Category: Mental Models

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What Do You Need To Do To Get Extreme Success?

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Saturday, 9.44pm

Sheffield, U.K.

Charlie Munger, the Vice-Chairman of Berkshire Hathaway, is well known for his views on the importance of mental models – concept that you can use to explain and understand why things happen the way they do.

Take extreme success, for example.

What is it that makes Walmart or Google so successful? And are these principles that can be used for smaller firms or even for ourselves as individuals?

Munger says extreme success is likely to happen when key factors combine in certain ways.

A. One or two factors – taken to extremes

When you think Walmart, you probably think cost. When you think Google, you think search.

These companies have taken a leadership position in a particular space – in their industry and in our minds.

If you want a prestige car, you’re going to think BMW and Mercedes first. Then there are the others.

Now, perhaps one doesn’t think of extreme success in the context of a local convenience store, but the factor that keeps them going is that they’re open late. Later than most others anyway.

So they thrive in their small niche, extremely successful in their own way.

B. Combining factors to get exponential results – the lollapalooza effect

This is the idea that 1 + 1 + 1 = 30, not 3.

Toyota have an ad out at the moment, showing a Hilux behind a glass panel and with the words in case of apocalypse, break glass.

You could argue that a Hilux gives you the ability to go anywhere and survive, has functionality that is world-class but is still something you can fix on the side of the road and is priced like a Toyota and not a Hummer.

It’s like the old joke comparing Land Rovers and Land Cruisers. If you want to go into the Australian outback, take a Land Rover. If you want to come back, take a Land Cruiser.

Scott Adams says that when he combined average skills at writing, drawing and knowledge of engineering the resulting comic, Dilbert, struck a chord with millions and took off.

It’s the combination that did it, not just any one factor.

C. Great performance over a number of factors

So here you need to look at organisations that get a lot of things right – and that’s not easy.

The more things you have to do, the more things that can go wrong.

Take Amazon, for example. It’s a company that does a ridiculous number of things – from providing a platform where you can buy almost anything to the support structures around your purchase, like recommendations and next day delivery.

Or take one of those survival watches. If you get one of them, you need to be confident that it will survive a plunge into freezing water, keep a signal going that can be picked up by satellite and looks good enough so you can wear it to an expensive fundraiser.

It’s hard to do a lot of things right. When you do, you’re going to get far.

D. Ride a wave

The final factor is that you’re lucky enough to be in the right place at the right time. Bill Gates was in the right place when IBM kickstarted the personal computer industry. Google came out with search algorithms just as the web reached the point where Yahoo’s listings couldn’t keep pace with the growth in pages.

The waves might be large, macroeconomic ones like the transition to renewable generation or the invention of the shipping container.

Or they might be small ones, like coming out with a diet that catches the eye of an influencer and spreads.

The thing with waves is that it’s hard to predict when they will turn up. You just need to get in position and, if you’re lucky, one will come along and lift you up.

So, do these apply to small businesses and individuals?

Well… as a model, perhaps we can use them and see. As George Box wrote all models are wrong, some are useful.

For example, can you be a leader in a particular factor? Cost, for example. While all your competitors do things manually, can you automate stuff so that you can be cheaper, but offer much more?

Can you put things together so that they have an exponential effect. For example, it’s incredibly hard to recruit people who can read, write and do arithmetic (to a high standard!). If you can… then there are many consulting jobs waiting for you with high salaries.

Are you a superb generalist – someone who can walk into an industry and fix everything from sales to operations to R&D. If so, perhaps that’s your edge.

And finally – have you qualified in a field whose time has come? Neuroscience, perhaps? Or big data?

What’s perhaps clear is that if you want to succeed, it’s not just about working hard.

You also need to know why you have an edge.

And then work on the things that sharpen your edge.

Cheers,

Karthik Suresh

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How Do You Find Out What People Really Want?

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Friday, 10.24pm

Sheffield, U.K.

I’ve been thinking a lot about this whole idea of having goals and going after them.

