The Personal MBA – Josh Kaufman (Working With Others)

October 12, 2012

Devon Sampson Business, Human Psychology, Motivational Psychology, Social Dynamics , , , , , , , , , , Leave a comment


Force is all-conquering, but its victories are short-lived…Nearly all men can stand adversity, but if you want to test a man’s character, give him power.

-Abraham Lincoln

 
“The major benefit of self-education when working with others is knowing what skill looks like.” (276)

Avoid bloated committees – keep your teams “elite and surgical.”

“Effective communication can only occur when both parties feel safe. As soon as people start to feel unimportant or threatened in a conversation, they start ‘stonewalling,’ shutting down communication. The threatened party may continue to interact, but mentally and emotionally, they’ve withdrawn from the conversation.” (280)
 

Never tell people how to do things. Tell them what to do, and they will surprise you with their ingenuity.

-General George S. Patton

 
“Micromanaging isn’t simply annoying – it’s extremely inefficient. Not only does spelling out every single detail make people feel less important, it actually impairs their effectiveness. No set of instructions, no matter how detailed, is capable of covering every contingency. When something inevitably changes, micromanagement fails.” (284)

“Commander’s intent is a much better method of delegating tasks: whenever you assign a task to someone, tell them why it must be done. The more your agent understands the purpose behind your actions, the better they’ll be able to respond appropriately when the situation changes.”

“When you communicate the intent behind your plans, you allow the people you work with to intelligently respond to changes as they happen.

“The best way to eliminate Bystander Apathy in project management is to ensure that all tasks have single, clear owners and deadlines.” (286)
 

The way to get on in the world is to make people believe it’s to their advantage to help you.

-Jean de la Bruyere, seventeenth-century essayist

 
“Convergence is the tendency of group members to become more alike over time…Convergence also means that groups have a tendency to police themselves. The norms of a group work like gravity – if they are violated, others will exert an influence on the rebel to bring them back in line.” (291)

“The best testimonials don’t necessarily contain superlatives: amazing, best, life-changing, and revolutionary have been so overused that people expect them and discount their expectations accordingly. The most effective testimonials tend to follow this format: ‘I was interested in this offer, but skeptical. I decided to purchase anyway, and I’m very pleased with the end result.’

“The reason this format is more effective than a litany of people gushing about your offer is that it more closely matches how your prospects are feeling: interested but uncertain.” (294-5)

“People have an inherent tendency to comply with Authority figures. This tendency begins in childhood – we wouldn’t survive for very long if we didn’t obey our parents most of the time. As we grow up, we’re socialized to respect and obey other Authority figures: teachers, police officers, government officials, and clergy. As a result, when an Authority figure asks us to do something, we’re very likely to comply – even if the request isn’t appropriate or doesn’t make sense.” (295)

“Developing a strong reputation in a certain area confers the benefits of Authority.” (296)

“Obtaining small commitments makes it more likely people will choose to act consistently with them later.” (298)

“By compensating their salespeople on a salary basis and giving generous bonuses based on long-term performance, (Norm) Brodsky and (Bo) Burlingham encouraged (their salespeople) to focus on making profitable sales versus sales at any cost.” (299)

“In the case of conflict, Perceptual Controls win over incentives every time.” (300)

“The best way to avoid Modal Bias [the assumption that our idea or approach is best] is to use inhibition to temporarily suspend judgment. Part of the value of understanding cognitive biases is the knowledge that you’re not immune to them, and simply knowing they exist doesn’t make them any less influential. Modal Bias is automatic – we have to use willpower to overcome it.” (301)
 

High achievement always takes place in the framework of high expectation.

-Charles Kettering

 
“In How to Win Friends and Influence People, Dale Carnegie recommends ‘Giving others a great reputation to live up to.’ ” (302)

“The Pygmalion Effect [the tendency of our expectations of others to become self-fulfilling prophecies] also features a paradox: having high expectations of people will produce better results, but it also increases the probability that you’ll be disappointed. The Expectation Effect means that our perception of the quality of someone’s work is a function of our original expectations.” (302)

“If you’re doing a formal assessment of someone’s performance, remember to judge performance objectively and quantitatively as much as possible.”

