can become even better at what you do.

I’ve had several positions where the job didn’t suit my strengths, and I was miserable in each one. My best corporate job was my last position, which I enjoyed because I could use so many of the skills that came naturally to me.

My strengths are Learner, Input, Ideation, Maximizer, and Strategic, so it makes sense for me to schedule my daily/weekly activities around these strengths. I dedicate an enormous percentage of my day to reading, research, writing, and discussing strategies and ideas with my clients because that’s what I do best. Other things can be delegated or outsourced; time and energy are precious, so I focus on what I’m best at.

I wouldn’t choose to work any other way – I love my work because it engages everything that comes naturally to me. Getting things done and being happy doing them is a wonderful combination.

9. Intentionally focus on activities that help you develop your talents into strengths.

A talent only becomes a true strength after it’s developed, which means consciously focusing on building your skills and experience in that area. Many companies send employees who have little natural talent or inclination for public speaking to training programs, which is a waste. Instead, it’d be better for the best public speakers to attend – they’ll get more out of it, resulting in a few excellent speakers instead of many mediocre speakers.

By seeking out opportunities to build upon your skills, you can make your strengths even more pronounced.

10. Identify areas where you’re using more than one personal strength at a time – those are activities in which you can be world-class.

One of the ideas I wish Rath would’ve discussed more in StrengthsFinder 2.0 is combinations – areas in which you use more than one strength at a time. In my experience, situations where you’re using many strengths in combination are the ones where you can really excel.

When you’re using more than one strength while working on a task, your talents aren’t added – they’re multiplied. If you’ve ever seen someone perform a job brilliantly, it’s likely they’re engaging multiple areas of strength while doing it.

If you can find work that engages 3-5 of your top strengths on a daily basis, you’ve found the recipe for work that will make you happy, wealthy, and successful for many years to come.

This summary was created by Josh Kaufman, an independent business teacher and author of The Personal MBA: Master the Art of Business. To receive Josh’s notes on the best business books available and other Personal MBA blog updates, be sure to sign up for the Personal MBA newsletter – it’s absolutely free.




11/18/11--23:42: The Partnership Charter - David Gage (chan 1852493)

The Partnership Charter – David Gage



Businesses that fail typically close due to one of three common reasons: (1) they go bankrupt; (2) it’s not worth it – too much effort for too little reward; (3) irreconcilable differences between the founders or partners that own the business.

Even the most profitable business can close due to disputes between partners, but starting a business with one or more partners is extremely common. The Partnership Charter will show you how to set expectations with your partners before you have issues, making it easier to resolve them quickly and amicably.

The The Partnership Charter_ presents a plain-language, common-sense process for negotiating your business relationship with your partner(s). I’ve personally used the concepts in _The Partnership Charter to negotiate my own partnerships, as well as coach several of my Personal MBA Coaching clients through tough issues with partners, with great success.

The Partnership Charter works – if you’re already working with a partner or plan to work with someone in the future, read this book first.




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11/18/11--23:42: The Power of Less - Leo Babauta (chan 1852493)

Book Notes: “The Power of Less” by Leo Babauta

By Josh Kaufman



This post contains my personal notes about the big ideas in Leo Babauta’s The Power of Less. My book notes are different from many of the book summaries you’ll find on the web. Instead of following the structure of the book in question, we’ll isolate and examine the key ideas and themes that make the book useful. Along the way, I’ll tell you how I actually apply the ideas. Enjoy!

You don’t have to feel like you’re bearing the weight of the world on your shoulders in order to be a productive person. In The Power of Less, Leo Babauta masterfully teaches the fine art of focusing on the essential and eliminating the superfluous.

About Leo Babauta



Leo Babauta is the author of the Personal MBA-recommended book The Power of Less_, as well as the blogs Zen Habits, mnmlist, and blank">Write to Done.

Here are 10 big ideas from Leo Babauta’s The Power of Less…

#1: Simplicity means identifying what’s essential, then eliminating the rest.

It’s easy to get caught up in the demands of modern life – the world is constantly increasing in complexity, and placing more and more demands on your attention. If you try to tackle everything that grabs your attention, you’ll constantly find yourself stressed, overwhelmed, and burned out.

Simplicity is the art of focusing only on what’s essential to your goals and your personal satisfaction, and ignoring the rest. Instead of paying attention to everything, simplicity is choosing to pay attention only to things that matter the most, and ignoring the rest.

#2: Focusing on the essential produces the most results for the least effort.

Since you only have so much time and energy each day, focusing only on what’s most important allows you to spend a much greater percentage of your time on things that will produce the most results.

Instead of spreading yourself too thin, focusing on the essential helps you accomplish the things that matter most. That requires making decisions: constantly choosing what not to focus on or care about at that particular moment in time.

#3: You must set limits – they don’t set themselves.

Most people avoid setting limits, which is a mistake. Without limits, it’s easy to assume that everything is important, and that you’ll be able to do whatever is necessary to get everything done.

Without setting limits, it’s very easy to waste time and energy working beyond the point of Diminishing Returns. Parkinson’s Law states that “work expands to fill the time allotted” – that’s why it’s easy to work until you collapse, surf the internet endlessly, and spend too much money on things that don’t really matter.

You must set limits for yourself. The essence of prioritization is deciding not to do something. If everything is a #1, must-do priority, you haven’t really prioritized anything, since you haven’t made a choice.

#4: Focus on only one thing at a time.

Multitasking is a myth – our brains are only capable of truly paying attention to one thing at a time. When we think we’re multitasking, all we’re really doing is rapidly switching the focus of our attention from one thing to the next. Every time your focus shifts, it takes your mind a while to load the information it needs to operate effectively.

That’s a Friction cost I call the “Cognitive Switching Penalty” – every time you switch focus, you pay the price. The less you switch, the less of a price you pay to be productive.

#5: Limit your active goals and projects to no more than 3-4 at a time.

Of all of the recommendations in The Power of Less, this is the most challenging, the most controversial, and the most powerful.

If you’ve ever created a list of all of your active projects, it’s likely that it contains over 30 things you’d like to accomplish. Some projects are personal, some are family-related, and others are added to your plate via your work. You may not feel like you have a choice about taking on these projects, but you do.

Think of this recommendation as a way of applying “overwhelming force” to a task to get it done as quickly as possible. Instead of trying to do 30-40 things at once (and failing miserably), limiting your active projects to no more than 3-4 preserves your focus and attention, allowing you to actually accomplish your most important objectives quickly move on to the next.

Personally, I keep a list of projects I’d like to do in a “Someday / Maybe” list, which David Allen recommends in Getting Things Done. The most important of these projects are promoted to my active list, which I keep on a 3×5 index card in the notebook I use to track my to-dos. This simple practice helps me focus on what’s most important right now, and temporarily ignore the rest.

#6: Establish three Most Important Tasks (MITs) every day, and do those before working on anything else.

All people are created equal, but all tasks aren’t. On any given day, there are a few things that you could accomplish that would represent huge progress toward your most important projects. Those are your Most Important Tasks (MITs).

For maximum daily productivity, create a list of 2-3 MITs in the morning (or the night before). When you start work in the morning, your goal is to accomplish your MITs as quickly as possible – unless there is a true emergency, all other tasks can wait, since they’re (by definition) less important.

Once you accomplish your MITs, the rest of the day is a bonus – you’ve already accomplished the tasks that represent major progress toward your most important objectives.

#7: Batch similar tasks together to preserve your focus.

Every time you switch the object of your focus, you lose a great deal of productivity – the nefarious Cognitive Switching Penalty. To avoid the penalty, it pays to find ways to switch your focus less often.

Batching is the practice of grouping similar tasks together, then tackling them all at once. Take, for instance, checking e-mail – if you check every 5 minutes, you’re constantly switching your focus and incurring the penalty. If you check and respond to your e-mail at set times during the day (say, 10:00am and 4:00pm), you can get the same amount done in less time.