I was listening to a podcast where the person being interviewed said that the purpose of their company was to help people do something on Instagram intentionally.

Then there’s the news story about Big Brother in the UK – and how the first few seasons of the show were about real people – an authentic portrayal – and then as the series went on it got more and more artificial, with the participants doing what they were expected to do for the camera.

I’m not a big fan of selling. No one really is, I think.

But it’s easy to think that’s what we have to do, that’s how the world works. We have something of value to offer. You have money. And my sales job is to help you exchange your money for my value.

And then I started reading a book about design patterns in user interface design.

It says if you want someone to use a tool you create, then you’re going to have to understand them first.

No one uses a tool because they want to use a tool.

Take a spade, for example. You’ll pick up a spade because you want to get your garden sorted. You want to get your garden sorted so you’ll have somewhere relaxing to sit during the summer with a cool drink.

You’re using the space because you really want to put your feet up and relax.

And this is something we all need to spend some time thinking about.

Let’s say you’re starting a management consultancy that is going to do some clever data analysis.

So, you can crunch data and create pretty pictures and send them to your customer daily.

Is that what she wants? To print off all your charts and cover her walls with them?

Or is she in charge of procurement and is responsible for cutting costs – and she only looks good to her boss if she cuts costs year on year.

So is your analysis going to help her reach that goal of cutting costs or, more importantly, warn her when she’s in danger of actually letting costs go up?

So, going back to the pattern book, we need to put our customers under a microscope.

We need to figure out what their real goals are. What’s their equivalent of cheese that will get them sniffing the air?

We need to think about how they will go about things. Can they make decisions right now? Does everything need to be in a budget first? What route will they take?

How do they talk about what they want? There’s not much point talking about vitreous structures of patent fragility when they think in terms of glass houses.

How familiar are they will what you do? Do you need to spend a lot of time educating them, or will it be obvious how you can help them?

What do they think about what you do? For example, I once called someone who managed a metals warehouse about commodity prices and got a long lecture on how they did nothing with markets and that was only for fancy chaps that drove Ferraris in London.

Even though the warehouse manager was sat on inventory of several million that went up and down in value all the time.

This is why scattergun or spray and pray approaches don’t really work.

You can’t really sell someone. Not for the long term anyway.

They have to make their own minds up about what you offer. The challenge for you is getting in position so they can see you when they’re ready.

It’s all about being discoverable.

And perhaps the best way to do that is to get out there and start talking to people. Not to sell them, but to understand them better.

Then, if they need you, they’ll know where to find you.

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Making Sense Of It All – Is It Even Possible?

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Thursday, 9.21pm

Sheffield, U.K.

Have you ever noticed that when you sit at your table and look at your glass – I mean really look at it – it turns out that it isn’t there at all?

Of course you haven’t, because glasses don’t act that way.

Electrons do.

You’ve probably heard of the Heisenberg Uncertainty Principle. It’s the idea that you can’t tell where something is and how fast it’s moving at the same time.

With an electron, if you try and look for it – that action will give it some energy, a boost, and it will end up speeding somewhere else. If you get its speed right, it will now be in a new place.

So you end up with this idea that an electron is everywhere at the same time, a sort of cloud rather than something precise.

And this is seems like a passable metaphor for society if we want to make sense of it all.

So we start with a flux of events and ideas, the braided rope of everyday life.

How do we make sense of what’s going on?

Take an approach that Meryl Louis set out in 1980.

She says that we the events we experience result in us making conscious and unconscious assumptions and anticipations.

What these let us do is make predictions.

Then… we experience events as they happen, as they unfold with time.

Some of them turn out like we predicted – but sometimes they don’t. We’re surprised.

That results in us needing to come up with an explanation – something that in turn helps us interpret and attribute meaning to the surprise we’ve just had.

Something that helps us make sense of it all.

So far so obvious – what’s the point of this all?