Josh Kaufman’s summary of management

The Personal MBA – Josh Kaufman (Working With Yourself)

September 4, 2012

Devon Sampson Business, Human Psychology , , , , , , , , , 2 Comments


 

To think is easy. To act is difficult. To act as one thinks is the most difficult.

-Johann Wolfgang von Goethe

 
“Monoidealism is the state of focusing your energy and attention on only one thing, without conflicts. [Also known as a 'flow' state] (229)

The first key to achieving a monoideal state is to eliminate distractions; Kaufman claims that it takes roughly 10-30 minutes of uninterrupted time for your mind to become fully absorbed in the task.

If you feel an inner conflict about doing your work, explore it rather than repress it – your mind is often trying to tell you something important.

When you’re really feeling resistance, try the Pomodoro Technique: set a timer for 25 minutes and focus on a single task for the entire duration of the time, then take a 5 minute break when it’s done.

“If you eliminate distractions and Conflicts before you start your dash, you’ll naturally transition into a Monoideal state a few minutes into the work period.” (231)

Kaufman also recommends meditation as a way to become resistant to distractions.

“While many people assume [multitasking] makes them more efficient, Monoidealism and multitasking are complete opposites. Neurologically, it’s impossible for your brain to multitask. When you’re trying to do more than one thing at a time, you’re not really parallel processing – you’re rapidly switching your Attention from one thing to another.”

“Every time you switch the focus of your Attention from one subject to another, you incur the Cognitive Switching Penalty. In order to take action, your brain has to ‘load’ the context of what you’re doing into working memory. If you constantly switch the focus of your Attention, you’re forcing your brain to spend time and effort thrashing, loading and reloading contexts over and over again.” (232)

In order to avoid mentally demanding context-switching, batch similar tasks together, i.e., have a block of time where you do all of your creative tasks.
 

The Four Methods of Completion

1.) Completion – doing the task completely; this is the option most people think about, but it should only be used for important things that you can do particularly well.

2.) Deletion – eliminating the task; use this for tasks that are unimportant or unnecessary. “If it’s not worth doing, it’s not worth doing well or quickly” (233)

3.) Delegation – assigning the task to someone else; used for important tasks that someone else can complete almost as well as you can (or even better).

4.) Deferment – putting the task off until later; effective for tasks that are somewhat important, but that certainly aren’t critical.
 

“Saving noncritical tasks for later is a good way to keep your attention and energy focused on what’s most important…Periodically reviewing this list when you’re looking for something new or exciting to do is quite useful.” (234)

“A Most Important Task (MIT) is a critical task that will create the most important results you’re looking to achieve. Everything on your plate is not critically important, so don’t treat everything on your task list equally…At the beginning of every day, create a list of two or three MITs, then focus on getting them done as quickly as possible.” (235)

Some other points about MITs:

  • keep your MIT list separate from your other to-do list
  • use self-elicitation questions such as “What are the two or three most important things that I need to do today?” to help you generate the list of MITs
  • combining the MIT technique with Parkinson’s Law by setting an arbitrary deadline for your MITs, such as 10:00am, is extremely effective
  • all of this will help you maintain a monoideal state

    •  
    “For best effect, your Goals should be under your control. Goals like ‘losing twenty pounds’ are soul crushing because they’re not directly under your control – losing weight is a result, not an effort.” (237)

    Kaufman distinguishes between States of Being (such as happiness) and goals: the former shouldn’t be seen as a fixed achievement, but rather, a measure of the quality of your present experience. States of Being make for great decision criteria, but they lead to frustration if seen as a fixed goal to be achieved in the future.

    “For best results [in behavior change], focus on installing one habit at a time. Remember, you only have so much Willpower to use each day, and overriding your default mode of action depletes it quickly…Focus on installing one habit until taking action feels automatic, then move on to the next.” (240)
     

    Out of the available options, which experience do I want to have?

    -Steve Pavlina’s “tiebreaker” question when making a difficult decision

     
    “The Next Action is the next specific, concrete thing you can do right away to move a project forward. You don’t have to know everything that must be done to make progress on a project – all you need to know is the very next thing you can do to move the project forward.” (246)

    “One of the quirks about how your mind works is that it handles information from outside your head better than the thoughts that are rattling around inside your head.” (248)

    “There are two primary ways to Externalize your thoughts: writing and speaking. Writing (or drawing, if you prefer) is the best way to capture ideas, plans, and tasks. Not only does writing give you the ability to store information in a form you can reference later, it gives your mind the opportunity to examine what you know from a different angle. Challenges and issues that seem insurmountable while they’re bouncing around in your frontal lobe can often be solved surprisingly quickly after they’re put on paper.”