Errands are particularly useful to batch – how productive would it be to drive to the grocery store every time you want to buy a single item? Putting what you need on a list, then buying everything at once is clearly more efficient. Doing multiple errands at once, like going to the post office right before you go grocery shopping, is even better.

Personally, early afternoons on Monday and Friday are my “miscellaneous task” times. Having a set time to batch non-critical tasks makes it much easier to stay focused, while still keeping on top of routine tasks like paying bills, cleaning, and routine car maintenance.

#8: Installing positive habits is easiest when you start small, then build on your early success.

When attempting to create positive Habits, most people make the mistake of trying to make too many changes at once. Installing or changing habits takes willpower, and willpower is a very limited resource. Spread your willpower too thin, and it’ll be difficult to make any of your desired habits stick.

For best results, focus only on installing or changing one habit at a time, and start with small increments. If you want to start doing 100 pushups a day, start with one. Every day, add another. Building on momentum makes it much easier to make the habit stick.

Whatever you do, focus on ONE (and only one) habit at a time. Practice that habit until it becomes second-nature, requiring no thought or willpower to do every day. Then, and only then, should you choose another habit to install.

#9: Consciously minimize your active commitments, and don’t be afraid to say “no” to new ones.

Unless you consciously control your active commitments, they’ll expand until you’re overwhelmed. It’s tempting to say yes to everything in an effort to be supportive and helpful. Few of us like the feeling of denying requests for help or disappointing others, which makes “yes” our default response to requests.

Here’s the truth: your time, attention, and energy are finite. When you overwhelm yourself with commitments, you’re shortchanging the most important activities that will contribute the most to your productivity, satisfaction, and success. You’re also shortchanging the less important commitments, since they’re competing with all of the other critically important projects in your world.

It’s ultimately kinder to the people you care about to be very up-front with them about your current priorities. It’s never okay to “half-ass” commitments – either commit to being “full-assed,” or “no-assed.” Compromising your commitments by keeping the weight of the world on your shoulders leads to poorer results for everyone involved.

#10: Slow down, pay attention, and enjoy the process.

Life can quickly pass us by unless we choose to slow down. Looking back on life, one of the most common regrets people express at the end of their lives is that it all went too quickly, and they didn’t focus enough on what was clearly the most important – family, friends, important contributions, and enjoying the small moments of life.

Slowing down is the best gift you can give yourself, your friends, and your loved ones. When all is said and done, no one really cares how many zeros you have in your bank balance, what your job title is, or how many followers you have on Twitter.

Recent research indicates that memorable experiences do impact your happiness and life satisfaction, so it pays to focus on ways to create memorable experiences. Slowing down and mindfully enjoying your daily experience of life is simple, effective, and free.

This summary was created by Josh Kaufman, an independent business teacher and author of The Personal MBA: Master the Art of Business. To receive Josh’s notes on the best business books available and other Personal MBA blog updates, be sure to sign up for the Personal MBA newsletter – it’s absolutely free.




11/18/11--23:42: Brain Rules - John Medina (chan 1852493)

Book Notes: “Brain Rules” by John Medina

By Josh Kaufman



This post contains my personal notes about the big ideas in John Medina’s Brain Rules. My book notes are different from many of the book summaries you’ll find on the web. Instead of following the structure of the book in question, we’ll isolate and examine the key ideas and themes that make the book useful. Along the way, I’ll tell you how I actually apply the ideas. Enjoy!

If you don’t know how the human brain works, you’re at a major disadvantage when it comes to business: cognitive literacy can help you discover why you behave in certain ways, as well as help explain the behavior of others. John Medina’s Brain Rules is an entertaining and informative look at how our brains work – and how we can put that knowledge to practical use.

About John Medina



John Medina is the author of the Personal MBA-recommended book Brain Rules_, as well as the upcoming book Brain Rules for Baby, which is about childhood neurological development. For more information about John Medina’s work, check out blank">http://www.brainrules.net/.

Here are 10 big ideas from John Medina’s Brain Rules…

#1: Our brains are fundamentally physical systems that require proper nutrition, exercise, rest, and sleep to function optimally.

Your mind and your body aren’t separate things – your brain is a physical system that has physical needs. Similar to the primary ideas in The Power of Full Engagement, you can’t skimp on things like sleep, exercise, and rest if you want your mind to function at peak performance.

#2: Everyone’s brain develops differently, based on their experiences and physical environment.

Your brain is malleable – a concept neuroscientists call “plasticity.” The structure of your brain literally changes as your environment and experiences change – a process that continues as long as you live.

Since everyone experiences a slightly different environment and very different experiences over a lifetime, everyone ends up with a unique brain that processes information in a unique way. While there are many commonalities, there is no “standard” brain.

#3: The brain is primarily a survival tool that pays particular attention to threats and opportunities by stimulating emotions and actions.

Our brains are designed to protect us. 10,000+ years ago, threats were everywhere in our environment – enemy tribes, predators, dangerous animals, and hostile elements. In order to survive long enough to reproduce, our ancient ancestors had to live long enough to take advantage of available opportunities.

Our modern Environment is very different than what our ancient ancestors experienced – opportunities are plentiful, and true life-threatening dangers are relatively scarce. This dynamic leads to what I call Caveman Syndrome – since we’re trying to run modern software on ancient hardware, our prehistoric brains constantly magnify perceived threats and overlook opportunities. That’s why humans often seem to do so many irrational and inefficient things.

#4: Multitasking is a myth – your brain can only focus on one thing at a time.

Think of attention as the beam of a flashlight. No matter how hard you try, you can never shine the flashlight on two separated objects simultaneously – all you can do is rapidly switch the beam back and forth between them.

Our Attention works the same way. True multitasking, in the sense of paying attention to more than one task in parallel, is beyond the capability of the human mind. When you’re juggling tasks, all you’re really doing is switching the focus of your attention back and forth between the tasks you’re trying to keep track of.

Every time you switch, you lose productivity, since your brain has to take a moment to re-load information about what you’re trying to focus on. I call this the Cognitive Switching Penalty, and it’s a productivity killer.

For best results, focus on one (and only one) thing at a time. Multitasking may make you feel more productive, but it’s only a feeling – and that feeling is misleading.

#5: Emotion, context, and repetition can help consolidate and store patterns as memories in our brain.

Our brains don’t work like computer disks, storing information in neat little organized files. Memories are patterns that are stored once they are recognized in the world at large. The key to remember is that memories are contextual – stored in a massive network of Associations and relationships, which your brain uses to recall patterns quickly.

Emotion and repetition help consolidate memories because they’re indicators of importance. Things that excite, frighten, depress, or anger you are stored more quickly because those emotions are very important ancestral survival cues. Repetition indicates that the pattern is common in the environment, which also is a clue that it’s important in some way.

If you’ve ever wondered why beer ads feature bikini-clad women and confident men, the 6:00pm news is frightening and depressing, or why people care what brand of golf clubs Tiger Woods prefers, remember that memory works via context and association.

#6: Our brains mix long-term memories with new sensory data to mentally simulate potential actions before we actually act.

One of the reasons our brain is so useful is that it helps us predict the consequences of our actions. Mental Simulation allows us to imagine the results of our actions before we actually act, which keeps us out of trouble. Our brain is constantly in Pattern Matching mode, saving the results in memory.

When we’re trying to figure out what to do in any given situation, our brains rely on the patterns stored in memory to figure out what to do. Combined with the perceptions we’re taking in of our environment, memories help us quickly figure out what to do next when the best action to take is unknown or ambiguous.

#7: Chronic stress and exhaustion can dramatically affect your brain’s ability to function and learn.

Our bodies and minds are built to handle stress, but not for very long. Remember the ancestral environment – threats were sudden and acute, but brief. (Either the tiger caught and ate you, or it got bored and went away after a few minutes.)

Now, stresses are much less acute, but can be chronic – you can be afraid of your boss firing you for decades, and we aren’t very well equipped to handle stress for that long. The hormones involved (adrenaline, cortisol, DHEA, etc) can wreak havoc on our bodies and minds if present in our systems every hour of every day.