Well, one point is kind of screamingly obvious. All this happens in our minds. The actual flux of events and ideas doesn’t really care about any of this.

The second is that sense making is closely linked to surprise. We need to be jolted out of the everyday to see and discover something new.

Let’s say you do the same thing every day. You go to work, drive the same route, sit at the same desk, follow the same routine. How likely is it that you’ll experience something different?

Probably quite low.

It’s nice to have a simple life – one with routines. But if you’ve got too much of that, you need to get restless, a little worried, a little angsty about it all.

It’s very easy to assume that what you do is not very good, no one else will hire you, you’re not very marketable or sociable or attractive.

And if you’re in an environment (which you’ve constructed by the way with the decisions you’ve made over time) where your predictions about how things will happen come true all the time – then you’ve created a version of meaning, of sense as a result.

This can happen to individuals, to organisations, to families.

The antidote to the everyday is to get some surprise into your life.

And the thing is you don’t know where that will come from – you just need to create the opportunity for more surprises to enter your life, surprises that force you to re-examine your existing ideas and come up with new ones, ones that have a different kind of meaning.

Perhaps this needs an example. Perhaps not.

Here’s one. The fallacy of centrality.

This is the assumption that if something is important, then you’d know about it. And you don’t, so it’s not.

That leads to all kinds of problems.

Have you ever experienced a situation where someone new came in, promising to sort everything out. You put forward an idea for something that would make things better, but that person ignores you. They’ve never heard of this approach, so it clearly can’t work.

Except they then fail – and your approach works.

The problem is that the way in which they made sense of things failed when they experienced the events you did as well. Perhaps they were surprised, perhaps they learned from it. Perhaps not.

What this means for us is that the world is complex. For us to make sense of it all, we need to be alert to surprises, because that’s how we learn.

And if you’re not being surprised enough, you need to change something. Now.

Cheers,

Karthik Suresh

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Why Succeeding Is More About Defeating Ourselves Than Others

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Wednesday, 9.04pm

Sheffield, U.K.

I was listening to Amy Porterfield’s podcast today and her guest, Brooke Castillo, said that the first time you do a webinar “your body literally thinks something is about to attack you and that you can die”.

Which made a picture jump into my mind – one that stayed there.

As human beings, we avoid pain. The pain of failure, the pain of rejection – any kind of pain.

In fact, we’re so fearful of pain that it can make us put things off – avoid doing things that will end up being good for us.

It’s a well known fact that we hate losing much more than we like winning. The ratio is something like five to one.

And this is a problem when we try and do anything new or different or better.

You know the old saying – if you’re so smart why aren’t you rich?

The problem, perhaps, is that if you’re smart enough to know all the ways in which things can go wrong, then you’ve got much more to be afraid of.

You create a monster in your mind, a monster that represents what failure looks like. Then, that monster sits in your way and stops you from doing things that you need to do.

And the problem is that this is a physical barrier, not just a mental one. Your body senses your brain’s fear and creates a mix of chemicals that physically cause you to want to run and hide.

To do anything but that horrible task of reaching out and making a cold call or connecting with someone new.

So, what are you going to do. What should one do when faced with a monster in one’s own mind.

Perhaps one could start with looking.

Many years ago, I was taught how to solve problems in engineering. I found analog circuit design hard, and a particular problem just wasn’t making sense to me.

My lecturer at the time just said look at the problem. Just look at it.

And so that’s what I did. For around three days.

All I did was look and think and look and think. And look and think about it. And think about what I could do about it.

And then suddenly, after three days, it felt like a rock had moved, something had shifted and suddenly I could see my way to an answer.

I can’t remember any circuit design now… but I do remember that feeling of being able to push through the fog and discomfort of a problem simply by staying put and looking at it.

And I think perhaps that’s how we can deal with monsters.

Because really, we only have a few choices open to us.

We can turn and walk away.

We can try and go around them… but we’ll probably find that they just move into the path we’re taking or we find new ones in our way.

