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SHRED (People (Leadership (Level 5 leadership (Create intrapreneurs, Art…

- - - - Create intrapreneurs
      - Art of delegation
      - People can run the business like it is their own
      - CEO --> Chief Enabling Officer
- - - - Level 5 Leadership, Level 5 Ambition
        
        Professional Will
        
        Creates superb results, a clear catalyst om the transition from good to great
        
        Demonstrates an unwavering resolve to do whatever must be done to produce the best longterm results, no matter how difficult
        
        Sets the standard of building an enduring great company; will settle for nothing less
        
        Looks in the mirror, not out the window, to apportion responsibility for poor results, never blaming other people, external factors, or bad luck
        
        Personal Humility
        
        Acts with quiet, calm determination; relies principally on inspired standards, not inspiring charisma, to motivate
        
        Channels ambition into the company, not the self; sets up successors for even greater success in the next generation
        
        Looks out the window, not in the mirror, to apportion credit for the succes of the company - to other people, external factors, and good luck
        
        Demonstrates a compelling modesty, shunning public adulation; never boastful
      - First Who, Then What
        
        Opposite
        
        A genius with a thousand helpers
        
        Then What
        
        'Who' questions come before 'What' decisions
        
        Before vision
        
        Before organization structure
        
        Before tactics
        
        Before strategy
        
        Once you have the right people in place, figure out the best path to greatness
        
        First Who
        
        Be Rigorous, Not Ruthless
        
        Ruthless
        
        Job cutting in difficult times
        
        Firing people without thoughtful consideration
        
        Rigorous
        
        Means best people don't need to worry about their positions
        
        Practices
        
        When in doubt, don't hire - keep looking (corollary: A company should limit its growth based on tis ability to attract enough right people)
        
        When you know you need to make a people change, act (corollary: First be sure you don't simply have someone in the wrong seat)
        
        Put your best people on your biggest opportunities, not biggest problems (corollary: If you sell off tour problems, don't sell off your best people)
        
        Get the right people on the bus
        
        Less focus on -
        
        Specific educational background
        
        Practical skills
        
        Specialized knowledge
        
        Work experience
        
        Greater focus character
        
        Work ethic
        
        Basic intelligence
        
        Dedication to fulfilling commitments
        
        Values
        
        Build a level 5 executive team
        
        Executives who argue and debate about a decision
        
        Unify fully behind a decision regardless of parochial interests
    - - The Hedgehog Concept
        
        Be a hedgehog, not a fox
        
        Hedgehog
        
        Three Circles
        
        Where are we deeply passionate about?
        
        Example SHRED
        
        1 more item...
        
        Core values and core ideology
        
        1 more item...
        
        What drives our economic engine?
        
        Profit per customer
        
        What can we be best in world at? (and, equally important, what cann't we be best at the world at)
        
        Example SHRED
        
        1 more item...
        
        It is an understanding, not a goal
        
        Simplify a complex world into a single organizing idea
        
        Counsel
        
        Process
        
        Ask questions, guided by the three circles
        
        Dialogue and debate, guided by the three circles
        
        Executive decisions, guided by the three circles
        
        Autopsies and analysis, guided by the three circles
        
        Repeat
        
        Characteristics
        
        The council exists as a device to gain understanding about important issues facing the organization
        
        The council is assembled and used by leading executives and usually consists of five to twelve people
        
        Each council member gas the ability to ague and debate in search of understanding, not from the egoistic need to win a point or protect a parochial interest
        
        Each council member retains the respect of every council member, without exception
        
        Council members come from a range of perspectives, but each member has deep knowledge about some aspect of the organization and/or the environment in which it operates
        
        The council includes key members of the management team but is not limited to members of the management team, nor is every executive automatically a member
        
        The council is a standing body, not an ad hoc committee assembled for a specific project
        
        The council meets periodically, as much as once a week or as infrequently as once a quarter
        
        The council does not seek consensus, recognizing that consensus decisions are often at odds with intelligent decisions. The responsibility dor the final decision remains with the leading executive
        
        The council is an informal body, not listed on any formal organizational chart or in any formal documents
        
        The council can have a range of possible names
        
        Fox
        
        Pursue many ends at the same time
        
        See world in all its complexity
        
        No overall concept or unifying vision
      - Confront Brutal Facts
        
        Create a climate where the truth is heard
        
        Lead with questions, not answers
        
        Engage in dialogue and debate, not coercion
        
        Conduct autopsies, without blame
        
        Build 'red flag' mechanisms that turn information into information that cannot be ignored
        