When you’re stressed and tired for too long, your mind begins to function at a much lower capacity, impairing your ability to think and make decisions. We’ll talk about ways to avoid this cycle in The Path of Least Resistance, but for the moment, if you’re chronically stressed and tired, you need to change the structure of your environment to remove the primary stressors ASAP.

#8: The best way to capture someone’s attention is to constantly provide a wide array of new input in as many sensory modalities as possible.

Our minds are drawn to pay attention to new stimuli. Look at media like TV, movies, video games, and the Internet – they’re constantly changing, providing new things to pay attention to every few seconds. That’s why it’s so easy to lose hours paying attention to them.

On the flip-side, have you ever tried to meditate or just sit in an empty room for a few minutes? In a few minutes (seconds?), you’ll inevitably begin to feel anxious, and your mind will start searching for something new to pay attention to.

If your job involves attracting and keeping Attention, don’t underestimate how much the human mind needs Novelty. At a minimum, when you’re in a live environment, introduce a new idea or stimulus every 10 minutes or less – that’s how Dr. Medina intentionally structures his coursework for maximum sustained student attention.

#9: Gender differences are very real – male and female brains have important physical differences.

Regardless of political and ethical questions of gender equality, male and female brains are empirically different. The exact differences aren’t completely understood, but it’s a mistake to assume male and female brains work the same way.

Male brains, physiologically, have a larger amygdala (which plays a primary role in processing emotional reactions) and produce serotonin (a neurotransmitter involved in many behaviors, including social dominance and aggression) more quickly. As a result, males under stress tend to engage the right hemisphere amygdala and work to get a quick overall read on the situation to identify potential threat and next actions.

Female brains under stress engage the left amygdala, which is responsible for parsing the emotional details of perceptions vs. the gist. Female brains also tend to develop much more quickly when it comes to verbal and social skills, and on the whole, tracking and maintaining complex relationships between people comes much more naturally. In a sense, female brains process social cues in much higher resolution than male brains.

Since male and female brains are different, it pays to consciously benefit from both approaches by valuing and planning for them – one of the many compelling arguments for diversity in your team, which we also discussed in StrengthsFinder 2.0.

#10: Our brains remain plastic throughout life – we’re constantly learning via exploration and experimentation.

The old model of human neurology was that, after childhood, your mental capacity and skills were fixed and incapable of change. New advances in neuroscience indicate that the brain continues to change and grow throughout life, which is good news for learning new tricks at any age.

If you’ve ever assumed you’re “too old” to master a new skill or try something different, that’s good news. Your brain will always maintain the capacity for change and growth, which means you’re capable of making progress toward any goal you set your mind to. The best way to learn new things is to explore and Experiment, so go out into the world and try something new!

This summary was created by Josh Kaufman, an independent business teacher and author of The Personal MBA: Master the Art of Business. To receive Josh’s notes on the best business books available and other Personal MBA blog updates, be sure to sign up for the Personal MBA newsletter – it’s absolutely free.




11/18/11--23:42: Fortune's Favor (chan 1852493)

Fortune’s Favor

Browsing through a few business history books this afternoon (The Age of Heretics, The Book of Business Wisdom, Brand New), I was struck by two related insights regarding why and how businesspeople become successful.

“Fortune Favors the Bold”

The boldness of business leaders has been a recurring theme in the business media for centuries. Think Bill Gates / Steve Jobs / Larry Page & Sergey Brin setting up shop in the garage with little more than an idea. Here’s the motif: a vision of the future compels the leader to take action, and nothing can deter them from achieving wealth and ultimate success.

Part of this business myth is true: you can’t get abnormal returns if you stick to normal behavior. Having an idea and exploring it in the face of uncertainty is the essence of business practice.

If you want to achieve great things, you must consistently take bold actions. Seeking complete security is the road to complete and lasting mediocrity.

“Fortune Strikes Down the Bold When They Get Stupid”

Bold action alone is not enough – you must know what you’re doing for your actions to create the results you want. Boneheaded decisions don’t build businesses.

Imagine the courageous entrepreneur, armed with a business plan that proposes selling 20+ pound bags of dog food on the internet. No amount of bold action is going to compensate for the fact that shipping heavy objects is expensive, and customers hate paying for shipping when they buy online.

It happened – Julie Wainwright was the CEO of Pets.com, one of the most spectacular tech bubble collapses. She was bold, but didn’t fully understand what makes businesses successful. She learned these lessons the hard way.

Donald Trump seems to be stress testing the bold/stupid line with each new venture, and teeters on the edge of bankruptcy. It seems Trump’s bold statements are merely masking the stupidity – for the time being, at least.

One of the reasons I focus on teaching business mental models is that learning the essentials helps amplify the results of bold people. If you have the courage to test a business idea, a little know-how goes a very long way.

Be bold, but don’t be stupid. Learn the rules and optimal strategies of the game you’re playing. Lady Luck (or is it Madam Probability?) won’t let you win every time, but you’ll win more often than most.

Accurate knowledge + bold action = a force to be reckoned with.




11/18/11--23:42: Fail Safe Investing - Harry Browne (chan 1852493)

Book Notes: “Fail-Safe Investing” by Harry Browne

This post contains my personal notes about the big ideas in Fail-Safe Investing by Harry Browne. My book notes are different from many of the book summaries you’ll find on the web. Instead of following the structure of the book in question, we’ll isolate and examine the key ideas and themes that make the book useful. Enjoy!

“Rule #1: never lose money. Rule #2: never forget Rule #1.” – Warren Buffett, renowned investor

For many (if not most) of us, business is attractive because it’s a way to make money: to support ourselves and our loved ones, and to get more of what we want out of life. It’s ironic that one of the biggest threats to our long-term financial success is our personal investment strategy. With plenty of market volatility to go around these days, it pays to consciously adopt a sane, secure long-term investing strategy.

That’s where Harry Browne’s Fail-Safe Investing comes in. Here are 10 big ideas from Fail-Safe Investing…

1. No one can predict the future. Period.

No one has the foggiest idea what’s going to happen next week, let alone next year. The future is an inherently uncertain place that changes all the time. No one – absolutely no one – is omniscient.

That includes YOU. Beware Excessive Self-Regard Tendency. It’s tempting to believe that you have insights that others don’t have, and see things others can’t (or don’t) see. It’s also tempting to believe other people, like advisors or fund managers, have this capability. They don’t.

Embracing the uncertainty and change that exists in the world is the first step toward becoming a sane investor. Once you truly grok the truth that the future is essentially unpredictable, you stop trying – and you stop making stupid mistakes that lose money, which helps you get better results.

2. Your career is your #1 source of wealth: don’t assume your monetary wealth is quickly replaceable.

When it comes to investing, it pays to err on the side of safety. Your career is (and will continue to be) your #1 source of material wealth. Most of the money you’ll make in your life will come from your career. The money you have to invest as capital will come from your career.

You work hard for your money, so don’t part with it quickly for a promise of huge speculative returns. If you experience losses, you may very well not be able to get that money back.

On the flip side, investing in your own personal knowledge and capabilities always provides the best returns. Too many people spend time and energy trying to perfect their investment approach, at the expense of developing their career. That’s a mistake.

By investing your money in books and courses that improve your skills and capabilities, you can use what you learn to build businesses that bring in tens of thousands (or millions) of dollars every year. You’ll never find a better return on investment anywhere.

I recommend setting aside a certain sum of money every month in a “Personal R&D fund”: an account earmarked for personal investment. Investing in yourself will pay dividends for rest of your life.

3. There’s a huge difference between investment and speculation.

Investment is using your capital to purchase assets you believe will appreciate in value. Most people think of investing as purchasing things like common stock in a company, but there are many potential types of investments.

It’s impossible to tell in advance how a particular investment will work out. Even with the best research, it’s very likely one or more of your investments won’t work out: that’s risk.

