Book Summary of ’12 Rules For Living’​ by Jordan Peterson

In life, there is a constant struggle between order and chaos.

As human beings, we crave order and meaning in our lives in order to help us deal with the chaos and uncertainty we face on a day-to-day basis.

In order to help us better deal with the realities of the world we live in, Jordan Peterson (Professor of Psychology at the University of Toronto) gives us his 12 Rules For Living.

Join me for the next 10 minutes as we explore those rules and how you can apply them to achieve the life you’ve always dreamed of.

Rule 1: Stand Up Straight With Your Shoulders Back

Peterson starts off the book by discussing lobsters and how the pecking order is determined at the bottom of the ocean.

Basically, they determine the pecking order by fighting each other. Except, most of the fights are determined before any punches (or claw slams?) are thrown.

When the lobsters come face to face, they size each other up. Most of the time, it’s clear who the more dominant lobster is.

As Peterson describes it, they are easy to pick out of a lobster line-up: they are a cocky, strutting sort of shellfish and they are much less likely to back down when challenged.

Of course, this is a metaphor for how things work in the real world for us. If you walk around with a straight back and your shoulders back, other people will view that as a signal of confidence. People conveying confidence get treated differently than people who convey weakness (slouched posture, shoulders slumped forward).

It’s a virtuous cycle, because the social reinforcement of being treated better will lead you to become more confident.

So, stand up straight with your shoulders back.

Rule 2: Treat yourself like someone you are responsible for helping.

As Peterson points out, most people are better at filling prescriptions for their dogs than themselves. I personally have a dog that is on two medications, one of which is for anxiety and he gets treated as good or better than anybody else in my family.

Why is it that we are willing to take better care of others – even animals – than we are ourselves?

The only answer, Peterson says, is that we don’t believe that we are worth helping.

This is a mindset we must change if we want to get the most out of our lives.

So take a look at your life and ask yourself some simple questions, starting with this one:

“What might my life look like if I were caring for myself properly?”

Then, make a promise to do those things for yourself, no matter what.

Rule 3: Make friends with people who want the best for you.

This rule follows from the previous one. One of the best things you can do to help yourself is to make friends with people who want the best for you.

You can’t choose your family, but you can and should choose your friends.

Here’s a question that Peterson suggests we ask ourselves:

“If you have a friend whose friendship you wouldn’t recommend to your sister, or your father, or your son, why would you have such a friend yourself?”

Instead, surround yourself with people who support you and want to see you succeed. You’ll push each other to do more and better things with your lives and you’ll be there to remind each other to smarten up if you become cynical or when you mistreat yourselves.

In short, good friends will make you a better person and because you want the best for yourself, from now on you’ll choose them carefully.

Rule 4: Compare yourself to who you were yesterday, not to who someone else is today.

This rule (like anything worth doing in life, really) falls into the bucket of easy to say, but hard to do.

Mass media has been giving us distorted views of what “the best” in every field looks like – standards of beauty, wealth, marriage, and so on – for decades.

These days we also need to contend with the constant stream of people posting only the best of their lives to their social media accounts, leaving us all with the distinct impression that it’s hard or impossible to measure up.

As Peterson points out, we are all unique individuals, dealing with unique sets of circumstances in distinct stages of our lives. Because of that, there is no definitive bar that you need to compare yourself against.

Instead, compare yourself to something that you have direct control over – where you are today compared to where you were yesterday.

If you don’t like what you see, make some changes. Today. Not tomorrow.

Rule 5: Do not let your children do anything that makes you dislike them

Nobody likes to think of their children as doing things that make people dislike them and getting a parent to admit – even temporarily – that they don’t like their kids, is almost impossible.

However, it’s true that sometimes your children do things that would make other people dislike them. This is easy to prove. Think back to a time when somebody else’s child was throwing a tantrum, and you thought “I would never let my child act like that in public.”

Peterson gives us sound advice here. Talk to your partner about what you like and dislike about your children. Once you’ve clarified those things, make your children behave like you expect them to.

You love your children, and if you are being honest, there are things that they do you dislike. If their actions have that kind of effect on you, imagine the effect they’ll have on people who don’t love them like you do.

This exercise is ultimately doing your children a huge favour.

Rule 6: Set Your House In Perfect Order Before You Criticise The World

When things go wrong in your life, take 100% accountability for the results.

It’s easy to blame your circumstances or other people for the bad things that happen to you.

This principle has nothing to do with what is fair and just – this is a principle about what works.

Get to work finding the things in your life that you know you should stop doing, and stop doing them. Make peace with your estranged family member before you give other people relationship advice. And so forth.

You can use your own standard of judgement here, and for heaven’s sake don’t waste time questioning things that you know are wrong. Just stop doing them, immediately.

Keep on going until you have your house in perfect order, and then, and only then, turn your attention to criticising the outside world.

The point, obviously, is that it’s more helpful to fix yourself than try to fix other people or circumstances.

A great side benefit is that it’ll help in creating the right level of humility in your life.

Rule 7: Pursue what is meaningful, not what is expedient.

When we focus only on doing what is expedient in the moment, we transfer bad outcomes to our future selves, or even worse, other people.

When we pursue what is meaningful, we often find ourselves doing the exact opposite – giving up something today so that something better might be attained in the future.

Meaning emerges when our impulses are regulated, organised and unified.

The ultimate meaning is to strive to make the world a better place. Not just for you, but for everybody.

Peterson suggests that when we do this, we’ll experience ever deepening meaning. It’s not happiness, or bliss, but something different.

It requires courage and sacrifice to pursue what is meaningful over what is expedient.

Rule 8: Tell the truth. Or, at least, don’t lie

Why not lie?

That’s the question that Peterson poses at the heart of this section.

Why not lie and distort the truth to smooth things over with people, to avoid conflict or hurting people’s feelings?

Because when we do, things fall apart.

He’s not only talking about the lies that we speak out loud, but also the lies that we live out.

He asks us to imagine going to engineering school because our parents want us to, even though we don’t want to.

We start telling ourselves that, yes, in fact, I did want to be an engineer after all. Those little lies require other little lies to prop it up, until eventually, one day, everything falls apart.

Instead, try telling the truth. Be the person you want to be.

Rule 9: Assume that the person you are listening to might know something you don’t.

Here is my favourite line in the whole book:

“You already know what you know, after all – and, unless your life is perfect, what you know is not enough.”

Another way to think about this is that instead of walking around trying to show everybody how much you know, walk around in a continual search for things you don’t.

Quite often the person sitting across the table will surprise you with a golden nugget of wisdom you can take away and use to get better results in your life.

The most effective way to listen is to summarise what people have said to you and ask them if you have understood properly. Sometimes you’ll hit the nail on the head, sometimes you’ll need a small correction and other times you’ll miss the point completely.

The only thing that’s sure to happen when you follow this rule is that you’ll learn something valuable.

Rule 10: Be precise in your speech.

Being precise helps you in many ways.

First, it ensures that you are properly understood. The less you leave for interpretation, in most cases, the better. This is really helpful, for instance, when you are talking about things that are bothering you in a relationship.

Second, being precise about defining problems you are facing turns chaos into something you can deal with.

For instance, Peterson suggests that if we had cancer, we’d want to know exactly what kind it was, where it was, and precisely how we would get it treated. This is the same approach, he suggests, that we should use for any problems we have in life.

Third, being precise in what you want out of life is the best way to ensure that you get it. Once you are precise about what you want, you can go out and get it, correct course when you aren’t making progress and ultimately end up at your destination.

Rule 11: Do not bother children when they are skateboarding.

This section is about how parents these days have become over protective, because we want to protect our children from danger.

As long as you take the right precautions – like wearing a helmet when you are skateboarding to avoid turning your brain into mush – it’s ok to push the limits to see what you are made of. Even if you happen to skin your knees.

We need our children to push their boundaries to see what they are made of. It’s the only way to grow.

We might also consider taking on this advice for ourselves, too.

Rule 12: Pet a cat when you encounter one on the street.

Finally, we need to learn to appreciate the small things in life when they come our way.

Life is tough and much of it consists of figuring out how to get through the suffering.

If you are paying attention, even on your worst days, you just might find some magic. Like, as Peterson points out, a little girl dancing on the street because she is dressed up in a ballet costume. Or when you unexpectedly encounter a friendly cat on the street.

Then, even if it’s only for a few seconds, you’ll understand that moments like those make everything else worth it.