        The Stockdale Paradox
        
        Retain faith that you will prevail in the end, regardless of the difficulties AND
        
        Confront the most brutal facts of your current reality, whatever they might be
        
        Charisma can be a liability
        
        Create systems where brutal facts are always heard
        
        Continually refine the path to greatness with the brutal facts of reality
    - - Flywheel
        
        Tremendous power exists in the fact of continued improvement and the delivery of results
        
        Effect
        
        Steps forward, consistent with the Hedgehog Concept
        
        Accumulation of visible results
        
        People line up. energized by results
        
        Flywheel builds momentum
        
        Signs
        
        Follow a pattern of buildup leading to breakthrough
        
        Reach breakthrough by an accumulation of steps, one after the other, turn by turn of the flywheel; feels like an organic evolutionary process
        
        Confront brutal facts to see clearly what steps MUST be taken to build momentum
        
        Attain CONSISTENCY with a clear Hedgehog Concept, resolutely staying within the three circles
        
        Follow the pattern of disciplined people, disciplined thought, disciplined action
        
        Harness appropriate technologies to your Hedgehog Concept, to accelerate momentum
        
        Make major acquisitions AFTER breakthrough (if at all) to accelerate momentum
        
        Spend little energy trying to motivate or align people the momentum of the wheel is infectious
        
        Let results do most of the talking
        
        maintain consistency over time; each generation builds on the work of precious generations; the flywheel continues to build momentum
      - The Doom Loop
        
        Effect
        
        Disappointing results
        
        Reaction, without understanding
        
        New Direction, program, leader, event, fad, or acquisition
        
        No buildup; No accumulated momentum
        
        Signs
        
        Skip buildup and jump right to breakthrough
        
        Implement big programs, radical change efforts, dramatic revolutions; chronic restructuring - always looking for a miracle moment or new savior
        
        Embrace fads and engage in management hoopla, rather than confront the brutal facts
        
        Demonstrate chronic INCONSISTENCY - lurching back and forth and straying far outside the three circles
        
        Jump right into action, without disciplined thought and without first getting the right people on the bus.
        
        Run about like Chicken Little in reaction to technology change, fearful of being left behind
        
        Make major acquisitions BEFORE breakthrough, in a doomed attempt to create momentum
        
        Spend a lot of energy trying to align and motivate people, rallying them around new visions
        
        Sell the future, to compensate for lack of results
        
        Demonstrate inconsistency over time; each new leader brings a radical new path; the flywheel grinds to a halt. and the doom loops begins anew
    - - Technology Accelerators
        
        Technology is an accelerator of momentum. Not the creator of it
        
        Does technology fit with Hedgehog Concept?
        
        Yes, Become pioneer in the application of that technology
        
        No, then settle for parity or ignore it entirely
      - Culture of Discipline
        
        High culture of discipline + High ethic of entrepreneurship = Great organisation
        
        Build a culture around the idea of freedom and responsibility, within a framework
        
        Fill the culture with self-disciplined people who are willing to go to extreme lengths to fulfill their responsibilities
        
        Don't confuse a culture of discipline with a tyrannical disciplinarian
        
        Consistency with Hedgehog Concept, start a "stop doing list"
  - - - Purpose AND Profitability
      - Empirical validation AND Bold moves
      - Disciplined AND Creative
      - Prudence AND BHAG's
      - Paranoid AND Courageous
      - Ferociously ambitious AND Not egocentric
      - No excuses AND able to hold back
      - On a 20 Mile March AND Fire bullets, than cannonballs
      - Threshold innovation AND one fad behind
      - Cannot predict the future AND Prepared for what they cannot predict
      - Zoom out AND Zoom in
      - Consistency AND Change
      - Self-determination AND Security
    - - Stock options program
      - Performance checks with values and purpose
      - Own language
      - Hire slowly, fire quickly
      - People have to feel part of a special group
      - Make it the SHRED way
      - Making affirmations
      - High secrecy
    - - Level 5 Leadership
        
        Clock Building, Not Time Telling
        
        Level 5 leaders build a company that can tick along without them, rather than feeding their egos by becoming indispensable
        
        Genius of AND
        
        Personal humility AND professional will
        
        Core Ideology
        
        Level 5 leaders are ambitious for the company and what it stands for; they have a sense of purpose betond their own success
        
        Perserve the Core/Stimulate Progress
        
        Level 5 leaders are relentless in stimulating progress toward tangible results and achievements, even if it means firing their own brothers
      - First Who, Than What
        
        Clock Building, Not Time Telling
        
        Practicing "first who" is clock building; practicing 'first what' is time telling
        