Or we have a staredown. If we stand their long enough, they’ll get up, shake their heads and walk away.

Perhaps really that’s how we succeed.

Not by being the smartest or the wealthiest or the best connected.

Just by being the one that doesn’t back down.

Cheers,

Karthik Suresh

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Why Do Some People Have All The Power?

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Tuesday, 6.54pm

Sheffield, U.K.

It’s easy to assume the world is the way it is and that’s how it’s going to stay.

It’s hard to imagine an alternative to the status quo. Can you imagine Google and Facebook not being as big and powerful as they are now? Doing a search on any other engine?

Logically – it’s possible, even likely. Societies change, regimes fall and companies disappear. All the time.

But, when you’re in the middle of a situation, whether personal, business or political, it’s hard to see where the change is going to come from.

Which is where power theory may help.

This paper by Oliver E. Williamson says that you need to have three things to grab power in an organisation:

  1. You need to control critical resources.
  2. You need to have early access to information.
  3. You need to be strategically positioned to deal with uncertainty.

Technically – he argues that the most critical part of the organisation will get these assigned to them. So, for example, if marketing is the bit of the organisation that makes the most difference, then it will be given these three things to do.

He also says that power theory is not great at explaining things – it’s a bit of a pied piper – because if you have control, why would you give it up? Why wouldn’t you stop power being taken away from you?

Now… I’m not sure I agree with his dismissal of the concept, because it seems to be useful in explaining both how things are and how they might change. Bear with me.

Let’s say you run a big car company in the US in fifties and sixties. The rest of the world has been devastated by war but the mainland US is unaffected and starts to churn out stuff for the rest of the world, supported by natural resources, a big population and abundant industrial expertise.

You’re in control. You make plenty of money. People buy your cars all around the world. Gas is cheap, so your cars are big and comfortable. You’ve got plenty of political support because of all the people you employ and the politicians you support.

You’ve also got all the statisticians and data analysts and government reports you need to see about the industry. Plenty of information on sales and resources and competitors. Nothing really gets past you.

You have a perfect power triangle – you’re in the strongest shape of your life – and it looks like nothing can ever challenge your dominance.

Until it does.

The Japanese car producers, who you’ve dismissed as makers of small, cheap, tinny cars that the American public will never buy, start to make better cars.

More importantly, however, there is a oil crisis. The Middle East creates a cartel and sends prices sky high. And suddenly all your big cars are hugely expensive to run, you don’t know how to make small economical cars and the Japanese have an opening – and people start to try their cars and like them.

Your problem is that you weren’t strategically positioned to deal with this kind of uncertainty.

And that’s because it’s really hard to predict such a dramatic shift in circumstances, especially when things are going so well.

Let’s take another example.

Microsoft was unchallenged in the PC operating system world. It ran most machines. The rest hardly made an impact.

The thing that they weren’t strategically positioned for was the Internet – and that let Google in.

What this shows us is that power is temporary – it’s a function of control, information and positioning.

At a point in time.

There’s no point in controlling critical resources if they become irrelevant. Just ask the coal industry as it wilts in the face of renewables.

There’s no point in having early access to information, for example through leaks from the government, when the Internet doesn’t give a hoot what politicians think and lets anyone talk to anyone else in the world.

And there’s no point being positioned behind a big wall if there’s a big tunnel forming right under it.

However fixed something seems to be, however powerful the current people in charge appear to be, there’s another power structure forming behind them, invisible to them – but getting ready to replace them.

Let’s hope it’s a better one.

Cheers,

Karthik

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What Does It Mean To Be A Consultant Or Real-Life Researcher?

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Sunday, 6.13pm

Sheffield, U.K

There’s a story about how a Japanese company invented the first bread maker that you could use at home to make one loaf at a time.

No one had managed to create one so far. The way in which bread was kneaded by human hands seemed impossible to replicate with a machine. Perhaps it was just impossible.