Hope you enjoyed this summary. Leave a comment if you did.

P.S. I need a business coach (willing to train [at my expense] the right individual with some get up and go / sales/ marketing/ business prowess) to facilitate demand for my coaching business. I will cover all start up costs for the right person. If you, or someone you know, is interested, please click http://business-coaching.com/andy/ for more information

Book Summary of ‘Daring Greatly’​ by Brene Brown

Brene Brown starts off her book Daring Greatly with the following quote from Theodore Roosevelt:

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

The rest of the book deals with what it means to be in the ring and dare greatly.

Join me for the next 10 minutes as we explore why daring greatly is such short supply these days, and what we can do to create more of it in ourselves and the people we lead.

**The Problem: A Culture of Scarcity**

Why don’t we have more “people in the ring?”

Brown suggests it’s because we live in a culture of scarcity, which has three distinct components. Here are some questions to consider to determine whether or not you are working in an organisation where there is a culture of scarcity.

1. Shame

Is fear of being made fun of used to manage people and keep them in line? Is the self-worth of the people who work with you connected to achievement, productivity, or compliance? Do you often find people blaming each other for problems? Is name calling an acceptable norm?

2. Comparison

As Brown points out, there’s a difference between health comparison and unhealthy comparison. Is there constant comparing and ranking of people at your company? Are people judged only by narrow standards and not recognised for their unique contributions to the team?

3. Disengagement

Are people afraid to try new things and take risks? In meetings, is it easier for you and others to stay quiet in meetings rather than share stories, experiences or ideas? When you do share, does it feel like nobody is paying attention or listening carefully?

If you answered yes to some or all of those questions, it’s likely that you are participating in a culture of scarcity.

Why are so many organisations like that? It has a lot to do with how we perceive and view vulnerability in our culture.

**Myths of Vulnerability**

Daring Greatly requires us to be vulnerable, which means that we leave ourselves open to uncertainty, risk and emotional exposure.

There are 4 myths of vulnerability that have led us to, as a culture, view it as something to be avoided at all costs.

*Myth 1: Vulnerability is Weakness*

To speak up when we don’t understand. To do push to the edges of our ability to see what we are truly made of, even though we will most likely fail. To share when we are struggling with something so that we can get help.

Unfortunately, in our culture, those things are considered weaknesses. You are supposed to hit your goals, know the answers, and keep a positive attitude at all times.

However, only the strong can admit when they are struggling and push themselves to the limits of their abilities, exposing themselves to certain and constant failure.

Brown knows this from her research, because when people describe what vulnerability feels like, they describe things that look an awful lot like strength instead of weakness:

– Asking for help

– Saying no

– Starting my own business

– Helping my wife with cancer prepare her will

– Saying “I love you” first

– Trying something new

– Getting pregnant after three miscarriages

– Waiting for the biopsy to come back

– Exercising in public when I’m out of shape

*Myth #2: I don’t do vulnerability*

Brown starts off this section with a great quote from Madeleine L’Engle:

“When we were children, we used to think that when we were grown-up we would no longer be vulnerable. But to grow up is to accept vulnerability… To be alive is to be vulnerable.”

It’s easy to tell yourself that you “don’t do” vulnerability – that’s for other people. That’s for children.

But, of course, there’s no way to avoid it in life. As Brown says, we don’t do vulnerability, vulnerability does us.

*Myth #3: Vulnerability is Putting it All Out*

Vulnerability is not oversharing, talking to everybody you meet about your feelings and posting emotional messages on Facebook.

Rather, it’s sharing your feelings and experiences with the people who have earned the right to be in your inner circle. Vulnerability is something to be shared with people you can trust.

As Brown points out, trust is something that is built “one marble at a time,” which is a reference to a concept she calls “The Marble Jar.” Basically, trust is not a single grand gesture, but something that gets built by small and consistent deposits over time – like remembering somebody’s birthday, keeping secrets when you are asked to, and sensing when somebody is sad and asking them why.

*Myth #4: We Go at it Alone*

We live in a culture that celebrates individual achievement. However, vulnerability isn’t one of those things you want to do by yourself.

You’ll need somebody by your side to help pick you up and dust yourself off. You’ll need people that will let you try on different ways of being as you get used to expressing yourself in new ways.

Vulnerability is a team sport.

**Understanding and Combatting Shame**

What’s standing in our way from becoming more vulnerable?

Shame. It’s the intensely painful feeling or experience of believing that we are flawed and therefore unworthy of love and belonging.

It’s the silent killer of hopes and dreams, because it’s the biggest killer of creativity and innovation.

Let’s say that you’ve written an article, designed a product or created a piece of music and you want to share it with your friends or colleagues.

When your sense of self-worth is tied up in how your project is received, one of two things happen:

1. Once you realise (consciously or subconsciously) that your self-worth is tied to how they respond, you are unlikely to share it. Or sand off all of the rough edges of the idea to make it more likely not to be rejected.

2. You do share it fully, and when the reception isn’t what you had hoped, you are crushed. Your shame tells you that it was a bad idea to share your ideas and that “next time we’ll know better than to share our ideas.”

Brown tells us that there are three things that we need to know about shame.

1. We all have it. It’s one of the most primitive human emotions that we experience and the only people who don’t experience it have no capacity for human connection.

2. We are all afraid to talk about shame.

3. The less we talk about it, the more control it has over our lives.

What do we do to combat shame as it shows up in our day to day lives?

1. Recognise shame and understand what triggers it in you. Shame comes along with some physical signs, which only you’ll be able to spot. When it happens, examine what happened immediately before the feeling. What events or messages triggered the shame?

2. Practicing critical awareness. Do a reality check about the events or messages that triggered it. Are the expectations you placed on yourself reasonable and attainable?

3. Reaching out. Share your story with the people in your circle of trust.

4. Speaking shame. When you are connecting with that person, talk not just about the event but also how it makes you feel. Don’t be afraid to ask for what you need in that moment.

**The Vulnerability Armory**

When we were children, we found a lot of different ways to protect ourselves from being vulnerable. From being hurt and disappointed.

We used our thoughts, emotions and behaviour as weapons and how to make ourselves blend in or disappear.

As adults, we have to let go of that baggage so we can be ourselves again. It’s the only way to “be in the arena.”

Here are some of the vulnerability shields we might have used in the past and how we can replace it with Daring Greatly to finally let them go.

*Foreboding Joy:*

It feels safer to feel nothing or wallow in our negative thoughts than it does to be happy and risk being seen. Too much joy equals pain.

The antidote for foreboding joy is gratitude for the happy moments and joyful events in our lives.

*Perfectionism:*

We use perfectionism as a shield by telling ourselves we’ll avoid shame once we get it perfect. Which, of course, we never do.

The antidote is to have compassion for yourself and a sense of worthiness, no matter what circumstance you find yourself in.

*Numbing:*

A glass of wine before going to sleep, occupying all your free time with Netflix and anything else you use to escape from reality on a regular basis.

The antidote is to get in touch with your feelings and to learn how to deal with difficult emotions. It’s the only way to reliably deal with stress.

**Daring Greatly for Leaders**

So, what does all of that have to do with you being a better leader?

Lots.

Through her research, Brown has spoken to thousands of people from all walks of life. As she was asking herself (and the people she was interviewing) what they would want to say to their leaders about the topic of vulnerability, they had this to say, which Brown calls the Daring Greatly Manifesto:

To the CEOs and teachers. To the principals and the managers. To the politicians, community leaders, and decision-makers:

– We want to show up, we want to learn and we want to inspire.

– We are hardwired for connection, curiosity and engagement.

– We crave purpose and we have a deep desire to create and contribute.

– We want to take risks, embrace our vulnerabilities and be courageous.

– When learning and working are dehumanised – when you no longer see us and no longer encourage our daring, or when you only see what we produce or how we perform, we disengage and turn away from the very things that the world needs from us: our talent, our ideas and our passion.

What we ask is that you engage with us, show up beside us and learn from us.

Feedback is a function of respect; when you don’t have honest conversations with us about our strengths and our opportunities for growth, we question our contributions and your commitment.

Above all else, we ask that you show up, let yourself be seen and be courageous. Dare Greatly with us.

So, if that’s what your people want to see from you, what’s the solution?

Brown calls it “sitting on the same side of the table.” Basically, it’s a set of rules to tell you how to be present when you need to give feedback to one of the people under your charge.