Since no one can predict the future, markets fluctuate in an effort to establish prices for goods and services – an outcome of the Pricing Uncertainty Principle. In general, you should expect the same return that the “market” in the overall economy or industry is providing – the price the market has temporarily settled on in the face of uncertainty and change.

Speculation is prediction about how the world is going to turn out in some way, at some point. When you go to Las Vegas and play roulette, you’re speculating. When you purchase stock in an individual company with the expectation that the company will beat the market, you’re speculating.

4. Foolproof speculative systems don’t exist. Period.

If someone tries to sell you a method to grow your money through speculation, it’s a scam. If such a system existed, (1) the seller would have to possess some means of predicting the future, and (2) they’d be making so much money that they’d have absolutely no need to sell it to you.

Your long-term investment portfolio should, first and foremost, be structured in a way to minimize your risk of loss. Never speculate with funds you need to pay your day-to-day expenses or handle emergencies.

5. Speculate only with money you can afford to lose.

Speculating can certainly be fun. Without a huge element of luck, however, it’s a recipe for poor returns. For example, if you go to Las Vegas and place a huge bet on a single number on the roulette wheel, you can certainly make a lot of money fast. You can also lose that money incredibly fast – and the odds are in favor of your loss, not your gain.

The same thing goes for investing in individual companies. It’s one thing to invest your time, energy, and funds into building your own company: you have a large amount of control, and can personally make decisions to ensure the safety and growth of your capital.

That’s not true for purchasing stocks in individual companies: you have no control over their operations, the decisions of management, regulatory issues, etc. unless you’re purchasing a Warren Buffett-size stake in the company. Speculation opens you up to massive losses: losses that you may not be able to afford.

If you choose to speculate, do so consciously. Don’t rob your “permanent” investment funds to fuel your speculation.

6. Make your own decisions – never give anyone else direct control over your money.

No one cares as much about your financial situation as you do. That includes brokers, mutual and hedge fund managers, “wealth management” advisors, etc.

Remember, foolproof speculative systems don’t exist. Brokers, fund managers, and advisors are more than happy to speculate with your money, regardless of your real returns, because you’re paying them to do it.

Remember: people become wealthy by selling things, not by buying them. You’re certainly free to give a manager 2% of your savings every year to underperform the market, or pay a broker thousands of dollars in unnecessary transaction fees every year… but I don’t advise it if you want good investment returns.

Every dollar you pay someone else to manage your money is a dollar that’s not working for you. Once you account for all cases of luck, there’s no such thing as a “winning” fund manager or advisor.

7. The best approach to investing is to put your money into a “Permanent Portfolio” and keep it there.

If no one can predict the future, it pays to build your investment approach around that fact. Instead of assuming the stock market will always go up, or that a particular investment will do well over time, it pays to construct your investment portfolio so that it does as well as possible regardless of what happens in the world.

Browne’s “Permanent Portfolio” is build for resilience: it’ll preserve your capital even in the worst economic conditions, and perform as well (or better) than a 100% total stock market portfolio over the long term.

To understand how Browne’s portfolio is constructed, it helps to know a little bit of economics.

8. There are four broad economic forces: prosperity, recession, inflation, and deflation.

According to Browne, there are four major basic forces in every economy:

Prosperity is a period in which businesses are growing, customers are spending, and unemployment is falling.

Recession is a period in which businesses are shrinking, customers aren’t spending, and unemployment is rising.

Inflation is a period in which prices are rising as the purchasing power of a currency shrinks due to increased supply. (This is good for people who own real assets, but bad for people who hold cash.)

Deflation is a period in which prices decline as the purchasing power of a currency increase due to a contraction in monetary supply. (This is good for people who hold cash, but bad for people in debt.)

So, to summarize:

• Businesses will either become more successful… or they’ll become less successful.
• A currency will either become more valuable… or it’ll become less valuable.

Certainly not rocket science, right?

Remember: we can’t predict the future. We don’t know exactly what will happen, but we do know that some combination of these definitely will happen.

The Permanent Portfolio is constructed with uncertainty and change in mind. The portfolio is essentially a system of counterbalances: if businesses are doing poorly for a while, you want another asset that will do well during that time, and vice versa. If your currency is becoming less valuable over time, you’ll want an asset that becomes more valuable during that time, and vice versa.

Here’s Browne’s recommended “Permanent Portfolio” asset allocation:

• 25% Total Stock Market Index – does well in prosperity, not well in recession, inflation, and deflation
• 25% Cash – does well in deflation, preserves value in recession (for rebalancing), not well in prosperity inflation
• 25% Gold – does well during inflation, poorly during deflation
• 25% Long-Term Government Bonds – does well during deflation and prosperity, poorly during inflation and recession, with the lowest possible credit risk.

The beauty of this system is in its simplicity. These four asset classes aren’t highly correlated to each other: they move largely independently, and opposite to each other. When the stock market goes down, gold and bonds tend to go up. When gold or bonds go down, the total stock market is probably rising.

The other beautiful aspect of this system is how it avoids Loss Aversion. Humans universally hate to lose – they even hate the potential or perception of loss, however transitory that loss actually is.

Alternatively, you can think of the Permanent Portfolio as being the four major asset classes that people flee toward when things get scary. When business is good, everyone is interested in stocks. When inflation, deflation, or recession are looming, investors flee stocks into Bonds, Gold, or Cash. By owning all four asset classes, you’re covered, regardless of the whims of the market.

The Permanent Portfolio’s system of asset counterbalances is an enormous psychological help: it smooths what would typically be a jumpy 100% stock portfolio into a very manageable (dare I say boring?) steady upward climb. When most investors are up at night worrying about the stock market, Permanent Portfolio investors don’t even notice.

So how does it perform?

The largest single yearly loss the Permanent Portfolio has experienced was (-3.9%) in 1981. The compound annual growth rate from 1972-2009 was +9.7%.

When most 100% stock investors experienced a loss of (-40-60%) in 2008, the Permanent Portfolio gained +1.8%. The portfolio returned +7.8% in 2009, and +14.5% in 2010.

Those are very good numbers for an entirely passive, decision-free, low-cost investment strategy. That’s why I personally use a Permanent Portfolio allocation for 100% of my long-term investment funds.

9. Personal debt and leverage are extremely dangerous – tread cautiously.

Leverage is like rocket fuel – it can propel you to amazing heights, or explode disastrously. Leverage works both ways: it multiplies your potential for losses, as well as potential gains. When someone goes bankrupt, it’s usually because they tried to grow their net worth via leverage: borrowing money in an attempt to magnify returns.

Avoid the temptation to borrow money. Whether it’s to purchase a big house, buy new toys, or magnify your investing, borrowed money can get you into trouble, particularly if you find yourself in a cash crunch.

The best thing you can do to improve your personal financial stability is to create an “emergency fund”: 2-12 months of living expenses, which can help you weather personal crises or take advantage of unexpected opportunities.

10. When in doubt, err on the side of caution to prevent costly mistakes.

It’s easy to make poor investment decisions if you don’t understand what you’re doing. When in doubt, it pays to wait, do your research, consult an advisor, etc.

Avoiding preventable mistakes is one of the best ways to ensure your long-term financial success. I can’t count the number of times I’ve avoided disaster by listening to my gut, and choosing not to move forward with a decision that didn’t feel right for me.

If you’re still not sure of what’s going on, or don’t feel right about the choice you’re making: don’t do it.

BONUS: More Details About My Personal Investment Strategy

To supplement these notes, I’ve put together a detailed summary of how I personally invest using the Permanent Portfolio. I hope you find it useful. Read more…

 

This summary was created by Josh Kaufman, an independent business teacher and author of The Personal MBA: Master the Art of Business. To receive Josh’s notes on the best business books available and other Personal MBA blog updates, be sure to sign up for the Personal MBA newsletter – it’s absolutely free.