So, one of the engineers at the company went to work for a bread maker for several months. He learned how to make bread and spent his time learning all the steps – the mixing, the kneading, the rising and everything else that goes into making the perfect loaf.

Then he went back and came up with a design. In the 1986, 84 years after Joseph Lee patented the first bread machine, the first bread makers for home use were released.

This little story illustrates something about how modern organisations work in real life that we often miss.

On the radio a few days back someone described how all organisations are now information processing machines. That isn’t a new concept, however. The Western approach has always seen companies as machines, as things that can be directed and programmed and controlled.

This is because of how much the scientific approach has influenced everything we see. The success of science in dissecting everything around us and explaining how things work according to laws and rules has made it the natural way to think about things.

Which is why you hear people talking about hypothesis and experiments in the context of startups and businesses. That’s straight scientific thinking. Reductionist and absolute and on a search for truth.

So, when you get consultants, especially those with a scientific or engineering background, coming into an organisation to improve things – you get a very strict, scientific approach to things.

I’m guilty of this. I saw many problems as technical ones – ones that could be solved with the right application of logic, mathematics or programming.

The thing that people like us miss is that human situations are not like scientific ones, especially stuff like physics.

The difference is that when you come up with a theory about how the earth and moon move around the sun, the sun, earth and moon don’t really give a damn what you think and don’t change how they act.

When Trump comes up with a theory about how to solve the U.S trade deficit, you get a global standoff that turns into history in the making.

The difference is what happens when people are involved.

So, as a consultant, you really enter into a real world problem situation carrying some ideas you have, perhaps a framework and methodology that you think you can apply here.

Like the guy learning how to make bread, you also take part in the situation, doing things, working on things, changing things.

The difference between you and everyone else is what happens next.

This action also enables you to reflect on your involvement and learn from what is going on.

Now, you could be an armchair consultant or book writer – advising from a safe distance.

But, almost by definition, what worked for you in another situation is not going to work in this one, because the people involved are different.

You can’t step in the same stream twice.

The Japanese have a view on this – they believe that you learn through direct experience as well as from other sources – learning with your body as well as your mind.

As a consultant, you learn more through experience in the problem situation, because your reflection then lets you pull it all together, perhaps presenting your findings to the company and peers.

Importantly, it also helps you refine your own ideas, framework and methodology, giving you more that you can use the next time.

This model is adapted from Peter Checkland’s writing on action research, and is something many consultants do without realising this is what is actually happening.

Some, unfortunately, are too blinkered to realise that this is how the real world operates and instead try and ram through solutions that are based on reductionist and engineering principles.

Those people… you just have to wait for them to fail and leave.

Real change happens not just with the mind, but when you immerse yourself in reality – the reality of the company you are working with right now.

It’s about being open and prepared to learn, rather than an impartial provider of expert advice.

That’s how you’ll probably fix the real-world problem your client is facing.

Cheers,

Karthik Suresh

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What Do You Do When Things That Are Obvious Are Also Wrong?

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Friday, 8.48pm.

Sheffield, U.K.

I’ve been having a few thoughts about the purpose of this blog.

Why do I write it? What’s the point? What am I trying to do or sell or achieve or become?

The sensible answer, the one that is most Zen, is that writing is a practice. A practice like meditation or learning to play an instrument, or running. When you’re doing it, there is just you and the words and nothing else really matters – not the world, not readers. You write for you.

A different answer is that some of us just have to write – we just do. Anne Lamott, in her book Bird By Bird, writes about famous writers and why they write – because they want to, because they’re good at it – because God made them that way. Whatever works for you.

And then there is another reason – sometimes it’s by writing that we figure out what we think. And it’s by reading other people’s writing that we learn new things. And this whole writing and sharing thing just helps us all get better at dealing with the world around us.

Because… not everything we think is true is.

Like I found out today.

The kids, let’s call them A and B, were arguing over a toy. B had the toy all day and A wanted it now. So, one grabbed it from the other, the dispossessed screamed, there were tears and fighting and lots of noise.

All very normal really.