Here’s how you know that you are ready to give feedback that creates the environment for Daring Greatly:

– You are ready to sit beside them, rather than across from them;

– You are willing to put the problem in front of both of you, rather than between you.

– You are ready to listen, ask questions and admit that you might not fully understand the issue;

– You what to acknowledge what they do well instead of focussing on their mistakes;

– You want to recognise their strengths and figure out how to use them to find and implement the right solution;

– You can hold them accountable with blaming or shaming them;

– You are willing to own your part of the problem;

– You can genuinely thank them for their efforts;

– You can talk about how resolving the challenges will lead to their growth and opportunity;

– You can model the vulnerability that you want to see in them.

If you are ready to do all that as a leader, you are ready to Dare Greatly.

Hope you enjoyed this summary. As always leave me a comment if you did.

P.S. I need a business coach (willing to train [at my expense] the right individual with some get up and go / sales/ marketing/ business prowess) to facilitate demand for my coaching business. I will cover all start up costs for the right person. If you, or someone you know, is interested, please click http://business-coaching.com/andy/ for more information

Book Summary of ‘Venture Deals’​ by Jason Mendelson and Brad Feld

There are many ways to get funding for your new business. You could try and get a loan from a bank, get paying and profitable customers from day 1 or approach family and friends for some seed capital.

However, in many instances, and for many reasons, you might want to consider raising money from a venture capital firm.

As the authors of Venture Deals point out, fundraising is an incredibly complex topic, made even more complicated by the fact that you’ll probably only go through the process once or twice in your entire lifetime.

Being smart about how you do it, and avoiding the many pitfalls that might come back to haunt you later on, is critical.

Join me for the next 10 minutes as we explore what venture capital is and how to approach it once you decide it’s the path you want to take.

The Players In Venture Capital

If you’ve seen The Shark Tank or Dragons Den, you get the gist. VCs are people who make bets on companies in return for a percentage of the equity in a company. Most of the VCs expect to see a return on their money in 5-7 years, usually in the form of a distribution from the sale of your company.

Venture Capital Firms

When you approach a venture capital firm, you are likely to be introduced to a number of people and it helps to know who is who. We’ll start from the least important and end at the most important:

  • Analysts are at the bottom of the ladder and they crunch numbers and write memos to give to the more important people.
  • Associates don’t make decisions on who to fund, but they do a lot of the legwork when sourcing and structuring deals.
  • Principles and Directors have “deal responsibility,” which means that they are decision makers in the process. However, they usually need formal sign-off on a deal from the people at the top of the food chain, who are…
  • Managing Directors (or General Partners) make the final decisions and typically sit on the boards of the companies they invest in. These are the people who will make the most important decisions.

Not all venture capital firms are created equal, and just like they will be doing due diligence on whether or not to fund your company, you should be doing your due diligence on them.

Here are some questions that you’ll want to ask:

  • Who are you talking to in the firm (referring back to the descriptions above)?
  • What process do you need to go through to get the investment approved?
  • Who else have they funded?

Then, armed with the answers to those questions, go talk to the people they have funded in the past and ask them a lot of questions about what it was like to deal with them.

Angel Investors

Angel investors are typically high net worth individuals who are active in the seed stage of venture capital. These people can range from professional investors, to other successful entrepreneurs, to family and friends.

Angels will typically take a more passive role in the investment, viewing their investment as a lottery ticket that will hopefully one day pay off.

Lawyers

If you are going to do a deal with a venture capital firm, make sure to find a lawyer who has a lot of experience in the area.

Like most areas in the law, you’ll pay a higher per-hour fee for their work, but you’ll ultimately end up paying less overall for better quality work. Mistakes up front in the venture capital process can cost you millions of dollars on the back end.

There are other players in the space that we don’t have time to cover formally like how to deal with syndicates (make sure that all members agree that the lead in the syndicate speaks for the whole), mentors (don’t give them equity), and formal advisors (maybe give them equity).

How To Raise Money

Now that you know the lay of the land, it’s time to cover how to actually go about raising money.

How much should you raise?

The first step is to determine how much money you need to raise. You’ll do this by looking at your monthly burn rate (how much your bank account balance will decrease each month) and determining how long you’ll need in order to get to (a) cash flow positive or (b) your next funding milestone. Add on a few months to that number and that’s how much you should be raising.

You should be approaching the VCs with a specific number and not a range.

Most VCs will not give you the entire amount you are looking for, which means you’ll usually need to find multiple investors in order to generate the full amount.

So, keep in mind that the more of your funding round you already have committed, the easier it will be to close further investors.

Your fundraising materials

VCs get pitched by companies every day, so you’ll need to make sure that you create a pitch that they can digest quickly, while making your case in the strongest way possible.

Here are some things that you should consider creating:

  • An elevator pitch that contains a few paragraphs that you can email to investors if they ask for it.
  • An executive summary of your pitch, which includes information on your product (the problem it solves), the team (why you are the one to solve it), the market (how big of an opportunity is it?) and the financial projections of the business. Keep it between one and three pages.
  • A business plan that shows you grasp the financials of your business. A couple of points here. First, they are not interested in revenue projections, because these are always wrong. Second, make sure you show a grasp of your big ticket expenses and that your funding request has taken them into account properly.
  • A presentation that walks the VC through all of the above during an in-person meeting. Make sure that the slides are well designed and that your presentation includes 10 slides or less.
  • A demo that allows the VC to see your product in action. The demo should tell the story of how it solves your end customers’ problems. Watch the VCs very carefully as they use the product.

The Term Sheet

If all goes well in the pitch process and the due diligence process, you’ll need to get a term sheet created that determines the two most important factors of any deal – the economic terms (who gets what when the company is sold) and the control terms (who controls what in the operations of the company).

The Economics of the Term Sheet

There are a number of items to be aware of when it comes to the economics of the term sheet.

Valuation

The most obvious item is how much the company is worth, which will determine how much equity the investor is getting for their share of the investment.

There are two valuations done here. A pre-money valuation is the company’s agreed-upon worth before it receives the financing and the post-money valuation is the value immediately after receiving the financing. Obviously the statement “invest X at Y valuation” has very different meanings based on whether Y is pre or post money. Make sure everybody is on the same page.

Option Pool

Typically, investors will want to see an option pool of stock that is reserved for future employees you’ll try and get to join your company. This means that you’ll be giving up more equity in the company than just the equity going to the VC.

The VC will typically want to see it in the 10-20% range and will want this to come out of the pre-money valuation so that their % of the company is not diluted in the process.

Liquidation Preference

In many situations, the company is sold for less than the valuation in the funding round. To account for this, they will want to see a clause determining who gets what out of the proceeds.

Typically, the investors will own preferred stock and ask for a clause stating that they’ll get back X times the amount of money they invested (usually X=1) before common stock holders are compensated.

Pay To Play

This is a clause that states that an investor has to participate in a future funding round at a pro-rata basis in order to continue to keep their shares preferred shares. If they don’t participate, their preferred shares get turned into common shares.

Anti-Dilution

Another clause a VC will likely want to see is an anti-dilution clause, which means that if a future funding round is raised at a lower valuation, the total amount of their ownership of the company does not go down.

There are many examples of how these terms could play out in the book that you’d be wise to read in full before going down the VC path.

Control Terms of the Term Sheet

Just like in the previous section, there are a number of things you’ll need to be aware of when it comes to the control terms of the agreement.

Board of Directors

Many VCs will demand a board seat as part of their investment. In a younger company, a typical board configuration might look like this: Founder, CEO, VC1, VC2 and outside board member.

The founder and CEO seats are from inside the company, the VC seats are from the VCs, and the outside board member is there to resolve any disputes between the two.

When the company grows and the board matures, you’ll typically see 7-9 seats with the additional seats coming from the outside and usually in the form of experienced executives from the same domain.

Protective Provisions

These types of provisions are designed to give the VCs the ability to block certain company actions that would harm their interests in the company.

Some examples would include changing the company by-laws, selling the company, paying dividends, purchasing major assets and changing the stock option plan.

When you are negotiating these terms, try and get all of your investors to agree to the same protective provisions and try and stay away from the term “materially” because it is usually a legal rabbit hole (as in, nobody knows exactly what it means).

Drag-Along Rights

These provisions allow a majority shareholder to force a minority shareholder to join in the sale of the company, as long as the minority shareholder gets the same price, terms and conditions that the other sellers get.