    “If you want to be productive, you must set limits. Juggling hundreds of active tasks across scores of projects is not sustainable: you’re risking failure, subpar work, and burnout.” (260)

    “Limits always have consequences – if you’re not prepared to handle the consequences, it’s not really a limit.”

    “Like all biological organisms, humans need to rest and recover for peak performance. Taking a break isn’t a sign of laziness or weakness – it’s a recognition of a fundamental human need…Sleep deprivation results in a prolonged down cycle, which gets in the way of getting things done.” (262-3)

    “The more Attached you are to a particular idea or plan, the more you limit your flexibility and reduce your chances of finding a better solution…If you become too Attached to the visions you have in your head, you’ll have a hard time adjusting to the inevitable twists and turns of life.” (270)

    Kaufman recommends putting a small percentage of your monthly income into a “Personal Research and Development (R&D) Budget”, money you can use (guilt-free) to purchase books, courses, conferences: anything that will help you improve your skills and capabilities.

    The Personal MBA – Josh Kaufman (Value Delivery)

    May 8, 2012

    Devon Sampson Business , , , , , , , Leave a comment

     

    “A satisfied customer is the best business strategy of all.”

    -Michael LeBoeuf, business professor

     
    The opposite of falling short of expectations is not “meeting expectations” – it is exceeding expectations.

    There are two main types of Value Delivery systems: direct-to-user and intermediary.

    The trade-off you face when you’re considering an using an intermediary is that you won’t have to do as much work and your sales can actually increase, but you’ll have less control over the Value Delivery process and you face Counterparty Risk – the chance that the intermediary will screw up at the expense of your reputation.

    The shoe company Zappos often surprises its customers by having the shoes arrive at their customer’s houses days ahead of schedule. They could advertise the fact that they do free expedited shipping, but they don’t – they think the surprise is more valuable.

    “A customer’s perception of quality relies on two criteria: expectations and performance. You can characterize this relationship in the form of a quasi-equation, which I call the Expectation Effect: Quality = Performance – Expectations.

    “Customer expectations have to be high enough for a customer to purchase from you in the first place. After the purchase is made, however, the performance of the offering must surpass the customer’s expectations in order for them to be satisfied…If performance is lower than expectations, the perception of quality will be low – no matter how good the offer is in absolute terms.” (137)

    That being said, you need to provide the baseline essentials that you promise in a Predictable manner.

    The three primary factors that contribute to a Predictable experience:
    -Uniformity (delivering the same characteristics every time)
    -Consistency (integrity across your entire product line, not doing contradictory projects that violate expectations – ie: New Coke)
    -Reliability (being able to count on the delivery of the value without error or delay)

    Throughput is the rate at which a system achieves its desired goal (calculated by Rate/Time). Three types of Throughput are:
    -Dollar Throughput (how quickly it takes your business to make a dollar of profit)
    -Unit Throughput (how much time it takes to create an additional unit for sale)
    -Satisfaction Throughput (how much time it takes to create a happy, satisfied customer)

    “If you don’t know your Throughput, make it a priority to find out – measuring Throughput is the first step towards improving it.” (141)
     

    The problems of this world are only truly solved in two ways: by extinction or duplication.

    -Susan Sontag, author and political activist

     
    “Scale is the ability to reliably duplicate or multiply a process as volume increases. Scalability determines your maximum potential volume.” (143)

    “As a general rule, the less human involvement required to create and deliver value, the more scalable the business.” (144)
     

    Sometimes when I consider what tremendous consequences come from little things, I am tempted to think: there are no little things.

    -Bruce Barton, advertising executive best known for creating the Betty Crocker brand

     
    “Toyota’s approach [to manufacturing] is based on the Japanese concept of Kaizen, which emphasizes the continual improvement of a system by eliminating muda (waste) via a lot of very small changes.” (145)

    “Small changes to your Value Delivery process can save you a ton of time and effort in the long run.”