        Genius of AND
        
        Get the right people on the bus AND the wrong people of the bus
        
        Core Ideology
        
        Practicing "first who" means selecting people more on their fit with core values and purpose than on their skills and knowledge
        
        Perserve the Core/Stimulate Progress
        
        Practicing "first who" means a bias for promoting from within, which reinforces the core values
      - Confront Brutal Facts
        
        Clock Building, Not Time Telling
        
        Creating a climate where the truth is heard is clock building, especially if you create red flag mechanisms
        
        Genius of AND
        
        Confront the brutal facts of your current reality AND retain unwavering faith that you will prevail in the end - the Stockdale Paradox
        
        Core Ideology
        
        Confronting the brutal facts clarifies the values an organization truly holds as CORE versus those that it would like to hold as core
        
        Perserve the Core/Stimulate Progress
        
        Brutal facts clarify what must be done to stimulate progress
      - Hedgehog Concept
        
        Clock Building, Not Time Telling
        
        The Council mechanism is consummate clock building
        
        Genius of AND
        
        Deep understanding AND incredible simplicity
        
        Core Ideology
        
        The "what you are passionate about" circle overlaps nicely with core values and purpose. Only those values about which you are so passionate that you would never, under any conditions, give them up qualify as truly CORE
        
        Perserve the Core/Stimulate Progress
        
        Good BHAGs flow from understanding; bad BHAGs flow from bravado. Great BHAGs sit right smack ub the middle of the three circles
      - Culture Of Discipline
        
        Clock Building, Not Time Telling
        
        Operating through sheer force of personality as a disciplinarian is time telling; building an enduring culture of discipline is clock building
        
        Genius of AND
        
        Freedom AND responsibility
        
        Core Ideology
        
        A culture of discipline ejects those who do not share the values and standards of an organization
        
        Perserve the Core/Stimulate Progress
        
        When you have a culture of discipline, you can give people more freedom to experiment and find their own best path to results
      - Technology Accelerators
        
        Clock Building, Not Time Telling
        
        Technology accelerators are a key part of the clock
        
        Genius of AND
        
        Shun technology fads AND pioneer the application of technology
        
        Core Ideology
        
        In a great company, technology is subservient to core values, not the other way around
        
        Perserve the Core/Stimulate Progress
        
        The right technologies accelerate momentum in the flywheel, toward the achievement of BHAGs
      - Flywheel, Not Doom Loop
        
        Clock Building, Not Time Telling
        
        The flywheel creates the sustained building of momentum, and does not depend on the presence of a charismatic visionary to motivate people
        
        Genius of AND
        
        Evolutionary, incremental process AND revolutionary, dramatic results
        
        Core Ideology
        
        The doom loop makes it almost impossible to instill core values and purpose, as people chronically wonder, "who are we? what do we stand for?"
        
        Perserve the Core/Stimulate Progress
        
        The smooth consistency of the flywheel and the cumulative building of momentum to a point of breakthrough create the perfect conditions for instilling core values while stimulating change and progress
  - - - Protect The Downside
      - Leading Above The Death Line
        
        Build Cash Reserves And Buffers
        
        3 to 10 times the ratio of cash to assets
        
        What If, What If, What If
        
        Manage what to do before the storm comes
        
        Bound Risk
        
        How much time before my risk profile changes?
        
        Types Of Risks
        
        Death Line Risk
        
        Can kill or severely damage the enterprise
        
        Asymmetric Risk
        
        Downside dwarfs the upside
        
        Uncontrollable Risk
        
        Cannot be controlled or managed
        
        Zoom Out, Then Zoom In
        
        Zoom Out
        
        Sense a change in conditions
        
        Asses the time frame
        
        How much time before the risk profile changes?
        
        Assess with rigor
        
        Do the new conditions call for disrupting plans? If so, how?
        
        Zoom In
        
        Focus on supreme execution of plans and objectives
    - - Do the same things you are doing well, and do it over and over again
      - Specific, Methodical, and Consistent
        
        Specificity and Durability
      - Empirical Creativity, Fanatic Discipline, and Productive Paranoia combined
      - Questions to ask
        
        Make a list of successes the enterprise has achieved
        
        Make a list of disappointments the enterprise has experienced
        
        What SPECIFIC practices correlate with the successes but not the disappointments?
        
        What SPECIFIC practices correlate with the disappointments but not the successes?
        
        Which of these practices can last perhaps ten to thirty years and apply across a wide range of circumstances?
        
        WHY do these specific practices work?
        