In the beginning, this clause will be protecting the founder, but don’t lose sight of the fact that you are negotiating this on behalf of the company, which in the future might have a different majority shareholder (it’s not uncommon for founders to give up the majority of their equity in future funding rounds).

Other Terms

There are other terms that will likely be in the term sheet that you should be aware of, including:

  • Dividend provisions: these are more common when dealing with private equity transactions. VCs typically aren’t looking for dividends from their investments.
  • Information rights: these clauses will determine what information the VC has legal access to and what timeframe you have to deliver it to them when requested.
  • Right of first refusal: these clauses give the VC the right to participate in future rounds. You should only give this to major investors.
  • Founders activities: unless you are a very experienced founder, there will be a clause in the agreement saying you need to focus 100% of your time on the company (i.e. you can’t treat it as a part-time job).

Conclusion

There is a lot to think about and consider when raising money from a venture capital firm. Spending the time up front getting the details right will save you a lot of time and money in the future.

If you are seriously considering going down the VC path, I strongly suggest you buy the book and take a deeper dive into the details.

Hope you enjoyed this summary. As always leave me a comment if you did.

P.S. I need a business coach (willing to train [at my expense] the right individual with some get up and go / sales/ marketing/ business prowess) to facilitate demand for my coaching business. I will cover all start up costs for the right person. If you, or someone you know, is interested, please click http://business-coaching.com/andy/ for more information

Book Summary of ‘Rethinking Positive Thinking’​ by Gabrielle Oettingen

Rethinking Positive thinking is about what you want out of life and how to achieve it.

The author, Gabrielle Oettingen, has been studying this topic for over twenty years and has an interesting and startling conclusion: that the obstacles that we believe get in our way from achieving our greatest goals can actually help us accomplish them faster.

Basically, her research shows that merely dreaming about the future makes it less likely that you’ll achieve your deepest desires and dreams.

Join me for the next 10 minutes as we explore why this is the case, what you should be doing, instead.

What Is Positive Thinking

Let’s start out at the beginning by defining what positive thinking actually is.

Martin Seligman – the founder of the positive psychology movement and the author of Authentic Happiness – defines positive thinking as beliefs or expectations about the future that are based on past success.

Notice the part about “based on past success,” which much of the literature on positive thinking wilfully ignores. You can’t just sit in your chair, think nice thoughts, and expect your dreams to become true. This sounds too obvious to mention, but many of the most popular books on positive thinking will teach you just that.

Seligman had performed plenty of studies that showed a direct correlation between positive expectations when the condition of past success was present.

That led Oettingen to conclude that there are two types of optimism worth studying – positive expectations based on past experiences of success and the more free-flowing thoughts that we might simply call desires.

So, Oettingen decided to test out that theory using a wish that a good portion of the population makes every year on or around New Year’s Eve: to lose weight.

She performed a study involving twenty-five overweight women who were enrolled in a weight loss program. She had some of them think about successfully completing the weight loss program and had others think about the struggles they would invariable face along the way.

Surprisingly (but not to us, since we already gave away the punch line in the introduction), the women who fantasised about their success lost on average twenty-four pounds less than the women who imagined their struggles.

This study was performed back in 1991 and nobody in the psychology community wanted to dive any further, because so much attention and effort in the general population focussed on the power of optimism.

Undaunted, Oettingen continued her deep dive into the subject and performed study after study that showed the same thing – that unwarranted optimism doesn’t help people achieve their goals – in fact, it gets in the way.

The Upside of Dreaming

As Oettingen points out, not all positive dreaming is bad. There are certain situations where it actually helps.

The first situation is when the tasks are simple. The simpler the task, the more your positive fantasising helps. Why? Simple tasks don’t present many obstacles from achieving them. If I fantasise about how good it will feel to finally clear out the garage, I can just get to work and get it done without much hassle.

The second situation where it helps is when you are waiting for some result that is out of your control. For instance, if you are waiting anxiously for some medical test results to come back, positive dreaming will help get you through that time in a much more peaceful and calm manner. Basically, you can use positive dreaming to relax.

The third situation it helps in is allowing you to explore potential wishes without requiring you to make a commitment. This is helpful when you are determining what you actually want – as long as you realise where the benefits start and stop.

The Downside of Dreaming

Now that we’ve covered the upsides, which are much less numerous than you might have hoped, let’s cover the downsides.

There are three main reasons.

The first is a consequence of one of the benefits we mentioned in the previous section – that you become relaxed when you fantasise about the future. That relaxation will help you get through a difficult or tedious set of circumstances, but it will not help you actually achieve the content of your fantasy. That’s because your mind is fooled into believing that you’ve actually accomplished it, and thus leaving you with less drive to actually make it happen. Bummer.

The second reason follows from the first – that positive fantasies make you especially unfit to handle hard tasks that require concerted effort. That’s because your fantasies rob you of the energy required to do difficult tasks.

The third and final reason is that your positive fantasies lock you into a cycle of dreaming, without ever exploring whether or not your dream is feasible – which, of course, would require more energy than you have right after the fantasy.

Mental Contrasting

Luckily, it’s not all doom and gloom. Oettingen started looking for a better way to help people reach their goals and dreams and found it in what she calls Mental Contrasting.

It’s a fairly simple process – right after you have the positive fantasy about whatever you want to achieve, you immediately jump into visualising the challenges and obstacles that you’ll face in achieving it.

This would short-circuit the negative effects that your fantasy might otherwise have (relaxing you and sapping you of the energy you need), and get you into action on eliminating the obstacles.

So, she set about pulling together an experiment that would see if this hypothesis was true.

She brought together 168 female students at universities in Berlin, asked them all to think about a goal they wanted to achieve, to create a list of benefits of achieving the goal, and a list of obstacles they would face along the way.

Then she separated them into four groups:

  • The first group thought first about the benefits of achieving the goal and then the obstacles they would face;
  • The second group only thought about the benefits of achieving the goal;
  • The third group only thought about the obstacles that got in their way; and
  • The fourth group thought first about the obstacles they would face, and then the benefits of achieving the goal.

The results were in one sense disappointing, and in another sense very exciting.

The disappointing part was that only some of the people who used the mental contrasting method showed significant improvements energising towards accomplishing their goals.

The exciting part was that the people who showed the improvement were the people who actually believed they could do it. This means that the method only gets people energised towards accomplishing goals that have a high chance of success.

Why Mental Contrasting Works

Mental contrasting works for a number of reasons:

  • It gets your unconscious brain working on your obstacles. What you do by using this method is create a link between your goal and the obstacles you think you’ll face.
  • It gets your brain thinking about the behaviours required to overcome the obstacles. This means that when you think of your goal, you’ll also think of what you need to do in order to overcome them.
  • You do a better job of processing negative feedback. When you expect there to be obstacles, they become less daunting – they are now just “one more thing” to overcome to achieve your goal.

Implementation Intentions

While Oettingen was doing her research on mental contrasting, her husband, Peter Gollwitzer, was performing research on an equally fascinating topic called implementation intentions.

In it’s most basic form, an implementation intention is a plan detailing exactly how and exactly when you intend to take an action – in this case, how we plan to achieve our goals and overcome our obstacles.

There have been multiple studies in multiple fields that all confirm the same thing – that having an implementation intention significantly increases the odds of completing a task or reaching a goal.

The most famous study in the implementation intention literature focussed on exercise. In particular, three groups of people were asked to exercise at least once in the following week. At the outset, they were given different instructions:

  • The first group was the control group and they were simply asked to exercise the following week.
  • The second group was given a motivational speech highlighting the benefits of exercising and the dangers of not.
  • The third group was asked to make an implementation intention – to tell the interviewer exactly where and when they would work out.

When the results came in, they found the following:

  • In first group, 38% of people exercised.
  • In the second group (the motivation group), 35% of people exercised.
  • In the third group (the implementation intention group), 91% of people exercised.

Fascinating, right? Study after study has shown that our traditional thinking on the topic – that people simply needed more motivation – is simply not true.

Rather, if you determine exactly what you need to do and exactly when you will do it, the resulting improvement is dramatic.

WOOP: Putting It All Together

Excited by the findings in both mental contrasting and implementation intentions, Oettingen found that the combination of both of them together was even more powerful than either of them on their own.

The original name for this newly combined method was MCII – not a terribly catchy name. She found that when she explained the method using plain English, that it spelled out WOOP – not a real word, but much more catchy nonetheless.