    “Scalable systems amplify the results of small changes. Small changes to scalable systems produce massive results.” (146)

    Perfecting your Value Delivery system is the key to 4-Hour Work Week-style automation.

    The primary benefit of creating a system is that you can examine the process and make improvements.
     

    If you can’t describe what you are doing as a process, you don’t know what you’re doing.

    -W. Edwards Deming, production management expert and pioneer of statistical process control

    The Personal MBA – Josh Kaufman (Sales)

    April 29, 2012

    Devon Sampson Business , , , , , , , 2 Comments

     

    People don’t like to be sold, but they love to buy.

    -Jeffrey Gitomer, author of The Sales Bible

     
    “Sales are the only point in the business cycle where resources flow into the business, which makes completing transactions critically important.” (107)

    “When you’re starting a new business, the object is to get to the point where you make your first profitable transaction as quickly as you possibly can, because that’s the point where (your work) transitions from being a project to being a business.”
     

    The Four Pricing Methods

     
    1.) Replacement Cost – “How much would it cost to replace?”
    2.) Market Comparison – “How much are other things like this selling for?”
    3.) Discounted Cash Flow/Net Present Value – “How much is it worth if it can bring in money over time?”
    4.) Value Comparison – “Who is this particularly valuable to, and by how much more?”
     
    “(Out of these four methods,) value comparison is typically the optimal way to price your offer, since the value of an offer to a specific group can be quite high, resulting in a much better price. Use the other methods as a baseline, but focus on discovering how much your offer is worth to the party you hope to sell it to, then set your price appropriately.” (113)

    “Value-based selling is the process of understanding and reinforcing the reasons why your offer is valuable to the purchaser.” (114)

    “Value-based selling is not about talking – it’s about listening.”

    “Asking good questions is the best way to identify what your offer is worth to your prospect…Instead of barging in with a premature, boilerplate hard sell, successful salespeople focus on asking detailed questions to get to the root of what the prospect really wants.” (114-115)

    “By encouraging your prospects to tell you more about what they need, you reap two major benefits. First, you increase the prospect’s confidence in your understanding of the situation, increasing their confidence in your ability to deliver a solution. Second, you’ll discover information that will help you emphasize just how valuable your offer is, which helps you in framing the price of your offer versus the value it will provide.” (115)

    Concept Page on PersonalMBA.com – Value-Based Selling
     

    There is only one boss: the customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.

    -Sam Walton, founder of Wal-Mart

     

    “Understanding the other party’s next best alternative gives you a major sales advantage: you can structure your agreement so it’s better than their next best option.” (117)

    A buffer is a third party you hire to negotiate on your behalf. They help you negotiate the best deal without compromising your relationship with the other party.

    “As a social force, reciprocation is one of the primary psychological tendencies that underlie human cooperation…Here’s the tricky part: the desire to reciprocate is not necessarily in proportion to the original benefit provided.” (124)

    An example of this given by Robert Cialdini in his bestseller Influence: The Psychology of Persuasion is how certain car salesmen offer a gift up front. “Can I get you a coffee? Would you like a soda? Some water? Cookies? Is there anything I can do to make you more comfortable?” It seems like a small gift, but studies have shown that this gets people to spend thousands of dollars more on average.

    “Being generous is one of the best things you can do to improve your results as a salesperson. By giving away value and helping others as much as you can, they’ll respect you; it will build your reputation, but it will also increase the probability that they will be interested enough when you do present your call-to-action.” (125)
     

    We confess our little faults to persuade people that we have no large ones.

    -Francois de la Rouchefoucald, 17th-century poet

     
    Making a damaging admission improves trust. As an example, Josh Kaufman mentions a time when he was looking to buy a car: one dealership made sure to photograph every detail of the car – including a small chip in the paint on the left side. This minor flaw wasn’t an issue for Kaufman, but the fact that the dealership was completely open about it got him to trust that the dealership wasn’t covering anything else up and he bought the car.

    “Instead of making them wonder (what the catch is), tell them yourself. By being up front with your prospects regarding drawbacks and trade-offs, you’ll enhance your trustworthiness and close more sales.” (126)

    “Your primary job as a salesperson is to identify and eliminate barriers standing in the way of completing the transaction. Eliminate your prospect’s objections and barriers, and you’ll close the deal.”