        Based ont the above, what SMaC recipe, consisting of 8 to 12 points that reinforce each other as a coherent system, best drive the results?
    - - 10X'ers
        
        Didn't get more good luck
        
        Didn't get less bad luck
        
        Didn't get their good luck earlier
        
        Can't be explained by a single giant-luck spike
      - Not 'Are we lucky?' but 'Do we get a high return on luck?'
      - It is far better to be great than lucky
      - Who is our best luck?
        
        People are disciplined fanatics
        
        People are empirical
        
        People are creative
        
        People are productively paranoid
        
        People lead
        
        People build teams
        
        People build organizations
      - Can bad luck makes us stronger?
    - - Consistency of action
        
        Consistency with values
        
        Consistency with long-term goals
        
        Consistency with performance strandards
        
        Consistency of method
        
        Consistency over time
      - Self-discipline
      - Be a nonconformists
      - 20 Mile March
        
        The discomfort of unwavering commitment to high performance in difficult conditions
        
        The discomfort of holding back in good conditions
        
        Characteristics
        
        Clear performance markers
        
        Self-imposed constraints
        
        Appropriate to the specific enterprise
        
        Largely within the company's control to achieve
        
        A proper timeframe
        
        Imposed by the company upon itself
        
        Achieved with high consistency
    - - Fire Bullets, Then Cannonballs
        
        Good Bullet
        
        Low-risk
        
        Low-distraction
        
        Low-cost
        
        Cannonballs
        
        Calibrated
        
        Calibrated has empirical validation that the big bet will prove succesful
        
        Uncalibrated
        
        Big bet, without empirical validation
  - - - Quote: "Eighty percent of success is showing up" - Woody Allen
      - Starts with insistence on informality
        
        Honor with all sorts of positive reinforcement any valuable, completed action
        
        Seek out a high volume of opportunities for good news swapping
      - Chunking
        
        Getting one's arme around almost any practical problem and knocking it off
      - Task forces
        
        5 till 10 people
        
        Volunteers
        
        Limited duration
        
        Set owns goals
        
        Informal, almost no paperwork
        
        "Task forces around here are not in the business of producing paper. They are in the business of producing solutions."
      - Experiments
        
        Excellent companies have a willingness to try thinks out
        
        No metric is untested
        
        Can we experiment with this idea at low cost?
        
        Doing above thinking
        
        Action above planning
    - - Stay close to the REVENUE GENERATING customer
      - The sales really begins after the sale
      - See company as a service business, overspend on it
      - Quality obsession
        
        Quality
        
        Reliability
        
        Philosophy "Growth is not our principal goal. Our goal is to be a quality organization and do a quality job, which means that we will be proud of our work and our products for the year to come. As we achieve quality, growth comes as a result"
        
        Sacrifice unproven technology for something that works. Second to the marketplace and proud of it
      - Nichemanship
        
        Astute technology manipulation
        
        pricing skill
        
        Better segmenting
        
        A problem-solving orientation
        
        Willingness to spend in order to discriminate
      - Listening to the users
        
        "If we cant find an interested customer to work with us early on, than the idea is sure to be a loser"
    - - Keep departments small
        
        Small firms produce 24 times more innovation per research and development dollar than large firms
        
        Suboptimal divisions
        
        Internal competition
        
        Multiple departments on same problem
      - The Campion
        
        Champion must be a volunteer
        
        Characteristics
        
        Obnoxious
        
        Impatient
        
        Little bit egotistic
        
        Irrational
      - Champion systems
        
        Innovation is a numbers game
        
        Succesration 20:1
        
        This is way it is better to be number to with innovation
        
        Make support systems for champions
        
        Systems of positive reinforcement
        
        Bet on the champion, not on the idea
        
        Intense communication
        
        Communication systems are informal
        
        Communication intensity is extraordinary
        
        Communication is given physical supports
        
        Forcing devices
        
        The intense, informal communication system acts as a remarkably tight control system
    - - Give people control over their destinies; they make meaning for people
      - Treat them as adults, partners
      - Obsession on training and self-improvement
      - With management: less is more
      - Really see themselves as extended family
    - - The purpose must keep the business exiting
      - "You cant accomplish anything unless you have some fun"
    - - Divisions per:
        
        Product
        
        Geography
        
        Function
      - Division building block structure
        
        Extraordinary divisional integrity. All the main functions, including product development, finance and personnel, are in each division
        
        Constant hiving off of new division and rewards for so doing
        
        A set of guidelines that describes when a new product or product line automatically becomes an independent division
        
        Shifting people and products lines among divisions on a regular basis
    - - We are self-centered
        
        Suckers for a bit of praise
        
        We see ourself as winners
      - Our imaginative, symbolic right brain is at least as important as our rational, deductive left
        
        Right -> Does it feel right?
        