WOOP stands for:

  • W = Wish
  • O = Outcome
  • O = Obstacle
  • P = Plan

Here’s how it works in practice, which is something you can do anytime you have a wish or a goal you want to accomplish.

First, grab a blank piece of paper. On it, write down your wish or goal in three to six words.

Second, identify what you believe the best possible outcome of achieving that goal will be. Try and keep it short – between three and six words is best.

Third, let your imagination lead the rest of the exercise by writing down every obstacle you think you’ll face on your way to achieving that goal.

Lastly, for each of the obstacles, write down one specific action you can take for overcoming them. Make it in the form of an implementation intention by naming the time and place you believe the obstacle will happen and what you will do when it does.

Then, get to work!

Conclusion

WOOP is a powerful process you can use get better at achieving your hopes and dreams.

The benefits are many, including the fact that it will force you to be hyper-realistic about your goals and be action-minded in your approach to achieving them.

This might be less exciting and sexy than other books that tell you that you can use the power of your thoughts to manifest whatever you want in your life, but you are going to enjoy the outcome much, much more.

Hope you enjoyed this summary. As always leave me a comment if you did.

P.S. I need a business coach (willing to train [at my expense] the right individual with some get up and go / sales/ marketing/ business prowess) to facilitate demand for my coaching business. I will cover all start up costs for the right person. If you, or someone you know, is interested, please click http://business-coaching.com/andy/ for more information

Book Summary of ‘10% Happier’​ by Dan Harris

Dan Harris originally wanted to title this book The Voice In My Head Is an A-hole.

Throughout his career as a journalist and reporter, he – along with most of us – found that the voice in his head started as soon as he opened his eyes in the morning and then, pretty much all day long, it heckles us with thoughts of the past and the future, much to the detriment of whatever we are doing in the present.

Though he didn’t find the path to enlightenment, he did find that a number of things he did – when done together – made him about 10% happier.

Where does 10% come from? Basically, what you are about to learn made Harris a much happier and more productive person, but he didn’t have a transformational experience that led him to a state of 100% bliss. So, finally, to explain why he now spends so much time focussing on mindfulness and practicing meditation, he says it’s because it makes him 10% happier. A totally unscientific number, but one that completely explains why he does what he does.

If you can quiet the voice in your head for the next 10 minutes, join me on a journey towards becoming 10% happier in everything you do.

The Voice in Your Head

One of the defining moments in Dan Harris’ career was when he had an on-screen meltdown. After years of nailing his on-screen time at ABC, he had a full-blown panic attack in front of millions of people.

It was the culmination of years of stress caused by the endless chatter in his mind. How many stories did he have on the air that week? What was the state of his relationship with his boss (the legendary Peter Jennings) right now? What else did he have coming up that might catapult him ahead of the other people vying for the plum jobs that were soon to open up?

That was his first step on the path to discovery. That in order to prevent that from happening again – which would surely be the end of his on-air career – he would have to find a way to quiet the voice is in his head.

He started to read books that he never would have even glanced at before, like Eckhart Tolle’s The Power of Now. He was intrigued enough about the ideas in the book that he tracked Tolle down for an interview.

The problem, Tolle said, is our ego. The ego is our inner narrator and it is never satisfied. No matter how many creature comforts we accumulate, how many gourmet meals we consume, or how many rungs we climb on the career ladder, it always wants more.

One of the biggest problems our ego presents is that it is a comparison machine. It is always comparing itself to others. That explains why we are always measuring ourselves agains the looks, wealth and social status of others.

Finally, and perhaps worst of all, it does all of that while thinking about the past and the future. As Tolle points out, we “live almost exclusively through memory and anticipation.”

Which is a real problem, because the only time that we ever have, in the literal sense, is now.

The biggest insight that Harris pulled from his time researching people like Tolle and scientists doing rigorous research on the human mind, was that your brain can be trained.

Happiness, therefore, is a skill.

Mindfulness

Once you get on the path to finding happiness, you almost always find your way back to the idea of mindfulness and thus, the precepts and ideas of Buddhism.

According to Buddha, we have three natural responses to everything we experience in our lives – we want it, we reject it, or we zone out.

Butter tarts – a fine Canadian dessert hard to find south of the border? Want it. Flies in the house because somebody left the front door open? Reject it. The latest celebrity gossip? I zone out.

Everybody has their own ways of reacting to things, but they all find themselves neatly into one of those three buckets.

However, there’s a fourth option beyond judging an experience that is even more helpful – mindfulness. Here’s a formula that one of the mindfulness teachers taught Harris, neatly tied together by the acronym RAIN: Recognise, Allow, Investigate, Non-Identification.

To walk through this process and see how it works, let’s pretend that you’ve just had a stressful experience, like getting turned down for an important promotion at work.

R: Recognise

The first step would be to admit that you’ve just had a stressful experience and you are in the midst of all of the emotions that come along with it.

A: Allow

The next step is to “lean in” to the experience. The goal with mindfulness isn’t to detach ourselves from the world, but to be fully present to it. Don’t resist the experience or emotions you are feeling. Let them happen.

I: Investigate

In this step we start to pay attention to how the experience is affecting us, in the moment. Start by examining your body. Is your face flush? Is your head throbbing? Is your breathing short and shallow? Almost every emotion comes along with clear physical signs – your job is to get familiar with them.

N: Non-Identification

In this last stage we consciously bring to mind the fact that just because right now we are angry and jealous at being passed over, it doesn’t mean that we are angry and jealous people.

Once you’ve gone through the RAIN cycle of truly being present to your experiences and feelings, you can finally let it go and move on to experience whatever comes next – like getting back to work so that the next time a promotion comes up, you get it.

As Harris continued his journey of discovery, he started to go deeper and deeper into what helped him become a happier and more productive person.

He boiled what he learned into 10 principles he calls The Way of The Worrier.

The Way of The Worrier

TWOTW #1: Don’t Be a Jerk

One of the great things about Harris’ job is that he gets access to interview people that most of us would only dream of breathing the same air as.

One of the people on that list is the Dalai Lama and one of the biggest lessons he learned from him was that putting ourselves first was a natural human tendency.

As it turns out, the Dalai Lama taught Harris, practicing compassion towards others will actually make you a happier person. Scientists performing brain scans showed that acts of random kindness towards others registered more in the brain like eating chocolate than fulfilling an obligation.

So, don’t be a jerk. Not because it’s the right thing to do, but because it will make you happier.

TWOTW #2: (And/But . . .) When Necessary, Hide the Zen

The Sufi Muslims have a saying: “Praise Allah, but also tie your camel to the post.” In other words, while there are plenty of practical reasons to be nice to other people, don’t let the world walk all over you.

This is harder than it first might seem. Combining a true inner peace while still getting things done in a cutthroat environment takes practice.

TWOTW #3: Meditation

Meditation has been linked to a ridiculously long list of benefits and is now being used to treat major depression, drug addiction, binge eating, stress among cancer patients, and ADHD.

The easiest way to get yourself on the mediation path are to follow the instructions that Harris was given when he first started.

First, sit comfortably, ensuring that your spine is relatively straight.

Second, notice what you feel when your breath goes in and out. Focus on one spot like your nostrils or chest. If you find yourself getting distracted easily, use a mantra like “in” and “out.”

Finally, whenever your attention wanders (as it inevitably will) forgive yourself and bring it back. What you are essentially practicing is (a) noticing when you are not being present, and (b) brining your attention back to the here and now so that you can be present.

Even doing this for a few minutes a day will make a noticeable improvement in your life.

TWOTW #4. The Price of Security Is Insecurity—Until It’s Not Useful

Some things are worth worrying about, and some things are not. Harris tells us that separating them from one another is one of your key tasks as you start your journey to become 10% happier.

This is where he departs from the wisdom of some of the gurus he learned from, and where you might find solace in the fact that you don’t need to spend your life in a state of bliss in order to benefit from mindfulness and mediation.

When you find yourself worrying about something, stop and ask yourself this simple question: “Is this useful?”

For instance, in business you are wise to be worrying about how to generate more customers or lower your costs when you need to generate more profit. Worrying about things that aren’t important and you can’t influence are things that you can leave to the chumps.

TWOTW #5. Equanimity Is Not the Enemy of Creativity

The quest towards happiness will not make you a blissed out zombie. There’s a myth that all creative people find their biggest inspiration in melancholy.