11/18/11--23:42: The Accidental Creative - Todd Henry (chan 1852493)

The Accidental Creative – Todd Henry

Every once in a while, I invite cool people who have written books to share their knowledge with Personal MBA readers. Todd is a very bright guy, and I think you’ll enjoy his personal notes on the key ideas in The Accidental Creative. – Josh

About Todd Henry

Todd Henry is the founder and CEO of Accidental Creative, a company that helps creative people and teams generate brilliant ideas.

Here are 10 big ideas from Todd Henry’s The Accidental Creative:

#1: We now live and work in a create on demand world.

Most workers today have to go to work each day and invent brilliant solutions that meet specific objectives by defined deadlines in order to keep their job. This creates a unique kind of pressure for creative workers because the process by which ideas are generated often seems mystical and elusive. However, there are methods that can increase the likelihood of having good ideas when they are most needed.

To deal with the create on demand dynamic, creative workers must establish practices in the areas of Focus, Relationships, Energy, Stimuli and Hours that support their creative process and keeps them engaged even when things get chaotic.

#2: Creatives should strive to be prolific, brilliant and healthy by establishing practices to support their creative process.

Many workers burn out on the altar of short-term productivity, but in today’s marketplace it’s not enough to be prolific for a short time then burn out. To sustain over the long-term, creatives should strive to be prolific (producing a good quantity of work), brilliant (producing good work) and healthy (doing it in a sustainable way). Otherwise, it’s easy to fall into the trap of systemic mediocrity or to play organizational political games rather than doing great work. Many creatives get two of these three things right, but it’s difficult to do all three. The only way to do so is to be more purposeful about the way in which they engage work.

#3: Creatives deal with a fundamental tension between possibilities and pragmatics.

While most creatives are wired to take ground, many organizations are set up to protect the ground that’s already been taken. This tension between the pursuit of the possible and the protection of already-created value can cause creatives to lose their passion for their work. This tension appears in three forms: process versus product (the tension between how the work gets done and the end product itself), rhythmic versus predictable (the tension between organizational expectations and the true dynamics of creativity) and time versus value (the tension between the value-creating role of creatives that is often de-coupled from the amount of time they put in.)

#4: Dissonance, fear and expectation escalation are forces that work against the creative process.

There are three “assassins” that affect the creative process in organizations. Dissonance is a general break between the “why” and the “what” of work. When it is rampant within an organization, creatives are forced to decipher the true expectations of the organization and it zaps creative cycles that could be used for work. Fear causes creatives to limit their engagement and the result is less-than-effective work. Expectation escalation is the result of unwarranted comparison with past work or the work of peers or other companies. It can cause creatives to give up on projects pre-maturely if they don’t appear to have the potential for huge impact.

#5: Focus is required to create effectively.

In order to generate brilliant ideas, creatives must effectively define their work. “Challenges” are short problem statements that summarize the key issues of a problem and help focus the mind on the heart of the matter. Additionally, creatives must refine their creative priorities so that their top open loops are perpetually top of mind. Utilizing Challenges and a refined list of creative priorities (the “Big 3”) will allow creatives to have a better sense of the problems they’re really trying to solve and help them recognize potential solutions as they appear in daily life.

#6: Relationships can be a source of creative insight.

Many people only have relationships as a matter of obligation or convenience. In order to create effectively and sustainably it’s important to build relationships that can reveal opportunities, blind spots and points of potential collaboration. Engaging consistently with a Circle of 4-6 like-minded creatives that’s designed to share new insights, personal projects and potential sources of information is an effective way to jump-start creative thought.

It’s also important to have a “core team” of individuals who can help with important decisions. This core team should consist of people you respect and who are willing to speak difficult truth even when it’s inconvenient to do so. This will ensure that you you have the best possible perspective on problems you are facing.

#7: Energy management is crucial to a thriving creative process.

Many creatives manage time very well, but struggle with having the energy to do their best work. A machine without energy is useless, and a creative without energy will struggle to do great work. One method of energy management is to regularly prune out new ideas and opportunities so that critical energy resources are getting to the most important work. Another important method is to make sure that you are not separating personal and work commitments, but are recognizing that every commitment in your life requires energy. By thinking seasonally about personal and work life, it’s often possible to synchronize commitments so that you are not over-extending yourself.

#8: Stimuli, or the things that come into your head, affect your capacity to do great work.

The phrase “you are what you eat” applies to your mind as well. The information and experiences creatives absorb affect their capacity to create. One effective way to ensure that creatives are eating their “mental vegetables” is to establish a study plan that incorporates mind-stretching works as well as items designed to cultivate curiosity.

Another effective strategy is to build experiences into your life that are out of the ordinary. For example, seek out opportunities to attend a lecture that runs counter to your beliefs, or visit an environment that makes you a little uncomfortable. This can be an effective way to jump the rails of your mental ruts and jog new kinds of thinking about projects.

#9: Hours should be spend effectively, not just efficiently.

Many workers tend to default to an efficiency mindset with their time, meaning cramming every spare moment with activity in order to feel productive. This kind of frantic work can actually harm our capacity to generate ideas and fake work can often be less productive than no work at all. One effective practice (that may seem inefficient) is to regularly carve out time to generate new ideas for projects. While the results may be hit-or-miss at times, brilliant new ideas resulting from this strategy can yield tremendous value to the organization and more than make up for the time spent generating them.

Another effective strategy is to utilize “Unnecessary Creating.” This means building time into your life or schedule to make something for the joy of it rather than only utilizing creative energy for pay. This practice allows for experimentation, skill development and growth in a low-risk environment and can often yield tremendous benefits in the on-demand environment as well.

#10: Cover bands don’t change the world.

A cover band is one that plays other peoples’ music. While they may fill music clubs and even make a little money in the process, it is ultimately the music that people remember. In order to create an impact it’s important to move beyond imitation and to discover the unique contribution that you have to make to life and work. This means not allowing the expectations of others or the logical tide of others in the marketplace to pull you into a life of complacency and comfort. Rather, by establishing practices to support the creative process, it becomes possible to apply time and attention to new ideas, new endeavors and opportunities for fresh expression.

The ultimate goal for creatives should be to “die empty”. This means not leaving unfulfilled ideas, dreams and projects on the table because of a lack of intentional effort.

Did you enjoy Todd’s notes? Pick up your copy of The Accidental Creative now.




11/18/11--23:42: 22 Immutable Laws of Marketing - Al Ries and Jack Trout (chan 1852493)

22 Immutable Laws of Marketing – Al Ries and Jack Trout



Marketing is the art of attracting attention and making people interested in what you have to offer. In The 22 Immutable Laws of Marketing, you’ll learn time-tested ways to make your offer stand out, even in the most competitive of markets.

Ries and Trout are masters of finding patterns in promotion – what works, and what doesn’t. The advice in The 22 Immutable Laws of Marketing is simple and straightforward: be first in the customer’s mind. If you’re not first, create a new category you can be first in. Position yourself clearly against your competition, and stay consistent with your position. Each “immutable law” is backed by several examples, making it easy to see the laws in practice.

If your offer doesn’t stand out, it won’t sell. Instead of testing everything yourself, it helps to learn what works, without making avoidable, painful, and expensive mistakes. The 22 Immutable Laws of Marketing will help ensure your marketing efforts pay off the first time.




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11/18/11--23:42: How to NOT Re-Think the MBA (chan 1852493)

How to NOT “Re-Think the MBA”

26 April 2010



I know when I talk about the ineffectiveness of MBA programs here, I’m largely preaching to the choir. However, I found it difficult to ignore a recent interview with Dr. David Garvin, a Harvard Business School professor, because of the sheer amount of plainly-visible psychological denial it contains, so watching it is a good (but somewhat painful) learning experience. (I haven’t read Dr. Garvin’s book yet – it’ll be here in a few days – but I’ll be pleasantly surprised if it’s different.) To watch the video, click here – I’ll wait.