        Left -> Does it add up, Can I prove it?
      - Keep thinks simple, experience is an excellent teacher
      - We are creatures from our environment
        
        Very sensitive and responsive to external rewards and punishment
        
        Positive reinforcement
        
        Causes behavioral change, usually in the intended directions
        
        Negative reinforcement
        
        Causes behavioral change to, but often in strange, unpredictable, and undesirable ways
        
        Very strongly driven from within, self-motivated
      - We act as if express beliefs are important, yet action speaks louder than words
        
        Foot-in-the-door research
        
        Let people act in the way you want them to, even in small ways
        
        People will come to believe in what they are doing
      - We desperatety need meaning in our lives
        
        We will sacrifice a great deal to institutions that will provide meaning for us
        
        We also need independence, to feel as through we are in charge of our destinies and have the ability to stick out
        
        Paradox: Self-determination and security
      - Only focus on a few key business values and key objectives
        
        Consequence is short-term memory overload
- - - - Instagram
        
        Shoutouts
        
        Building relationships
        
        Engagement pods
      - Facebook
        
        Ads
        
        Building relationships
      - Youtube
        
        Ads
        
        Building relationships
      - Email
        
        Automatic email system
    - - UpViral
      - ConnectAudience
      - ConnectExplore
      - ConnectLeads
      - ConnectRetarget
      - Prijzen, Give Aways
    - - The Tipping Point
        
        Connectors -> Influencers
        
        Mavens --> advanced wakeboarders
        
        Salesmen --> tools, referral system
      - Contagious
        
        S - Social Currency
        
        T - Triggers
        
        E - Emotion
        
        P - Public
        
        P - Practical Value
        
        S - Stories
      - Made to Stick
        
        S - Simple
        
        U - Unexpected
        
        C- Concrete
        
        C - Credible
        
        E - Emotional
        
        S - Stories
  - - - Snowboarders
        
        Target via Facebook adds
      - Surfers
        
        Target via Facebook adds
      - Skaters
        
        Target via Facebook adds
      - Kitesurfers
        
        Target via Facebook adds
      - (Adventurous) Amsterdammer
        
        Target via Facebook adds
        
        Guerilla maketing with wakeboarding through cannels
      - Referral system
        
        Built in reservation system
        
        Friends bring friends for free testday
    - - Wakeboarders in Amsterdam
        
        Target via Facebook adds
      - Social influencers
        
        (Amsterdamse) Bloggers
        
        (Amsterdamse) Vloggers
        
        (Amsterdamse) Instagrammers
        
        Pro surfers
        
        Pro snowboarders
        
        Pro skaters
        
        Pro kitesurfers
      - Derm, Drop, Spin
        
        Testdagen
        
        Dinks
    - - Pro wakeboarders
        
        Videos
        
        Reviews
        
        Social proof
    - - "Normal' Amsterdammer
        
        Inform via content marketing
    - - No marketing for laggards
  - - - Liking
      - Social proof
      - Because
      - Reciprocity
      - Commitment and Consistency
      - Authority
      - Scarcity
      - Unity
- - - - Characteristics of monopoly
        
        Proprietary Technology
        
        At least 10 times better
        
        Hard to replicate
        
        Networking Effects
        
        Economics of Scale
        
        The fixed costs cann be spread out over ever greater quantities of sales.
        
        Branding
  - - - Can we create breakthrough technology instead of incremental improvements?
    - - Is now the right time to start our particular business?
    - - Are we starting with a big share of a small market?
    - - Do we have the right team?
    - - Do we have a way to not just create but deliver our product?
    - - Will our market position be defensible 10 and 20 years into the future?
    - - Have we identified a unique opportunity that others don't see?
- - - - More equity to employees
      - Company to any direction without stockholder approval
- - - - Focus
      - Make plan for max 3 years
        
        But be flexible
    - - Overhead x 2
      - Most business fail because of lack of funding
    - - Hire manager that shares your vision
    - - Very few entrepreneurs make good managers
      - Don't hesitate to reinsert yourself when it's necessary
- - - - Empirical Creativity
    - - 20 Mile March
    - - They aren't visionary geniuses
      - They are empiricists
  - - - Make incremental advances
      - Stay lean and flexible
      - Improve on competition
      - Focus on product, not sales
    - - It is better to risk boldness than triviality
      - A bad plan is better than no plan
      - Competitive markets destroy profits
      - Sales matters just as much as product