There’s no current research on this one way or the other, but an equally strong case can be made that once you are freed from useless worrying, you can channel your creativity more often and more effectively.

It’s a lot easier to come up with creative solutions to problems when your head isn’t filled with worry and dread.

TWOTW #6: Don’t Force It

Somewhere on your journey you’ll find yourself finding time for purposeful pauses, and realise that not everything can be solved through constant, unrelenting pressure.

Just like you can’t open a jar when all of the muscles in your body are tense, you can’t solve every problem in your life through sheer force.

TWOTW #7: Humility Prevents Humiliation

When the voice in your head isn’t busy worrying you to death, it’s busy telling you how great you are.

This causes you to make just as many bad decisions as worrying about things you can’t control. As a leader, this can very easily get in your way of producing the results you want to achieve.

So whenever you find yourself thinking those types of thoughts, follow the RAIN process and let them flow right through you.

TWOTW #8: Go Easy With The Internal Cattle Prod

The third main job of the ego (beside worrying and telling you how great you are) is to beat you up with self-criticism.

Many people are driven by their inner cattle prod, thinking that it’s the only way to achieve greatness in their business and life.

However, Harris points out that the people training in self-compassion mediation are more likely to do things like stick to a diet and quite smoking. Why? They are much better at bouncing back from missteps.

A much better approach is to learn from your failures than beat yourself up with them.

TWOTW #9: Non-attachment to Results

Have you ever found that life doesn’t always work out the way you think it should?

This is about coming to the realisation that striving for results is fine, but that the final outcome is out of your control. Do everything you can to succeed and then be fine with letting the chips fall where they may.

This ensures that when you fail (as you inevitably will), you’ll be able to dust yourself off and get ready for the next round.

TWOTW #10: What Matters Most

This entire list becomes a lot easier when you are crystal clear on what you want in your business and life. Instead of just following your ego – which always just wants “more” – get your head straight on what’s most important to you.

What do you really want?

Hope you enjoyed this summary. As always leave me a comment if you did.

P.S. I need a business coach (willing to train [at my expense] the right individual with some get up and go / sales/ marketing/ business prowess) to facilitate demand for my coaching business. I will cover all start up costs for the right person. If you, or someone you know, is interested, please click http://business-coaching.com/andy/ for more information

Book Summary of ‘How Will You Measure Your Life’​ by Clayton Christensen

Clayton Christensen is an expert in innovation, a professor at Harvard Business School and a former student there.

In the beginning of the book, he recounts how many of the people from his graduating class went on to very successful careers at very large companies, earning for themselves in the process very large incomes.

However, he found that many of those same people didn’t enjoy their work, had very poor relationships with the most important people in their lives and some of them were even in jail.

Personal dissatisfaction, family failures, professional struggles and even jail – not the things you expect of graduates from the most prestigious business school on the planet.

Christensen wanted to make sure that future graduating classes at Harvard didn’t succumb to the same fate, and so he started spending the last few days of his class discussing how to avoid it.

He writes three simple questions on the board to guide the discussion:

How can I be sure that:

  • I will be successful and happy in my career?
  • My relationships with my spouse, my children, and my extended family and close friends become an enduring source of happiness?
  • I live a life of integrity – and stay out of jail?

And as you might have guessed, these are the things that we’ll cover here today in this summary.

Let’s get started.

What To Think vs. How To Think

Christensen starts off the book by telling a story about a visit he made to Intel and it’s then CEO Andy Grove.

Christensen had just released his first book, The Innovator’s Dilemma and Grove wanted him to come to Intel and explain the theory to his executive team. When he arrived, Grove informed him that he only had 10 minutes because “some stuff had come up.”

“Tell us what your research means for Intel, so we can get on with things.”

Christensen said that he couldn’t do that, because he knew very little about Intel. The only thing he could do, he said, was explain the theory and then help walk the team through the thinking so they could figure out the implications on their own.

Grove reluctantly agreed and they went on to very quickly come up with the strategy for going after the bottom of the market and launched the lower-priced Celeron processor.

The analogy here applies to your own life. Your goal in finding help – whether it’s through books, courses, or any other kind of personal development – shouldn’t be to blindly copy what another person did in a particular circumstance.

Instead, your goal should be to understand the theory that led them to that conclusion or action, so you can see how it applies to your specific set of circumstances.

With that being said, let’s move on to the theories that can help you be successful in your career, have great relationships, and stay out of jail.

Finding Happiness in Your Career

Finding success and happiness in your career isn’t about making the most money or having the most prestigious title. Nor is it about having the next five years of your life nailed down to the minute, or flying by the seat of your pants.

There’s a delicate balance between being deliberate and being open to new opportunities. Let’s explore some of what science knows about the topic.

Motivation and Hygiene Factors

Christensen tells us that it’s impossible to have a meaningful conversation about happiness without an understanding of what makes us tick. As it turns out, most human beings don’t understand the true nature of their motivations – and thus, themselves.

First, let’s dispense with the idea that making a certain amount of money is going to make you happy. This is what Frederick Herzberg (an expert on motivational theory) would call a hygiene factor – something you need to get right, but it isn’t enough to get you to the happiness finish line. It’s necessary but not sufficient.

Other hygiene factors include a safe and comfortable working environment and good working relationships with your colleagues.

To put it bluntly, hygiene factors won’t do anything to make you love your job, they’ll just stop you from hating it.

Second, there are things that will truly and deeply satisfy you. These are the things that Herzberg calls motivators. Things like challenging work, recognition, responsibility, and personal growth. These are things that are happening inside of you rather than things that are happening to you (like salary and titles).

So, whenever you are contemplating a move in your career, ask yourself the following questions:

  • Is the work meaningful to me (note: it needs to be meaningful to you – that other people find it meaningful doesn’t matter here)?
  • Will the job give me a chance to develop?
  • Will I learn new things?
  • Will I have an opportunity for recognition and achievement?
  • Am I going to be given responsibility?

Those are the things that will truly bring you happiness and a feeling of success.

Balancing Calculation and Serendipity

When should you be open to new experiences and when should you stick to a deliberate plan?

There’s a tool in business called “discovery-driven planning” that asks you to list all of the assumptions you’ve made in creating a plan of action, and ensure that they have been properly taken into account. For instance, any sales forecast is going to assume some things about their customer retention and renewal rate.

Before you take a job, you can use this approach by carefully listing out what others are going to need to do or deliver so that you can successfully achieve what you hope to in a role. Are there any factors that aren’t in your control? Are there any items on the list that have a low probability of occurring? These are the things you need to be on the lookout for.

Aligning Your Time, Money and Energy

Once you start to get a clear picture of what success and fulfilment looks like for you, you have to ensure that you put your time, money and energy towards those pursuits.

One of the mistakes that humans often make is to unconsciously allocate resources to the things that yield the most immediate and tangible accomplishments.

As an example, many people prioritise things like a promotion, raise or a bonus over things that require long-term work to see a return, like raising good children.

Be on the lookout for that tendency in your own decision making so that you can balance every part of your life.

Which brings us to the next section…

Finding Happiness in Your Relationships

Christensen tells us – rightfully so – that the relationships we have with family and close friends are going to be the most important sources of happiness in our lives.

Putting them on the back burner – no matter how important something seems at the time – is a big mistake. By the time we realise that there are serious problems in a relationship, it’s often too late to repair them.

Here’s how to ensure that it never gets to that point.

Relationships and Time

Here’s the most important principle to remember about your relationships:

Don’t sequence your life investments.

Good relationships need consistent attention and care. There will always be an ebb and flow of how intense that attention can be, but it must always be there, never running on empty.

There are two forces that will work against you here.

First, it’s tempting to invest your time, energy and money into things that give you an immediate payoff. Like that promotion at work, or that next big project that needs your full attention for weeks at a time.

Second, your family and friends will almost always be supportive of you. After all, they are human and fall into the same short-term thinking that you do.

You must guard against this, and put in the time and effort into the things that will help nourish those relationships on a regular basis.

Which brings us to the next section, where we explore what those things should be.

What Did You Hire That Milkshake To Do?

One of Christensen’s more popular theories about innovation is Jobs To Be Done.

As the story goes, a very popular fast food restaurant hired Christensen and his consulting firm to figure out how to sell more milkshakes.

