There are common themes that tear down growth, understanding, and progress in our world, and they happen all around us. These are the mistakes that cause tremendous problems in our institutions and ripple on to affect people everywhere.

These points are simple. But, to be the leader or change-maker deserving of your title, be sure to keep them and practice them.

1. “You’re fired because we failed to meet the target.” Focus on the quality of decisions and not the quality of outcomes. This requires the strength to become responsible for the void between your employee’s decision and the outcome you then present to your superiors/shareholders. However, you will reap the rewards by fostering an organization that focuses on getting it right, not just appearing to get it right. You will improve the quality of your employee pool and give them all the benefit of clarity in their decisions, which will lead to a happier workforce, stronger loyalty, and higher productivity. This idea is a teaching point of Professor Ronald Howard, father of Decision Analysis.

2. My customers just don’t see the value of my product. My opponents just don’t see the obvious truth. Avoid internally minimizing those who disagree with you. Become the student of your enemy, and you will begin to see your source of contention with far greater insight. Treat your customers with humility – they know more than you ever will. The big companies known for poor customer service will not last, even if the alternative is an inferior competitor who listens. Also, push yourself to do this on the personal fights you care about deeply, such as debates over religion, sexuality, and abortion. The national ‘debate’ we recently had over healthcare legislation was hugely impeded because most everyday people went to rallies to find others who agreed with them, instead of understanding and learning from their opposition.

3. “My business partner just betrayed me”. Incentives guide all action. Focus on understanding and guiding incentives in all your dealings for all parties involved. Expect people to act according to their incentives, and you will never be disappointed (unless you misread their incentives, of course).  There are a multitude of ways to create great incentives for your employees – be creative and you will find ones that work like a charm. The realm of incentives is far greater than money, time, or effort – it includes reputation, prestige, accountability, guilt, embarrassment, aspirations, social pressure, ideologies, and so on. The universe runs on incentives – make it a dimension of your own thought.

4. Allocate risk to the group most able to manage that risk. This is an essential premise to structuring a deal or an agreement of any kind. Every agreement you ever make is subject to a wide range of risks, from negligent personal default to force majeure. Find risks in your agreements and ensure those risks are allocated to the right party. If your trading partner has the greatest ability to build components, your partner should bear the cost incurred if they do not supply you with the components you have agreed to. Similarly, if you operate a warehouse that is central to the deal, you are able to protect that warehouse and you should bear the responsibility for the goods inside. Always align the transfer of ownership and risk with the flow of money.

5. Derive satisfaction from the strength of your own ideas, not the strength of others’ interest in your direction. I have met too many entrepreneurs who get excited about macroeconomic trends and assume they will make money in the new ‘hot’ field (think the iPhone App Store). When you feel your competitors moving in one direction, react to the vacuum with a moment of thought. Do not make the mistake of automatically following your team / group / department / company / industry / sector. Participants in a gold rush often leave the real wealth to those who stay behind and fill in the gaps.

Look around for those who follow the principles above. You will find examples every day of those who practice these and those who don’t, and the difference in results should be evident. What other ways do you know of to conquer the world? Write me.

Along with the early days of January and the spike in activity at gyms, bookstores, and support groups, it appears that the desire to make some New Year’s resolution often eclipses the time spent choosing it. Nerdy/technical bloggers seem to attach Return on Investment (ROI) to everything – with such a simple indicator of an endeavor’s worth, the value of wide application is self-evident. I would usually steer clear of such an obvious analogy. However, having seen the rush of people at my local gym wearing clothes that look a little too new and expressions that look a little too puzzled, the issue seems to run deep enough. Why is it that these resolutions, often requiring pledges of hundreds of dollars and hundreds of hours of our scarce time, are so easily and recklessly made?

If we think of our New Year’s Resolution foremost as investment rather than recurrent obligation, we might start to make better decisions in choosing one and upholding it.

Expected Payoff and the Set of Gears

Personal goals have such a mix of monetary, physical, and psychological factors that it is difficult to determine a dollar-equivalent figure for an activity’s payoff. Even if your resolution were to make a million dollars (or ten), how would we value the pay-off you would get from achieving what you desired, over and above the money itself? Instead, let’s analyze resolutions’ payoffs simply, by the source of their motivation to you: internal, social, and professional. These are all related to each other, and though each drives the other, one is often overlooked.

