…………..Advice from the Chairman of the Board
While I have focused on Creativity and Innovation and challenging conventions, I look at the other side of the argument.
Here in this book, the author argues that inorder to be successful at Business and Life, one need not do more smart things. Instead do fewer stupid things.
The outcome the author hopes to give his readers are a set of tools that will help readers become more thoughtful in their decisions and decision making process before taking action.
Here are my notes:
The Dreaded Dumb Tax
How much money would you have right now if you were given the ability to unwind any three financial decisions you have ever made?
Chances are there is nobody on this planet who would say that their income would be unchanged.
We have all paid Dumb Tax. All problems started out as a good idea and all those good ideas were emotionally justifiable at the time.
Emotions and intellect work inversely. When emotions go up, intellect goes down. More often than not, critical thinking about what could go wrong and doing the work to mitigate those risks before taking action is required.
The 5 Core Disciplines of Thinking
- Find the Unasked Question — Create a question that will result in clarity and generate better choices
- Separate the Problem from the Symptom — Identify the real obstacle that is blocking my progress
- Check Assumptions — Differentiate the facts from the story
- Consider 2nd Order Consequences — Clarify the risks and the possibility/cost of being wrong
- Create the Machine — Create the executable plan and identify the resources (people and money) required to solve the real problem and make forward progress
Core Discipline #1 — Find the Unasked Question.
When we get stuck, we tend to think the reason is because we don’t have the right answer. What keeps us stuck are inferior questions that produce tactical or unattractive choices. A problem is simply an unanswered question.
If there are no possible solutions or available improvements to the situation it is not a problem but rather a predicament. A predicament is a state of environment for instance, the price of oil, a tornado. Nothing much you can do about it. We can only choose how we act in such a situation.
Framing the problem as a statement is always a mistake. A statement tricks your brain into thinking this situation is a fact and not a question that needs a solution.
“The fees are high” provides no insight to remedy the situation. Neither does, “why are the fees high?”
One is to frame the problem as a “How might I…so that I can…” question. “How might I generate an additional $20000/month in profits, so that we can afford to pay the fees of that new software subscription that will enhance productivity?” is a lot better than “Our profits suck” or “How did it get this way?” Why does it stay this way? How can I improve the way it looks?
Our job as business owners and leaders is to get clarity on the right question to ask before taking action.
Core Discipline #2 — Separate the Problem from the Symptom
Most people, when asked to pinpoint their biggest problem, erroneously identify their problems the gap between where they are and where they would like to be. The gap is not your core underlying problem. It is a symptom. The symptom is what indicates something is wrong, but it does not shed any light on what is causing it to show up.
We mistakenly believe we know what our problems are because we can identify the places we don’t have what we want. The core problem is never the obvious gap comparison between what “is” (Point A) and what “ought” (Point B). Don’t live in the gap. Reminds me of Dan Sullivan’s Gap versus Gain mindset here (Free PDF):
The key to defining the root problem is discovering the obstacle that is impeding your progress from here to there. It is the obstacle that is the problem, not the dissatisfaction with your current circumstances!
Three most important questions to ask to help get clarity about the root problem/obstacle are:
- What are the possible reasons I am noticing this symptom?
- What isn’t happening that, if it did happen, would cause the perceived gap to either narrow or disappear?
- What is happening that, if it stopped happening, would cause the perceived gap to narrow or disappear?
Core Discipline #3 — Check Assumptions
All good ideas that turned out bad have one thing in common: unexamined assumptions which usually take the form of a really great story. The key to checking assumptions is to look for where you have substituted an opinion for a fact.
For example: i) Many people assumed that housing prices will always go up and real estate is the best investment of all and under any circumstance. The year 2008 broke that assumption.
ii) Schooling requires kids to be in a closed classroom. The year 2020, broke that assumption with schools now having remote classes enabled.
To counter assumptions, ask ‘What Don’t I See?’
Core Discipline #4 — Consider the 2nd-Order Consequences
Three questions to help one think before acting:
What is the upside? — We are generally good at asking ourselves this question.
What is the downside? — We rarely can do this by ourselves if we are irrationally emotional and optimistic about the thing we are deciding about
Can I live with the downside? — Obvious one. If for example I lose my investment in my relatives startup, can I live with the loss of my investment in time, money, effort?
Identify the potential risks, the probability and costs of failure for any major decision. This is essential to reduce Dumb Tax. Mistakes are inevitable but making bad moves after stupid moves can be avoided.
Core Discipline #5 — Create the Machine
This is the execution phase. A system in place which takes you from Point A to Point B or removes the obstacle and maybe also closes the gap.
Consistent execution requires dashboards, processes, best practices, standards, metrics and accountability to measure the critical drivers, monitor the progress, reward the success, and coach/train people operating it.
Setting a consistent time to just think!
The author uses Think Time, a dedicated time to have to just focus on important questions and think about them and come up with an outcome.
Examples of questions and their variations to get different insights:
Main question:
Who is my target customer?
Other related questions
Who was my target customer?
Who are the target customers of my competitors?
Why aren’t my sales doubling?
Which markets should we target to double our sales?
What if I were fired and a new CEO comes in. What decision would they make?
What else could I do?
What could I do that would make this problem worse?
How would my competition solve this problem?
The author has the humility to suggest not to follow all his sayings and do some independent thinking instead. The reality is nobody knows the future and nobody can predict it through simplistic formulas and get successful quick manuals.
This is a nice book to have in your library. Has many chapters, with so many fascinating questions that will open one’s mind and one that can be used under various contexts.