The restaurant had tried to do it on their own, but had failed. They were asking what they thought were good questions – how can we improve our milkshake? Make it chocolatier? Cheaper? Chunkier? etc. Sales and profits remained flat.

But Christensen’s team asked a different question – “what job arises in people’s lives that causes them to come to this restaurant and “hire” a milkshake?”

They found that half of all milkshakes are sold in the morning, the people buying them were almost always alone, it was the only thing they bought and they did it through the drive-through.

As it turns out, those early morning customers had a long and boring commute ahead of them and they wanted something they could hold in one hand, wouldn’t make a mess and would last a long time. Milkshakes ticked all the boxes.

Improving the milkshakes from there was easy – making it last longer and adding some fruit pieces to create the element of surprise every once in a while were they keys.

Jobs To Be Done in Relationships

If you want to find the key to strong and healthy relationships, you need to figure out the jobs that need doing in their lives.

These things will vary from relationship to relationship and the key is to listen to the other person deeply to find out.

In the areas of your life where you can choose your relationships, you’ll want to look for somebody who you want to make happy – somebody you find yourself wanting to sacrifice for.

As Christensen points out, if falling in love is the ultimate understanding of each other’s jobs to be done, then what cements that commitment is the extent to which you each sacrifice themselves to make it happen.

When It Comes to Children

Not all of you reading this will have children, but many of you do or soon will.

We all want to give our kids the best opportunities to succeed in life. It’s up to us as parents to impart the same wisdom that we are learning from Christensen so that they can find success themselves.

In order to accomplish that, we need to equip our children with three specific things:

  • Resources: these are the time, money and energy resources they have at their disposal.
  • Processes: these are what your child does with the resources they have.
  • Priorities: these are the things that your child will focus on and devote their resources and processes to.

Of course, none of this comes naturally to them – they’ll have to put together the right string of experiences in order to get the most out of life.

Children need to learn how to solve difficult problems on their own – just like they’ll have to do when they grow up. Make sure your children are challenged and when the challenges arise, be there as a parent to help them work through them.

You can think of your role as a parent as putting together the “courses” of experience that will help prepare them for the world that will be waiting for them as adults. Figure out what skills they’ll need in the future, and then set up the right experiences and challenges for them.

Here are just a few things that they’ll encounter that will be great teaching moments for you:

  • dealing with a difficult teacher;
  • failing at a sport;
  • learning to navigate cliques at school;

These are experiences that will prepare them for the real world. Your job is not to figure out a way for them to avoid those types of situations, it’s to prepare them for how they should deal with them when they (invariably) come up again in the future.

Staying Out of Jail

We end this summary by looking at what it takes to stay out of jail, or at least to lead a moral and good life.

As Christensen points out, all of us are very confident that we’ll do the right thing when we find ourselves in the big “moments of truth.”

However, life usually doesn’t work that way. These “moments of truth” are usually not “moments” at all, but a long string of everyday decisions that accumulate over time.

The trick to avoiding going down the wrong path is to avoid the “just this one time” approach to decision making.

Following your own personal rules (or principles, or core values, or whatever you want to call them) 100 percent of the time is a lot easier than 98 percent of the time.

Christensen ends the book with a powerful line, which is exactly where we’ll end this summary:

Decide what you stand for and then stand for it all of the time.

Hope you enjoyed this summary. As always leave me a comment if you did.

P.S. I need a business coach (willing to train [at my expense] the right individual with some get up and go / sales/ marketing/ business prowess) to facilitate demand for my coaching business. I will cover all start up costs for the right person. If you, or someone you know, is interested, please click http://business-coaching.com/andy/ for more information

Book Summary of ‘Radical Candor’​ by Kim Scott

Author Kim Scott has seen a lot during her career. She’s run startups, worked at Google for Sheryl Sandberg and worked at Apple at their famed Apple University.

Along the way she’s made her share of mistakes, but has also picked up what makes leaders at companies like Google and Apple so successful.

She calls this leadership style Radical Candor, and in the next 10 minutes we are going to explore exactly what it means and how you can use it to become an even more effective leader.

What Managers Are Responsible For

To set the stage, let’s first take a look at what leaders and managers are actually responsible for.

As Scott points out, bosses are ultimately responsible for the results that their teams create and, because you need to get the work that creates the results done through people, the role of a boss is to guide a team to achieve results.

Getting that done requires three separate things.

First, managers are responsible for guidance. This mostly comes in the form of feedback, which after years of having it done to us (or by us) poorly, is something that most people have come to dread.

Second, managers are responsible for team building. Work gets done through people, and the dynamics of the team you build has a lot to do with the results you get. If you build a great team, you get great results.

Third, managers are responsible for creating results.

What those three responsibilities require, Scott says, is strong relationships. Which is where Radical Candor comes in.

What Radical Candor Is

Radical Candor = “Care Personally” + “Challenge Directly.”

Let’s unpack that formula.

First, caring personally is all about doing the things that you already know how to do in your personal life – and brining it to work. Like acknowledging that the people you work with have lives and aspirations that extend outside of work. Like making time for real conversations that help you get to know one another at a human level. Like having a deep understanding of what makes the people on your team want to get out of bed in the morning.

Second, challenging directly is all about challenging others and telling people when their work isn’t cutting it. Like delivering hard feedback when it’s necessary. Like making the hard calls about who does what on your team. These are the things that you know you should be doing, but most people have trouble doing because it’s incredibly uncomfortable – for you and the other person.

Rare is the person who can put both of those two things together in the same package, but if you are a leader, that’s exactly what you are called to do.

What’s waiting for you on the other side is not a team that is angry and full of resentment, but a team that is grateful for the chance to finally talk through the real issues at stake.

What Radical Candor Is Not

Before we move on to the specifics, we need to go over what Radical Candor is not and what happens if you get the equation wrong.

Caring personally is not about schmoozing, or about turning introverts into extroverts. It’s about understanding the people on your team so that you can get the best out of them.

Challenging directly is not about being a jerk and it’s not an invitation to nitpick. As Scott points out, it takes a lot of energy from both you and your team, so only use it for the really important stuff.

When you fail in the Caring Personally department, you end of with Obnoxious Aggression. Unfortunately, if you can’t pull off Radical Candor, this is the second best option for you as a leader.

When you fail in the Challenge Directly department, you get Ruinous Empathy. This is when you let poor performance slide. It usually ends up with people being blindsided when they ultimately need to be let go.

Finally, when you fail in both you get Manipulative Insincerity. This is when you don’t care enough about the person to challenge them directly and any praise or criticism you do give is fake and aimed at gaining some sort of political advantage at work.

Now that we’ve covered what Radical Candor is and what it isn’t let’s move on to the specifics of getting it done.

Understanding What Motivates The People On Your Team

Your first step is to truly understand what motivates the people on your team.

The Three Conversations

Scott gives us three conversations we can have with each of the people on our team in order to start our journey of discovery.

The first conversation is about the life story of your team member and is designed to learn what motivates them. Start with the following request, and then let the conversation unfold: “Starting with kindergarten, tell me about your life.” As the conversation progresses, focus on the changes your team members made in their lives and try to understand why they made them. Values often become very clear during moments of change.

The second conversation moves from understanding what motivates your team to what their dreams are. This is about finding what they want to achieve at the pinnacle of their career. The word “dream” is intentional – steer clear of clinical corporate speak like “long-term goals,” “five-year-plans,” and so on. After this conversation, ask each of your direct reports to create a simple spreadsheet with three to five columns, filled in with the dreams they brought up in the conversation. Then, have them list the skills in rows underneath each dream, and review it with them during the next conversation.

The third conversation is to help them create an eighteen-month plan of growth. This conversation is all about answering the following questions: “What do I need to learn in order to move in the direction of my dreams? How should I prioritise the things I need to learn? Whom can I learn from?” How can I change my role to learn it?”

The outcome of these conversations is a deep understanding of where each of the people on your team wants to go, how they need to grow to get there and how you can motivate them along the way.

It’s an incredibly simple and powerful way to create a level of intimacy with your team you’ve never had before.

Building Trust With Your People

Once you’ve established the beginnings of a deeper relationship with your team, it’s time to move on to other things you can do to reinforce the trust you’ve started building.

Deal with yourself first

If you’ve watched any safety instruction videos on an airplane, you’ll know that in the event of an emergency, you need to put on your oxygen mask before moving on to help other people.

It highlights the principle that as a leader, you need to take care of yourself before tending to the needs of others. This means that you need to be relentless in bringing your fullest and best self to work each and every day.