Social benefits are those goals we have that are motivated by those around us – the desire to please our loved ones…or even undefined strangers. Social motivations often lurk quietly under New Year’s Resolutions, such as getting thin to gain the appreciation of others, or joining a club because your friends or spouse expect you to.

Professional benefits are motivated by our work and careers. Examples might include signing up for Toastmasters, taking lessons on negotiating, fixing up your professional wardrobe, or just taking the time to read more and update yourself on your field. The issue: we spend too much time working as it is!

Internal benefits are the silent load-bearers often overlooked by today’s over-professional, over-committed, overachieving crowd. We are so strained by our commitments for everyone and everything else that we have no time for ourselves. I consider internal goals the goals that matter to you inside – the goals you carry but sometimes don’t voice. What have you idly imagined trying out in the future? Examples might be signing up for dance lessons, booking a trip to see the Pyramids, or buying your first SLR camera and taking up photography. The answer to the retort “I don’t have time for myself!” is as simple, and as difficult, as “make time”.



Don’t neglect the internal source, for it features the biggest payoff. It will create social and professional benefits as you feel better about yourself, and it will give you the deep sense of lasting satisfaction you probably won’t get from any other set of motivations. Your self improvement will yield a corresponding improvement in self-esteem, and that will transfer throughout your life like energy through a set of gears.

Nomatter what happens to your resolutions, please make just one more this year: help your friends and loved ones find their internal sources, and support them in making them a reality.

The Five Hurdles (a Risk-Adjustment)

The stumbling block for most failed New Year’s Resolutions is their lack of stability – for one reason or another, we simply fail to keep up. The reason is usually effort – the effort is what we pledge, and it is on our own effort that we default. The following are Five Hurdles that work against the stability of an investment in a New Year’s Resolution:

1. Effort
2. Total time (i.e. increasing a month-long resolution to a year-long one)
3. Irregularity (‘flexible’ and informal commitments)
4. Recurrent costs
5. Competition for your time

The Five Hurdles should make it possible for you to reveal where your Resolution is at risk, and take steps to ensure they don’t become a reality. For example, if you are having trouble keeping up with the gym or changing your diet, perhaps the problem is that the commitment doesn’t have the regularity you need – take a class or join a program and put yourself under an obligation to go. Or if your desire to spend more time reading for pleasure is constantly interrupted by your busy and stressed spouse, arrange a time where you can be alone once a week as if in a meeting – or leave the house and find a nice spot somewhere quiet – or help your spouse discover and pursue his/her own resolutions at the same time.

Conclusion

The ROI of a specific New Year’s Resolution is subjective, however it does depend greatly upon the source of your motivations. Take time for yourself and your expected return will increase greatly.

The negative risk adjustment to your ROI can be huge unless you heed and avoid the Five Hurdles.

Support those around you in their attempts to achieve their Resolutions in this busy time. You can help them greatly.

Happy 2010!

Jim Collins put forward the now common and widespread business adage that ‘Good is the enemy of Great’, theorizing that the way to prevent oneself from achieving greatness is by settling for what’s only good enough.

Entrepreneurs can run the risk of thinking our idea is not fit to be released until it satisfies our perfectionist ideals. Immediate entrepreneurial perfection is rarely mandated, except in fields such as healthcare and certain kinds of manufacturing (building bombs, space shuttle parts, and bridges would qualify).

Good is not the enemy of, but rather the iterative precursor to greatness. Even Amazon says it is still striving to be the earth’s most customer-centric company. This doesn’t happen by rejecting good. Amazon has taken time and steadily iterated past good towards becoming great at this particular goal.

The entrepreneur striving for greatness faces an enemy far worse than good: Jadedness. Jadedness is the human condition I fear most, for it is what robs us of the joy of being ourselves. When was the last time you felt wonder or true unbridled happiness? I hope it was not long ago. Jadedness can occur if you’re working alone on a project with no feedback loop to acknowledge your own progress. These are some of the things I’ve done over the last few years.