This interview reminds me of three great quotes:

“It is difficult to get a man to understand something when his salary depends upon his not understanding it.” – Upton Sinclair

“To the man who only has a hammer, everything he encounters begins to look like a nail.” – Abraham Maslow

“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” – Buckminster Fuller

Notice how Dr. Garvin clearly dodges several straightforward questions about the effectiveness of MBA programs during the interview? There’s a reason: comprehensive research has been done about the effectiveness of MBA programs over the past several decades, and it isn’t pretty: The End of Business Schools? Less Success Than Meets the Eye. I don’t know if it’s denial or obfuscation, but a world-class researcher who’s spent years studying this topic must know the numbers, right? It’s far safer to talk about “being better corporate citizens” and the “public / private divide.”

Here’s the TLDR summary of the research: getting an MBA essentially buys you a $150,000+ interview with a large consulting firm or investment bank, since it’s used as an HR screening criteria. (And as this recent article indicates, entry-level MBA positions are usually soul-sucking and often quite scammy.) For all other purposes, it’s a waste of time and money with a massive opportunity cost – there is absolutely no difference regarding long-term compensation, hiring, promotion, or job satisfaction between MBA-holders and business professionals that don’t have a degree. None.

Truly re-thinking the MBA means questioning whether or not it’s necessary at all. Based on all available evidence (and there seems to be a quite a bit of effectiveness research that colleges are deliberately withholding), MBA programs are not necessary at all – you can learn what you need to know to start, run, and manage a business effectively by yourself or far less expensive help from subject-matter experts, in less time, without debt.

I would LOVE if business schools actually changed the way they operate, but I’m not holding my breath for Harvard or any other business school to “re-think” their approach to business education. The model is broken, both in terms of content and cost – every business professor should know that the ROI of any investment goes down as the cost goes up, right?

I’ll believe Harvard is “re-thinking” the MBA when they start (1) treating business and management / leadership as separate skills, (2) teaching a clear, general framework for building sustainable businesses and (3) giving refunds to anyone who doesn’t get at least 10x the value they invested in the program in incremental compensation within a few years of graduation. Real businesses unconditionally guarantee their products and services – if business schools actually provide a valuable service to their students, they should do the same.

Personally, I’m betting my marbles on making the existing model obsolete. What about you?




11/18/11--23:42: The Value of Apprenticeships (chan 1852493)

Back to the Future: the Value of Apprenticeships

By Josh Kaufman



“Always two there are: a master, and an apprentice.” – Yoda, Star Wars

I have an apprentice.

Meet Carlos Miceli. Carlos contacted me via e-mail a few months before the launch of The Personal MBA: Master the Art of Business. Carlos said that he’d been following the Personal MBA for a long time, and he wanted to work with me. If there was anything that he could help with, he’d be happy to chip in, no strings attached.

Carlos’ reputation preceded him. I’d been following Carlos’s blog, OwlSparks, for about a year. I knew his work, and I was impressed.

I’m a solo practitioner – my business is intentionally structured to not have employees. I prefer to spend most of my time creating new things and working with clients vs. managing a team. Communication Overhead is very disruptive in the type of work I do.

That said, I accepted Carlos’ offer, and officially took him on as my apprentice. Carlos is responsible for much of the material on http://book.personalmba.com. He is actively helping me develop new projects, and I am training him in my coaching and consulting methods. When his training is complete, Carlos will be fully capable and competent in teaching business the Personal MBA way.

I believe apprenticeships are woefully underrated. A formal apprenticeship has many benefits for both the apprentice and the master. By working together, a master and apprentice team can accomplish a lot – and learn a ton in the process.

I use the term “master” in this context very loosely. If you have a few years of hands-on experience in a field, you’ve mastered the necessary skills far more completely than someone who is just starting. Working with an apprentice is mutually beneficial – the apprentice learns and practices your methods, and you improve your craft at the same time.

Here’s a brief examination of the benefits and drawbacks of apprenticeships:

Benefits of apprenticeship for the apprentice:

• Exposure. Working with an experienced practitioner in a functioning business can give you exposure to new opportunities, skills, and people very quickly.
• Experience. The best apprenticeships require a significant amount of hands-on work, which means you’ll get a ton of direct experience in the field in a short amount of time. If you want to master a new craft, there’s no substitute for actually getting your hands dirty.
• Practice. Doing real work (instead of theoretical case studies or homework) and practicing skills repeatedly is the only way to develop expertise. Doing so under a master practitioner is the best way to practice efficiently, since the master will be able to share the benefits of their experience, as well as correct mistakes.

Benefits of apprenticeship for the master:

• Delegation. Having an extra brain and set of hands is enormously beneficial. By training your apprentice, you improve your capability to get things done. The better you train your apprentice, the more capable they are of helping you.
• Externalization. As a practitioner, much of your knowledge is implicit – you know how to do things, but you don’t consciously know how you know it, or why it’s important. In the process of teaching your apprentice, you’re also putting your own process into an external form, which can be easily examined and improved.
• Refactoring. By teaching your process and skills to an apprentice, hidden problems and inefficiencies will become very clear. That’s a wonderful thing – your apprentice can help you improve the process and systems you’re using, so you’ll get better results with less effort.

Drawbacks of apprenticeship for the apprentice:

• Time-intensive. The best apprenticeships will be very demanding. Completing an apprenticeship may require putting other priorities or projects on hold during the term of the apprenticeship.
• Low glamour. In the olden days, apprentice blacksmiths began their duties by sweeping the floor – certainly not the most interesting or fulfilling work. However, maintenance tasks are valuable and necessary – they immediately increase your master’s capacity, and they’re a good place to start learning what the day-to-day practice of a craft actually takes. (The best practitioners won’t ask their apprentice to do anything they aren’t willing to do themselves.)
• Not directly lucrative. Most apprenticeships don’t pay much in the way of wages. I’m in favor of paying apprentices enough to be able to support themselves and focus on your business full-time, but they’re not a path to wealth for the apprentice. A major part of an apprentice’s compensation is in learning and experience. The apprenticeship may lead to wealth, but it will do so indirectly, not directly.

Drawbacks of apprenticeship for the master:

• Communication Overhead. Simply by having another individual to communicate with, the master will be spending less time working and more time communicating with their apprentice. While this tradeoff is unavoidable, the drawback can be mitigated by setting an expectation with the apprentice that communication will happen in batches, to avoid the Cognitive Switching Penalty.
• Opportunity Cost. Time spent training an apprentice is time not spent directly building the business. Properly managed, your apprentice will be a benefit to your business instead of a cost, but it takes a while to get there. The first few months of working with an apprentice should be viewed as an investment in future returns.
• Up-front Investment. One of the best ways to handicap your apprentice’s performance is to avoid giving them the tools they need to perform. Ideally, you’ll need to provide the same tools you use on a daily basis. View this as an investment, not a cost.
• Risk. If your apprentice screws something up, your business and reputation is on the line. Much of this risk can be avoided by choosing your apprentice carefully, and by carrying Errors & Omissions / Professional Liability insurance, just in case.

Experimenting with Apprenticeship

If you’re just getting started, finding an experienced practitioner and arranging an apprenticeship can be a great career move. You’ll learn a lot about what a new business looks like from the inside, watch a functioning business at work, and immediately start doing work that makes a difference.

Charlie Hoehn wrote about this a few years ago in an e-book titled Recession-Proof Graduate. By contacting a practitioner you want to work with and offering to do something for free, you can get your foot in the door doing work others only dream about – a classic Risk Reversal strategy. (Charlie is now Tim Ferriss’ right-hand man – a gig he landed using this strategy.)

If you’re an experienced professional, taking on an apprentice is a great way to hone your own skills and tune up your entire business system. By teaching what you do to someone else, you’ll inevitably find ways to improve your own craft. Done well, these benefits will improve the results you’ll deliver, both immediately and in the future.




11/18/11--23:42: Victory Through Clarity (chan 1852493)

Victory Through Clarity

“Recipes tell you nothing. Learning techniques is the key.” — Tom Colicchio, chef

I firmly believe in the benefits of bulk positive randomness. By being exposed to many random influences, you inevitably find resources directly related to your interests.