So, what would you do to make things right? Well… get them to share perhaps? Read both the riot act and tell them that they’ll each get it for a set amount of time and that’s that. Get the timer out and on.

I’ve done that before. Several times.

But, there has always been something odd about the result of this approach. They don’t seem too happy about it. A, in particular, has always been really unhappy about using a timer.

And I wondered why – surely it’s the obvious and fair thing to do – what other way would you go about doing this?

So, I typed these words into Google “why don’t some children like sharing toys using a timer” and came up with a blog article by Heather Shumaker called Throw Away your Timer: Why Kids Learn More when they Don’t “Share”.

Here’s what happens when you tell a child to give up a toy that he or she is playing with because the timer has gone off.

You’re forcing them to give up something when they’re not ready to do so. The good act of sharing that you’re trying to teach is associated with feeling bad as they lose something when they’re not ready.

It’s obvious really. You’d feel cross if someone took something away from you before you were ready to give it up. It’s like being mugged. Hardly a pleasant experience.

Heather says that what you should do is let the child that has the toy keep it until he or she is done with it. Wait till they are ready to give it up willingly as they move onto playing with something else.

The other child will need to learn to wait – and that doesn’t feel great either. Waiting – or deferred gratification – is, however, one of the most useful skills you can teach your child.

That’s the basis of the marshmallow test where kids that could wait when they were small went on to achieve much more later.

So, rather sceptically, I tried this approach. Kid A, who hated timers, was happy with this and let B play with the toy – although a little sad and convinced B would never give it up.

Ten minutes later, however, the two were sat playing happily together and A had the disputed toy.

So… in this experiment this approach worked. And it worked better than the sharing approach which seemed like the obviously correct way to proceed.

So back to the purpose of this blog.

The articles are about stuff that is interesting – to me anyway. Sometimes it’s management, sometimes it’s marketing, sometimes it’s about parenting skills.

There’s a lot of pressure in this world to be defined, to have clean edges, to be very specific about who you are and what your brand is all about.

But the real world isn’t like that. It’s messy and there are weeds and cracks and all kinds of unstructured, undefined and generally messy things.

IBM on LinkedIn said something like 80% of all data will be unstructured by 2020. Well, duh, the vast majority of data must be unstructured now. Think of all the words ever written and films and poems. Structured data is probably a minority of what’s actually out there.

Life is complex and obvious things are not always right.

And I think this blog is just one way to help me figure things out.

And if I’m lucky, like Heather’s article, it might help other people if they happen to have a similar question one day.

Cheers,

Karthik Suresh

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Are You Preparing For The Changing World Of Work?

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Thursday, 9.24pm

Sheffield, U.K.

Of course you are. Why wouldn’t you be?

If you’re running a large organisation, putting the systems in place to help your team work anytime anywhere has been a top priority for your IT team.

It’s also been the priority for the last tech giants for the last decade. And now you can run your entire business from the cloud.

If you’re a newish company, that way of working must just seem natural.

But here’s the challenge, as I see it.

A Google funded study in 2010 found, perhaps unsurprisingly, that collaboration and innovation are closely correlated.

So, encouraging the first should help with the second.

So, how do you go about that? Well, you start by providing the tools that organisations like Google sell – according to them anyway.

And that raises other issues, and perhaps some of these are familiar to you as well.

In most organisations, the balance between having room to create and innovate and the need to be secure and locked down usually ends with everything being locked down.

You’re free to do anything you want, as long as it’s in Microsoft Excel or Google Docs.

And that is increasingly not very much. In the online version of Excel, for example, you can’t really do much with macros or automation. Getting started is harder in Google docs.

Many employees in companies are probably frustrated.

Frustrated because they know what good should look like, but they’re working with tools that are so limited for security reasons that they might as well be working with a typewriter for all the increased productivity they get.

Now, that’s not an easy circle to square. Yes you’d love to give all employees a free rein to do whatever they like. But you don’t want your system crashed or open to anyone, especially someone who decides to delete all your data because they have a grudge.