1. Keep looking for new perspective. If you lose motivation, spend more time reading news, books, and surrounding yourself with outside influences that can help you understand your project a bit better.
2. Brainstorm entirely new concepts. See where they take you, explore the interesting ones, and ‘take the red pill’ as often as you can.
3. Be mindful of new unforeseen connections to your project in other areas of your life experience (ads on TV, dinner conversations with friends, and so on).
4. Find new perspectives on your idea from a stakeholder you haven’t yet explored (the better a job you’ve done in customer development, the more irrelevant this one will hopefully be)
5. Subside the guilt to take a few days off if you feel you need fresh direction.
6. Rid yourself of jaded environments, either by leaving or by changing and imbuing them with innovation and enthusiasm.
7. Don’t be afraid to do what others say you shouldn’t. The famous entrepreneurs we care enough to listen to have all made that choice.

Always be ready to challenge the status quo. Be ‘silly’ and let your silliness overflow into dry environments around you. Stay hungry, stay foolish.

This is an important safety precaution for anyone who uses Excel graphs in PowerPoint. Many make this particular mistake, including some individuals at the large Wall Street investment banks (I know), and it can cost you a model worth up to tens of thousands of dollars or worse, your negotiating position and credibility.

The Scenario: You have a spreadsheet that models your startup (project, business, proposal, etc.). You have graphs such as forecasted revenue streams or equity value calculations. You now want to show these graphs in your presentation.

If you ever want to copy a graph into Powerpoint, don’t copy and paste it. If you do, your entire Excel spreadsheet may be accessible to a viewer (who right-clicks on the graph and selects ‘Edit Data’).

If you see this, your spreadsheet is connected to your presentation.

To make sure your spreadsheets are safe:

1. Copy the graph in Excel.
2. In PowerPoint, go to ‘Paste Special’ (keyboard shortcut Alt H/V/S in Excel ’07) and select any picture type other than ‘Microsoft Office Graphic Object’ (i.e. JPEG, GIF, BMP, Metafile, etc.).

These steps will keep you safe nomatter what, and will ensure your graph is untraceable to your source model. Happy programming.

Entrepreneurs at the beginning of their journey occupy much of their time with idea formation, consisting of two steps:

1. New Idea Generation – a free form flight through hundreds of possibilities using the network of relationships and trends we subconsciously build up over time – what my Stanford Professor and Silicon Valley veteran Steve Blank calls the neural network.
2. Feasibility Exploration of those ideas – market opportunity, revenue streams, competitive analysis, customer development, sales strategy, exit strategy, and so on (plenty of good books on this, contact me for recommendations).

The successful passage of any idea through the formative stage is an exhilaration, and for obvious reasons, thoughts of taking the idea further usually don’t follow far behind. But, there should be another factor in this consideration.

The issues entrepreneurs commonly consider are important, indeed necessary, for any business to be successful. However, there seems to be relatively little attention sometimes paid to the change potential of what we have conceived and are now choosing to bring into the world. I define change potential as ‘creating the most profound positive change for the most people’. Consider:

• a profit-making startup building a better cooking stove for the 3rd world is likely to make a significant daily difference in its users’ lives, reducing the consumption of firewood, reducing burns, improving efficiency, and reducing cooking times.
• a profit-making startup creating a cheaper tester for diabetes could genuinely help people struck with a serious illness.
• a profit-making startup building software to reduce a health insurer’s overhead is helping a large company make money at limited benefit to the sick.
• a profit-making startup designing a new pair of high-end jeans is creating / cashing in on a trend that may make affluent people feel more stylish or attractive for a temporary period.
• a profit-making startup building a new app for the iPhone or a new social media site, which is likely to divert and entertain already-affluent consumers for a few hours or days’ worth of time. And yes, everyone who has an iPhone is affluent on the global scale.

Whether you agree or disagree with the subjectivity above, which companies are making the profound difference? We don’t like ranking true value because it conflicts with every other ranking we have.

Entrepreneurs are the gifted few. The choice to be one is not even available to those without money or access to it, without certain education, without a network of supporters, listeners, collaborators, and advisors, without self-confidence, or without an environment allowing for such a positive view on the world. You are a changemaker. Ask yourself what true value your work is bringing to the world. Who are you helping, and how profound is the change you’re bringing to the world?

All new companies change something. Most change their environs for the better. Precious few change lives in a dramatic and meaningful way. You have a choice – live in the third category.