Today, this article by Garry Kasparov popped up in my feed reader: The Bobby Fisher Defense. It’s worth a read.

Chess has little to do with the practice of business, but there’s a great deal of overlap in thinking objectively, managing internal states, reading the opponent correctly, and updating your strategy as the environment changes.

Here’s the part of Kasparov’s essay that jumped out at me:

In his play, Fischer was amazingly objective, long before computers stripped away so many of the dogmas and assumptions humans have used to navigate the game for centuries. Positions that had been long considered inferior were revitalized by Fischer’s ability to look at everything afresh… Fischer’s modern interpretation of “victory through clarity” was a revelation.

Victory through clarity. Now there’s a phrase worth remembering.

How to Achieve Victory Through Clarity

“Victory Through Clarity” describes the focus of my work. As you’ve probably noticed, I don’t write posts like this:

• 17 hot new startup trends
• How to write a killer resume that gets you a job – fast!
• How to raise a gazillion dollars of Venture Capital
• Do you have a low business IQ?
• Why being like Madonna is secret of business success

Tactics are useful… but only to a point. Learning how to think like a successful businessperson is how you select the useful tactics.

Do you ever wonder how successful business leaders consistently make good decisions? There are no magic businesspeople – they’ve simply internalized a set of mental models that accurately reflects how the world really works. They achieve victory through clarity.

That’s why…

• It’s better to know why certain businesses are attractive, so you can take advantage of opportunities before they become trends.
• It’s better to understand what employers are looking for when hiring an employee, so you can emphasize your Economically Valuable Skills.
• It’s useful to know how to raise money, but it’s important to understand whether or not raising money is absolutely necessary.
• It’s beneficial to deeply understand how the human mind works, so you can consistently present your suggestions in a brain-friendly way.
• It’s worthwhile studying what sorts of things attract attention, so you can build your business to take full advantage of those things.

Business is actually an applied subset of a much larger subject: human rationality. The more accurate information you have about the world, the more clearly you think, and the better you manage your internal state, the better you’ll ultimately do.

The objective of the Personal MBA is to help you achieve victory through clarity – to help you fully understand how the business world actually works.

That’s why we focus on principles, not tactics.




11/18/11--23:42: Value-Based Fees - Alan Weiss (chan 1852493)

Value-Based Fees – Alan Weiss



Pricing is a sensitive issue for almost every businessperson – it’s difficult to put a value on what you do, and people naturally tend to consistently under-price their services to avoid the fear of rejection. Value-Based Fees will show you how to frame your offer against the value you provide, which will allow you to support a higher price your customers will be happy to pay.

This book is ostensibly about consulting, but the core idea is applicable to all businesses. Weiss, who is also the author of Getting Started in Consulting_, is a master consultant with decades of experience in pitching large projects – and asking for very large fees. In _Value-Based Fees, Weiss walks you though the process of establishing what your offer is worth to the customer, then using that estimate of value to support an asking price that’s a mere percentage of that value. When your prospects fully understand the value you provide, they won’t blink at your asking price.

Every business must reach financial sufficiency to survive and thrive. Value-Based Fees will help you charge the prices you deserve, making it far easier to reap the rewards of doing valuable work.




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11/18/11--23:42: The Craftsman's Creed - Are You a Craftsman? (chan 1852493)

The Craftsman’s Creed – Are You a Craftsman?



Update: prints of “The Craftsman’s Creed” are now available.

I’ve been thinking a lot about identity recently. Who we think we are, and how we think we fit into the world has a massive impact on how we behave. Clanning and Convergence / Divergence are two of the greatest influences on our behavior, whether we realize it or not.

One of the reasons people perceive credentials as valuable is that they impart a sense of identity: “who I am.” Notice how people who have attended top business schools describe themselves: “I’m a Harvard MBA” or “I’m a Stanford MBA.” It’s not a statement of skill – it’s a statement of identity. Getting the certificate is a confirmation of group identity, which has a powerful influence on behavior. Enroll in business school, and you “become” an MBA.

The Personal MBA has, thus far, lacked that strong sense of identity. No one (including me) says “I’m a Personal MBA-er” or even “self-educator.” It’s a statement too broad to be of much use in shaping behavior, which is a major detriment. Identity is a useful tool – one we don’t have quite yet.

After thinking about our identity – what makes us unique – I found an answer. As it turns out, self-education is not who we are; it’s what we do in the pursuit of something far more important. It’s a means to an end, not an end itself.

We are Craftsmen

If you really grok what the Personal MBA is about, you know it’s not really about what most businesspeople say they want: getting more money, getting promoted, becoming famous, etc. Sure, studying business can lead to these things, but that’s not really why we do it. Our studies are about something deeper: the joy of developing yourself and mastering new skills that you can use to live a productive and satisfying life. Perfecting the art, and improving the quality of your life as you pursue it, in an end in itself. In short, we’re craftsmen.

Our crafts may be very different – programming, engineering, design, marketing, sales, financial analysis, systems design, writing, manufacture, or teaching. Even so, we’re all on the same path: doing everything we can to perfect our craft, using every tool at our disposal. We are craftsmen.

I put together a statement of my personal philosophy, to better define for myself what I’m after. It ended up being a very clear statement of what craftsmanship is all about, so I’d like to share it with you.

If I were ever to be on NPR’s “This I Believe”, this is what I’d say.

---

The Craftsman’s Creed

I am a craftsman. I am dedicated to perfecting the art and science of my craft, which I have chosen freely.

I am constantly, relentlessly searching for ways to improve my craft. I am dedicated to learning from the masters who have preceded me in every way I am able.

I create valuable things that other people want or need. I generously offer my work as a gift when it is wise, but my purpose is to help those who value my work enough to pay for what I have to offer. No one has an unlimited claim on my craft, knowledge, or the fruits of my effort. I work for people who value and support me.

I honestly promote what I have to offer, consistently and to the limit of my capabilities. I make no apologies for promoting my craft. I am proud of my work, and it is my duty and responsibility to reach people who may benefit from my craft. I can help them no other way.

I do my best to ensure that every single person who trusts me with their time, attention, or money is happy with their investment. If they are not, I will do whatever is in my power to do right by them without delay.

Skills are a craftsman’s credentials. I care more about a person’s character, what they know, and what they can do than where they grew up, where they went to school, or how many letters they have after their name. I choose to work with other craftsmen: people who are skilled, not simply schooled.

I respect other craftsmen, and I generously assist them however I’m able. I have no respect for the fool who searches for a way to enjoy the fruits of labor without effort, or the scoundrel who seeks to enrich himself by deluding others. Value, not wealth or fame, is the true measure of every craftsman.

I take good care of myself. My mind and body are the tools I use to advance my craft, so I take care of them. Rest and recovery are essential to my life: a worn-down tool is of no use at all.

I never stop pushing my limits. I am constantly testing and experimenting with new ways to expand my capabilities. It is my way of life.

I refuse to waste precious time and energy on trivial matters, trivial problems, and trivial people. I choose to focus only on the most important of demands: those that help me advance my craft or take care of the people who depend on me.

The world is an uncertain place, which I can not fully predict or control. Regardless, I will do everything in my power to prepare for every challenge and weather every storm. Nothing in this world is powerful enough to stop me from continuing to practice my craft.

Anything that I can do to improve my craft, I will do. This will keep me busy until the end of my days: a challenge I gladly accept. I am a craftsman, and always shall be.

---

Are you a Craftsman?

If so, you’re in good company – the Personal MBA is one of the largest gatherings of craftsmen from all disciplines on the web.

I think it’s a wonderful thing to be a craftsman, and I’m happy to be on this journey with you. My craft is teaching business, and I’m going to do everything I can to help you learn the skills you need to perfect your craft, whatever it might be. I wrote my book just for you, and I’m looking forward to walking this path with you in the years and decades to come.