    Key Concept – Common Barriers to Purchase

    Risk Reversal is a strategy that transfers some (or all) of the risk of a transaction from the buyer to the seller, eliminating another major barrier to purchase.

    The Personal MBA – Josh Kaufman (Marketing)

    April 21, 2012

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    In an attention economy (like this one), marketers struggle for attention. If you don’t have it, you lose.

    -Seth Godin

     
    Getting attention is the point of marketing, but remember that the only attention that really matters is attention from prospects who will purchase from you.

    Don’t even expect people to be receptive to something that fundamentally contrasts with their world-view (eg: benefits of red meat to a committed Vegan).

    “Receptivity is a measure of how open a person is to your message.” (83)

    The two components of receptivity are: what and when.

      When – People tend to be more receptive at certain times of the day, and extremely non-receptive to even the best value-offerings in the wee hours of the morning.
      What – “The form of your message has a big influence on how receptive people are to the information that message contains. If the form of your message suggests that it was created just for them, you’re far more likely to get your prospect’s attention.” [eg: postal junk mail vs. hand-addressed Fed-Ex envelope] (83-84)

    “Skilled marketers don’t try to get everyone’s attention – they focus on getting the attention of the right people at the right time.“

    “Marketing is most effective when it focuses on the desired end result, which is usually a distinctive experience or emotion related to a core human drive.” (87)
     

    People don’t buy quarter-inch drills; they buy quarter-inch holes.

    -Theodore Levitt, former professor at Harvard Business School

     
    Discovering where Probable Purchasers start looking for information after crossing the interest threshold (Point of Market Entry) is extremely valuable, because that knowledge will allow you to reach them first (eg: Procter & Gamble, Fisher Price, and many other companies make “care packages” that are given to new parents as soon as they leave the hospital with their new baby).

    “The quickest way to waste a multi-million-dollar advertising budget is to try to force people to want something they don’t already want.” (92)

    “If you encourage your prospects to visualize what their life will look like after purchasing, you increase the probability that they’ll purchase from you. The best way to help your customers visualize is to expose them to as much sensory information as possible – the information their mind uses to conclude, ‘I want this.’” (94)
     

    Selling to people who actually want to hear from you is more effective than interrupting strangers who don’t.

    -Seth Godin

     
    “A Hook is a single phrase or sentence that describes an offer’s primary benefit. Sometimes the Hook is a title, and sometimes it’s a short tagline (eg: a title like ‘The 4-Hour Work Week’ or a tagline like ’1,000 songs in your pocket’)” (99)

    Attention isn’t quite enough, however. You also need a Call-To-Action. Consider two billboards for the same place:

    Devon’s Hamburgers are the best*

    Take exit 25 and turn right for the best burgers in town

     
    *Disclaimer: Statement is for example purposes only. There has yet to be conclusive evidence that suggests that Devon’s hamburgers are, in fact, the best.

    The Personal MBA – Josh Kaufman (Value Creation)

    April 17, 2012

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    Roughly defined, a business is a repeatable process that:

      1. Creates and delivers something of value… (Value Creation)
      2. That other people want or need… (Marketing)
      3. At a price they’re willing to pay… (Sales)
      4. In a way that satisfies the customer’s needs and expectations… (Value Delivery)
      5. So that the business brings in enough profit to make it worthwhile for the owners to continue operation (Finance)

    “Take any one of these five factors away, and you don’t have a business – you have something else.” (36)

    “The Five Parts of Every Business are the basis of every good business idea and business plan…If you’re thinking about starting a new business, defining what these processes might look like is the best place to start. If you can’t describe or diagram your business idea in terms of these core processes, you don’t understand it well enough to make it work.” (37)

    Don’t expect skills that aren’t related to the Five Parts of Every Business to be economically rewarded.
     
     

    Don’t go around saying the world owes you a living. The world owes you nothing – it was here first.

    -Mark Twain

     
    Key Concept – The Ten Ways to Evaluate a Market
     
    When any two markets seem equally attractive in most categories, choose the one with competition; you’ll know from the start that there’s a market of paying customers for your product, eliminating your biggest risk.