I know of many organisations that still struggle with simple tasks – like doing a mail merge. They still have to edit and send out documents one by one.

At the other extreme – you have some who say that what you need in a company to be innovative is people that wear t-shirts that say things like “Safety third”.

The first time someone actually has an accident, however, the lawyers will come in and close everything down.

It may be that we’re in the middle of trying to reconcile and understand this new way of working.

Or – more likely – we’ve simply had this problem all the time. How do we get people and machines to work better together.

And the place to start is – we don’t.

Machines are good at repetitive, mechanical tasks.

People are good at creative and social tasks.

We should start by getting machines and people to do what they are good at.

It’s only when we have to get machines and people working together that we should, very reluctantly, put them together.

Does that sound bonkers. Completely unreasonable?

Well… let me ask you this.

If you weren’t able to get to your mobile phone all the time – perhaps you left it at home – just how much more work would you get done without being interrupted?

Cheers,

Karthik Suresh

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What Do You Need To Know To Be A CEO?

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Wednesday, 9.42pm.

Sheffield, U.K.

Would you want the top job – to be in charge – to be the one with the responsibility?

Shakespeare said it best – Uneasy lies the head that wears the crown.

The thing is… even if you never want to be the CEO of a massive multi-billion dollar organisation, you’re still the CEO of something. Your own life. Your family – even if it’s a joint role.

And it’s worth taking the effort to think like a CEO – to think like a person who has the responsibility for making decisions, allocating resources and deciding strategy.

Because… as the saying goes, you’re either working towards your own goals, or you’re working towards someone else’s goals.

So, what are the key things you need to know – distilled from this McKinsey interview guide?

1. What’s your direction of travel?

All strategy comes down to this question – which path are you going to take, which road will you follow?

Is it the one with the footfall, or the one less travelled by?

You can dress this up as vision, mission and lots of other buzzwords, but the first decision you make is to look around and point in the direction that you think is the right one.

2. Where did you start?

You’ve heard the saying, if you don’t know where you’re going, how do you know when you’ve reached there?.

Well, if that’s point 1, the point following closely behind is knowing where you started from.

The ambition of the vast majority of professional managers is to manage their numbers.

They need to set and meet targets – they’re under enormous pressure from the markets and investors and stakeholders and those kinds of people.

Beware of people who always make their numbers. As Warren Buffett wrote, people who always make their numbers will at some point be tempted to make up their numbers.

If you want to make real, meaningful change, you need to be clear on where you started.

That’s your baseline. And that is fixed. Although, as we know from painful experience, nothing is really fixed. A number can be anything you want it to be.

I read a story of a young person who went to his family accountant to be trained. He did the accounts as the rules said, and showed them to the accountant.

The accountant laughed, called his uncle and asked how much profit they wanted to report this year. Then, the accountant reworked the numbers to make that figure work, staying within the rules.

So, perhaps it’s best not to worry too much about accounts.

Cash flow, on the other hand, that’s another thing altogether.

3. Culture – what’s that?

Well, chasing point 2, culture is about the belief system that builds around you as the CEO.

A CEO that encourages gaming, like in the accounting example below, will end up creating an organisation where gaming is considered a normal way of operating.

Bernie Madoff anyone?

On the one hand, creating a good culture is pretty easy – just treat people as they would like to be treated.

On the other hand, it’s a chaotic and constantly evolving function of social groups, and organisations are more about politics than about achieving any real rational purpose.

And because most of us know what we want but find it hard to appreciate what others want, we’re sort of blind to what needs to happen.

But that’s something you can learn by simply opening your eyes and ears. As Yogi Berra said, you can observe a lot by watching

4. Then, it’s all about you

This is simple. What skills are needed to do the top job.

Then, do you have those skills?

5. What do you need if you’re not going to fail?

Many people think that being the CEO is about being the boss – having final say in everything.