If you’re not a Craftsman – if your goal is to amass some type of hedonistic pleasure using every shortcut available to you, you’re in the wrong place – you won’t find what you seek here. Best of luck to you.

Here’s to the future: the perfection of our craft.




11/18/11--23:42: Permanent Portfolio Investing Strategy (chan 1852493)

Permanent Portfolio Investing Strategy

by Josh Kaufman

“The key to success for everything in business, science and technology is never to follow the others.” – Masaru Ibuka, co-founder of Sony

There’s a lot of FUD (fear, uncertainty, and doubt) going around concerning investing and the financial markets right now. Instead of panicking, it’s important to take this opportunity to re-evaluate your current long-term investment strategy to find ways to improve.

In that spirit, I’m going to share with you how I personally manage my long-term investment funds. You certainly don’t have to do what I do, but I’ve put a lot of effort and research into my preferred strategy, which includes many features explicitly designed to make long-term investing psychologically easier. I hope you find it useful.

This should be obvious, but laws vary around the world and change month-to-month, so I want to make sure there’s absolutely no misunderstanding before I begin.

Here’s the short summary: I’m providing information about how I personally choose to invest my money. What you choose to do with this information is completely up to you, and the consequences of your choices are 100% your sole responsibility.

I’m not a lawyer, accountant, registered financial advisor, broker, or securities dealer. I don’t even play one on TV. This post is for informational purposes only and does not constitute an offer or solicitation to buy or sell any security discussed herein or in any jurisdiction where such would be prohibited. (That’s for my SEC attorney readers.)

All investments contain elements of risk. You should understand what these risks are before buying any investment. Past performance is no guarantee of future results. Any opinions, news, research, analyses, prices, or other information contained in this post is provided as general market commentary, and does not constitute investment advice. (That’s common sense.)

Now that we’re clear, let’s get started…

Preferred Account: SEP-IRA

Since I’m self-employed, I manage my own long-term investment / retirement funds. The account I use to do this is a SEP-IRA, which stands for “Simplified Employee Pension Individual Retirement Account.”

I always contribute the maximum I’m able to contribute to my SEP each tax year. Under US Tax rules as I write this, I can contribute up to 20% of my income before my self-employment tax deduction, up to a maximum of $49,000. The contributions I make are deducted from my taxable income, which is good, since that means I have more capital in my account that can grow for decades. When I begin taking the money out later (after I turn 59 1/2), it’ll be taxed as normal income.

Preferred Strategy: Harry Browne’s “Permanent Portfolio”

I use a Permanent Portfolio allocation for 100% of my long-term investment dollars. This allocation, which is unique in many ways, is described in Harry Browne’s Fail-Safe Investing.

Here’s the asset allocation:

• 25% Total Stock Market Index – via the Vanguard Total Stock Market ETF (Ticker: VTI)
• 25% Long-Term Government Bonds – via the iShares Barclays 20+ Year US Treasury Bond ETF (Ticker: TLT)
• 25% Gold – via Central Gold-Trust, which holds gold bullion (Ticker: GTU)
• 25% Cash – via the iShares Lehman 1-3 Year US Treasury Bond ETF (Ticker: SHY)

There are several reasons I prefer a Permanent Portfolio allocation:

1. The Permanent Portfolio requires zero prediction.

No one can predict the future. Period. Promises to predict the future are endemic in investing, and result in large losses and poor investment decisions.

The Permanent Portfolio asset allocation doesn’t try to predict anything – it simply recognizes that financial markets will continue to change. Some asset classes will do well, and others will do poorly.

Instead of attempting to predict which asset classes will outperform, it holds four negatively correlated basic asset types, which counterbalance each other. On the whole, the portfolio grows as well as (or better than) the total stock market, without huge swings in volatility, which are psychologically challenging to handle. (See #3.)

2. The Permanent Portfolio performs extremely well.

The compound annual growth rate from 1972-2008 was +9.7%. The portfolio returned +7.8% in 2009, and +14.5% in 2010.

Here’s a graph of the past ten years of Permanent Portfolio returns, compared to an S&P 500 Index, including dividends:



That’s a better return without the volatility – note the two 30%+ nosedives the S&P 500 index has taken over the past ten years. That’s not a recipe for sleeping well at night. There’s no guarantee the market won’t do that as you’re preparing to retire, either.

The Permanent Portfolio was largely unaffected, and in some cases grew, as the stock market was declining. That’s very cool.

3. The Permanent Portfolio largely eliminates Loss Aversion.

Humans universally hate to lose – they even hate the potential or perception of loss, however transitory that loss actually is. This phenomenon is called Loss Aversion, and it explains why people “buy high, and sell low” instead of the reverse.

You can think of the Permanent Portfolio as being the four major asset classes that people either excitedly acquire when times are good or flee to when things get scary. When business is good, everyone is enthusiastic about stocks. When inflation, deflation, or recession are looming, investors flee stocks into Bonds, Gold, or Cash. By owning all four asset classes, your returns are stable, regardless of the whims of the market.

When most 100% stock investors experienced a loss of (-40-60%) in 2008, the Permanent Portfolio gained +1.8%. The largest single yearly loss the Permanent Portfolio has experienced was (-3.9%) in 1981.

I’ll take market returns without the market volatility any day: it frees my time and attention for more important (and rewarding) matters, like building my business.

4. The Permanent Portfolio is very, very inexpensive.

You’ll note that all four asset classes are available as low-cost ETFs, which stands for “Exchange Traded Fund”. These are automated funds that are run using strict rules about what they contain.

Since these funds are managed by computers automatically, I don’t have to pay a wealth management advisor 2-3% of my assets every year to perform worse than the market. Instead, I pay an absurdly low fee (like 0.06% for VTI) to get better results.

In addition, there are only four assets to rebalance, so my transaction fees are extremely low as well: no active trading is required.

5. The Permanent Portfolio doesn’t rely on human decision-making.

The Permanent Portfolio is designed as a system that largely eliminates decision-making. The only actions required are: (1) depositing money into the account, (2) allocating the funds in the 25% chunks described above, and (3) rebalancing the portfolio to when any one of these assets make up 30-35% of the portfolio, restoring the initial 25% allocations.

The systematic nature of the portfolio means I don’t have to make decisions on what to invest in, when to invest, or try to predict future prices. I simply run the system. And I can do all of these things by myself, instead of paying someone to do it for me.

5. The Permanent Portfolio can be fully automated.

I recently transferred my account to a firm called FolioInvesting.com. I switched for a simple reason: to my knowledge, Folio Investing is the only online brokerage that has extremely robust automation and rebalancing features. (I’m not associated with the company in any way, aside from having an account.)

When you open an account, Folio Investing allows you to create “Folios” with specific asset allocations. I only have one folio, which is set up using the Permanent Portfolio allocation described above.

Every month, all it takes to rebalance the portfolio is a single operation: clicking the “rebalance” button. The platform takes care of the rest. You can even set the system to rebalance regularly, on a schedule you specify.

This is a brilliant use of Guiding Structure. By automating the system, I don’t have to risk Willpower Depletion and prediction-related discomfort when rebalancing, the way I would by selling a high-performing asset to purchase a low-performing asset. I’ve decided what I want to do in advance, so the platform lets me do it automatically.

The automation features remove Friction from my investing process. I can deposit money automatically, allocate money automatically, and rebalance automatically.

All of these things remove barriers to successful long-term investing, making it much more likely I’ll do well over the long term.

There you have it: a simple, inexpensive, easy, systematized, automated way to reap the rewards of long-term investing. I hope you find it useful.

For more details about this strategy, check out Fail-Safe Investing by Harry Browne. You should also check out CrawlingRoad.com, which actively tracks the Permanent Portfolio.

This post was created by Josh Kaufman, an independent business teacher and author of The Personal MBA: Master the Art of Business. To receive Josh’s notes on the best business books available and other Personal MBA blog updates, be sure to sign up for the Personal MBA newsletter – it’s absolutely free.