    “If you find a way to make a necessary but dull market interesting enough to pursue, you may have discovered a hidden vein of gold waiting to be mined.” (44)
     
    Key Concept – The 12 Standard Forms of Value
     
    “Don’t be shy about showing potential customers your work in progress. Unless you work in an industry with unusually aggressive, competent, and well-funded competitors, you really don’t have to worry about other people ‘stealing’ your idea. Ideas are cheap – what counts is the ability to translate an idea into reality, which is much more difficult that recognizing a good idea.” (62)

    Nobody gets things right the first time so go through the Iteration Cycle to improve your project over time. Iteration has six major steps, which Josh Kaufman calls the WIGWAM method:

  • 1. Watch – What’s happening? What’s working and what’s not?
  • 2. Ideate – What could you improve? What are your options?
  • 3. Guess – Based on what you’ve learned so far, which of your ideas do you think will make the biggest impact?
  • 4. Which? – Decide which change to make.
  • 5. Act – Actually make the change.
  • 6. Measure – What happened? Was the change positive or negative? Should you keep the change, or go back to how things were before this iteration?

    •  
    “The Iteration Cycle often feel like additional work because it is additional work. That’s why so few people do it: it’s very tempting to skip all of these ‘extra’ steps and attempt to create the final offering outright.” (64)

    The more times your project goes through the Iteration Cycle, the better off it will be. Therefore, you should also focus on your Iteration Velocity, the speed in which you’re going through each Iteration Cycle.
     

    Our goal is to have more at bats per unit of time and money than anyone else.

    -Eric Schmidt, Chairman and CEO of Google

     
    The feedback you get should come from real potential customers, not friends and family. Ask open-ended questions to get them to do most of the talking, and then give them the opportunity to pre-order; it’s one thing to say you like a product but quite another to put your money where your mouth is. If no one is willing to pre-order, ask them why and you’ll discover their major barriers to purchase.

    Critically Important Assumptions (CIAs) – facts or characteristics that must be true in the real world in order for your business to be successful. Be very clear about your CIAs when working on a project.

    “Using what you make every day is the best way to improve the quality of what you’re offering. Nothing will help you find ways to make your product better than being its most avid and demanding customer.” (80)
     

    Make something that people want…There’s nothing more valuable than an unmet need that is just becoming fixable. If you find something broken that you can fix for a lot of people, you’ve found a gold mine.

    -Paul Graham, Founder of Y Combinator

     

    The Personal MBA – Josh Kaufman (Finance)

    April 3, 2012

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    “Finance is the art and science of watching money flowing into and out of a business, then deciding how to allocate it and determining whether or not what you’re doing is producing the results you want. It’s really not any more complicated than that.” (151)

    “The very best businesses create a virtuous cycle: they create huge amounts of value while keeping their expenses consistently low, so they make more than enough money to keep going without capturing too much value.” (152)

    An under-appreciated benefit of profits is the fact that they can act as a “cushion” against an unexpected rise in expenses.

    There are only four ways to increase your business’s revenue:

      1. Increase the number of customers you serve
      2. Increase the average size of each transaction by selling more
      3. Increase the frequency of transactions per customer
      4. Raise your prices

    The purpose of a customer is not to get a sale. The purpose of a sale is to get a customer.
    -Bill Glazer, advertising expert

     
    “Lifetime value is the total value of a customer’s business over the lifetime of their relationship with the company.” (160)

    “Allowable Acquisition Cost (AAC) is the marketing component of Lifetime Value. The higher the average customer’s Lifetime Value, the more you can spend to attract a new customer, making it possible to spread the word about your offer in new ways.” (161)

    “Keeping a running tally of how much you spend and how much revenue you collect from the start of your business’s operations is the only way to figure out whether or not you’ve actually made money.” (166)

    “Purchasing power is the sum total of all liquid assets a business has at its disposal. That includes your cash, credit, and any outside financing that’s available.” (168)

    “Because debt keeps money in your account, it maintains your purchasing power.”

    “Compounding is the accumulation of gains over time. Whenever you’re able to reinvest gains, your investment will build upon itself exponentially – a positive feedback loop.” (174)

    “If you reinvest the revenue your business generates and your business is growing rapidly, you can multiply your original investment many times over. Compounding is the secret that explains how small companies that reinvest their profits become large companies in a few short years.”