That only happens when you also have control – when you’re the founder or have a controlling share or both.

The rest of the time you have people breathing down your neck. You’ve been hired to fix things, or grow the business, or make money. So why aren’t you?

You need to be clear on the non-negotiables, the red lines of your career as the boss.

Do you want final say on hiring? Do you get to tell the Chairman that his or her kid can’t just get a senior job?

You need to be clear on what you need to get the job done – no questions asked.

6. Are you going to make friends with everyone?

As the boss, you’re going to be the face of the company, inside and outside.

You’ll need to be friends with the cleaning crew, the administrators, the consultants, the contractors, investors, shareholders… the whole bunch of people that all want some time or attention from you.

Are you the kind of person that likes that? Or can at least cope with that? Or be really good at that?

You really need to be the kind of person that goes and sees what’s happening at the front line. That mucks in. That has facetime with as many people as you can.

They won’t come to you – you need to go to them. At least that’s what you need to do if you see your job as CEO as serving and enabling your team to do their best work.

Because… when it comes down to it you don’t actually do anything as the CEO – whether you succeed or not depends on whether everyone else around you has the tools and ability and drive to do their best.

So, perhaps the most important thing you should do as CEO is remove the things that get in the way of the people you rely on.

Cheers,

Karthik Suresh

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What’s Going To Happen To Our Investments After BREXIT?

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Tuesday, 10.35pm

Sheffield, U.K.

It’s probably time to start thinking about markets again.

We’ve had years of plenty. Since the lows of March 2009, where the FTSE fell below 4,000, we’ve had steady increase in its valuation.

And, ten years later, seven months from now, the UK will leave the European Union. What do markets think about that?

It’s a strange thought that there are people in work who started after the financial crisis of 2008. For them, the world has only become better.

For those of us who experienced the crisis, it seems like a long road to recovery and now we ask whether we’re going to encounter potholes, speedbumps – maybe a sinkhole or two. What’s going to happen?

Also, what tools do we have to look at what’s going on and what we can do about it?

For a start, too much information is probably a bad thing.

There’s a study by Paul Slovic looking at the relationship between information and effectiveness in decision making.

No information means you’re just taking a punt – your chances of success are pretty random.

Some information, say 5 -10 pieces, results in a decision that is sort of in sync when it comes to effectiveness and your confidence. Say you’re right 22% of the time based on this information and you’re 20% confident – that’s in line.

Much more information will not radically improve your hit rate – your accuracy. But it will dramatically increase your confidence.

And that’s a problem. More information may well make you more confident – but more because you look for information that confirms your biases than what is actually happening in reality.

I don’t really take in much news. On the rare occasions that I do, I’m not sure that I get anything more than a mass of conflicting opinions masquerading as fair and objective journalism.

Let’s go to where the truth is.

And the truth is in the markets. That’s where people show how they really feel about what’s going on.

Two countries, the U.S and the U.K are both pursuing isolationist policies. How are the markets taking it?

Well, the U.S appears to be taking it well. The S&P 500 is on a steady uptrend.

Perhaps the U.S is fundamentally sound. It’s the largest market in the world, with abundant and cheap natural resources. It’ll do just fine on its own.

The U.K is in a less fortunate position. It’s smaller, cannot dictate terms to its neighbours and can’t rely on support from China or further afield.

Its success depends on how well it negotiates and how well it engages with the rest of the world.

And the politicians so far appear to be doing a pretty poor job of it.

Or so the markets seem to suggest. The FTSE is heading down. Lots of euphoria in May, it seems, with a nice bull run, but since June that’s evaporated and we’re seeing a down trend.

I think this is something to watch carefully. It looks like things have turned.

And not for the better.

Personally, from an asset allocation point of view, I’ve ended up being quite UK light – around 8% in the UK actually and 82% U.S weighted with the rest scattered around the world.

I don’t see anything that’s going to make me change my mind yet.

I’m not looking forward to seven more months of this.

Cheers,

Karthik Suresh