Business celebrities:

C-List: ‘regular’ entrepreneurs and the investors, employees, shareholders, lenders, mentors, advisors, and partners that surround them, as well as basically everything other than B and A.

B-List: Bill Gates, Steve Jobs, Larry and Sergei, Mark Zuckerberg, Larry Ellison, Reid Hoffman, Biz Stone, etc. (The Changemakers)

A-List: ‘creativity’, ‘flexibility’, ‘team player’, ‘problem solver’, ‘rockstar’, ‘motivated’, ‘self-starter’ (The Buzzwords)

Does this seem strange? In case you think something else comes above the A-List, what do you know that is more widely known, circulated, referenced, (mis)used, recycled, emulated, and imitated in the world of business?

Buzzwords are like the summer blockbuster movies of business – they say little, take up an inordinate amount of time and attention, and they make most people happy enough. They’re also unoriginal and mean practically nothing. How much does the phrase ‘problem solver’ really mean to you any more?

You, the executive in charge, the manager, the writer, or the recruiter, probably use many of these buzzwords. Take notice of them and look for ways around – find the details instead. Avoid giving people brownie points for buzzwords and start producing, and expecting, something new. The quality of your environment will improve.

Some ideas for getting specific on job postings.

Explore instead of rockstar: an engineer who can demonstrate unique personal innovations to database design, a researcher, assimilator, and learner, someone who can always tell us the top ten things that have happened in databases in the last six months, someone who experiments, someone who codes in their free time, someone with a history of perfectionism and a penchant for creating art through code.

Explore instead of creative: someone who documents new ideas on a daily basis, someone who could do a live fast-paced brainstorm with a new group at interview, someone who could give us five original ideas around a theme we provide you in two days, complete with initial feasibility considerations. Someone who will be expected to create new ideas related to our current project on a daily basis (as opposed to creating ideas in any direction). Here’s a problem (x) – e-mail us ten ideas with your resume!

Recruiters and job seekers are painfully bad at assessing the precise degree of a quality each other is talking about when a buzzword gets in the way. Dispense with buzzwords in your thoughts and start saying something that speaks.

___________________

Please leave a thought or start a conversation!

I’ll start with a quick bio so you know who you’re reading! I’m a masters graduate of Stanford in Management Science and Engineering with a concentration in Global Project Finance, with a bachelors in Economics and a minor in Physics. I play the piano and I am an engineer at heart, but one with a love for business and for positive and fundamental change. I have a deep love for emotion, creativity, passion, art, and expression. I recently got into photography and I hope to record piano as well.

This first post is concerned with the biggest string of decisions I have made this year related to career. I left an investment banking job in May for an alternative with few guarantees and no paycheck. I have done internships in a number of industries and worked in four great cities, but I always kept moving, driven by some insatiable desire to somehow experience more, to tackle bigger problems, and to live with vitality. So, I am working on starting a new company, one that will change people’s lives for the better.

Why?

Whether it be consulting in San Francisco, banking in Chicago, or financing large oil and gas projects in London, each experience I’ve had has been tremendously educational while falling short of being self-actualizing. My thoughts have now led to defining myself as a ‘serial creative‘ – one who needs to create, a beginner, a launcher. Serial creatives are those saddled with what Dharmesh Shah calls ‘the genetic flaw‘ – a relentless desire to create and to change through entrepreneurship.

The world really isn’t set up to facilitate people to feel this way. Many will finish college and glide into a job thinking it is the next progression, sometimes without the internal conscious acknowledgement that, for the first time in their lives, they are free. At this point, our life really is our own and our resumes are truly insignificant compared to the reality that is our life. The scary thing is, what you do won’t necessarily make you better. It is our choice to travel to a building and spend many hours there in return for a paycheck. To myself, and my friends who remain driven by the desire for some sense of linear progress, we need to make this realization to live fully and freely in a difficult time. Analogous to Geoffrey Moore’s Technology Adoption Life Cycle, we leave college on the cusp of the Career Chasm, where most people will fall or stay still, locked into making decisions from incomplete choices. Crossing the Career Chasm means freeing ourselves of the idea that success is predominantly found in what an employer decides we’re worth. We can, and should, seek to change the world.