In order to do that, focus on figuring out what your “recipe” is for staying centred, and stick to it no matter what. If that means scheduling mediation periods throughout the day, put it in your calendar and don’t let anybody schedule over it.

Building trust with your people

There are a number of things you can do on a daily or weekly basis to deepen the trust with your team. Here are some of them:

  • Hang out in a relaxed setting. Spending time with your team without the pressure of work and deadlines is a great way to build relationships. Consider involving the families of your team members.
  • Learn to deal well with emotions. Part of building trust is allowing people to express their emotions in front of you. Sometimes it will be anger, sometimes it will be sadness, and sometimes it will be joy. Encourage this, because emotions are the best clues that there are deeper issues at play. Figure out how to manage your reactions in those situations so that they feel comfortable doing it again the next time.
  • Demonstrate openness. As a leader, demonstrating openness to new ideas and different ways of thinking (and even radically different world views) will go a long way in encouraging your team to open up with you and discuss what’s on their mind.

Check in regularly with 1:1s

The 1:1 is probably your most important tool in deepening the trust in your relationships with the people on your team. It gives you the opportunity to listen and clarify any issues you need to deal with. Here are a few ways to do them right.

  • Treat them as a coffee or lunch with somebody you want to get to know better rather than a meeting.
  • The agenda should be set by the team member, not you. Let them decide what issues you need to explore.
  • Hold them accountable for coming prepared. While you want them to set the agenda, there should be one.
  • Ask good follow up questions. “Why?”, “How can I help?” and “What can I do or stop doing that would make this easier?” are good places to start.

You’ll know that these meetings are going well if you are both engaged in identifying and solving real issues. If you find that team members are regularly cancelling the meetings, you only hear good news and everything is sunshine and rainbows, it’s time to check in to see where things are going wrong.

Giving and Receiving Criticism and Praise

Now that we’ve covered the fun stuff (building better relationships by Caring Personally), it’s time to move on to the harder stuff (getting results by Challenging Directly).

Getting others to criticise you in public

The first step to creating a culture where Challenging Directly is the norm is to invite your team to criticise you in public. This is intended to let the team know that challenging directly is not only encouraged, but expected.

You can use the question we covered in the section on 1:1s here: “Is there anything I could do or stop doing that would make it easier to work with me?”

If you don’t get an answer, let your people sit with the uncomfortable silence for at least six seconds before moving on.

Giving impromptu advice

Giving advice should not be reserved for formal performance reviews. Being Radical Candid requires you to give advice and direction regularly and here are a few ways to do it well:

  • Give feedback immediately. The closer to the event you give it, the better.
  • Be precise. Describe the following three things when giving feedback: (1) the situation you observed, (2) the behaviour you saw (good or bad) and the impact you observed.
  • State your intention to be helpful. This will help lower defences if you are giving negative feedback.
  • Do it in person, if possible. Seeing the other person’s face and body language is key in understanding how the feedback is being received.

Formal Performance Reviews

The long story short on this one is, if you have to do it (many companies are doing away with the formal annual review process), make sure there are no surprises in the review.

If you are practicing Radical Candor, any and all issues should have been dealt with well before a formal review process.

Driving Results Through Your People

Finally, now that you have a motivated team that’s built on trust and candor, you need to make sure that when you are working together to solve problems and take advantage of opportunities, it goes well.

Scott describes a tool she uses called the GSD wheel (getting stuff done), which has 7 distinct steps.

  1. Listen. Ensure that everybody on your team gets an opportunity to provide input on the issue and that everybody actually listens to one another.
  2. Clarify. Create a space where ideas can be clarified or honed and make sure that ideas don’t get discarded before everybody understands them fully.
  3. Debate. Wrestle with the good, bad and ugly of each idea.
  4. Decide. Make a decision on which idea to move forward with.
  5. Persuade. Sometimes there will be other people you need to convince in order to get an idea implemented. This step requires you to use your persuasion skills to bring them along.
  6. Execute the plan.
  7. Learn. Always close the loop so you can understand whether or not you did the right thing and then start the process all over again.

The critical part about this 7-step process is that your team understands it and that you move through the steps quickly enough to keep everybody engaged.

Hope you enjoyed this summary. As always leave me a comment if you did.

P.S. I need a business coach (willing to train [at my expense] the right individual with some get up and go / sales/ marketing/ business prowess) to facilitate demand for my coaching business. I will cover all start up costs for the right person. If you, or someone you know, is interested, please click http://business-coaching.com/andy/ for more information

Book Summary of ‘The 1% Windfall’​ by Mohammed Rafi

Most people – including seasoned business executives – are not comfortable setting prices.

There are very few “golden rules” and practical guidance for us to rely on, so most of us resort to the path of least resistance – doing what we have always done, or copying our competitors in the marketplace.

Which is a shame, because creating a better pricing strategy is the quickest path to new profits and growth.

Better yet, pricing is the only strategy that can be implemented on Sunday night and start to produce profits on Monday morning.

McKinsey & Company did a study of Global 1200 companies around the world and found that if they increased their prices by just 1%, they would increase their operating profits by 11.2%. Which is where the name “The 1% Windfall” comes from.

Join me for the next 10 minutes as we explore how to create a better pricing strategy so that you too can start benefiting from the world’s most powerful profit making strategy.

Why Pricing Is So Important

Yes, pricing is quick to implement and leads to dramatic results, but how does it tie into other goals your company might have – like market share, operating margin targets and profitable growth?

I’m glad you asked.

Market Share

The traditional thinking around increasing market share is that you decrease prices and thus more people buy more stuff. As we’ll explore in the coming sections, playing the game of “how low can we go” rarely leads to optimal results.

Operating Margin Targets

There are two main drivers of operating margins. The traditional focus is cutting costs and increasing efficiency. Of course, increasing prices is the other side of that coin. We’ll explore how to do this profitably.

Profitable Growth

Growth at all costs is never a good strategy, unless you are Amazon or Walmart. If you want to keep profiting while you grow, creating a pricing strategy is critical.

Capturing Value by Thinking Like A Customer

A great pricing strategy involves setting prices that capture the value you’ve created with your product, not how much it costs to produce it.

For example, street vendors (some of the wisest price ninjas on the planet) increase prices based on the current value their product provides. Is it about to rain? That umbrella just went up on price.

Understanding how to create a pricing strategy that works requires you to understand the three primary ways that customers differ:

  1. Customers want a pricing plan that works for them. For instance, sometimes they want to lease your product rather than buying it outright. Understanding which plans work for which customers is key.
  2. Customers have unique needs. For instance, some of your customers might need small doses of your product, and some of them might need it all at once. Understanding how to create different versions of your product that take advantage of this is important.
  3. Different customers value your product differently. Finding ways to charge different customers different prices for the same product is a key element of any strong pricing strategy.

One-on-One and Multi-Customer Pricing

One-on-One Pricing

You should use one-on-one pricing where you are selling one product to one person. For instance, selling a used car, a house, or a custom service.

There are five steps here:

  1. Identify your target customers.
  2. Identify the next-best alternative available to those people and use its price as a starting point.
  3. Determine your product’s differentiators relative to the next-best alternative.
  4. Calculate your product’s value based on that differentiation.
  5. Do a reality check on the price of the next-best alternative. For instance, make sure that the price of the next-best alternative isn’t too high.

Multi-Customer Pricing

You should use a multi-customer pricing strategy when you are selling many units of a product to a variety of customers. Most companies fall into this bucket.

There are four steps here:

  1. Identify your target consumer’s next-best alternative and reality-check its price. Just like in the one-on-one pricing strategy, this is your starting point.
  2. Determine how your product is differentiated. There are many factors to consider here: your brand, the ease of use of your product, the quality, and the service levels you provide are just a few of the factors.
  3. Create a demand curve based on the idea that different customers will value your product differently. We covered the demand curve in our previous summaries of The Strategy and Tactics of Pricing and Confessions of The Pricing Man if you need a primer on what that is.
  4. Finally, undertake a profit maximiser analysis to figure out the most profitable price. Basically, you calculate the revenues, costs and profits at price levels from high to low and then pick the one that generates the most profit.

Now that we’ve covered the basics, let’s get into the nitty gritty of how you can create different pricing models based on everything we’ve learned so far.

Pick-a-Plan

As you start your journey towards a profitable pricing model, you’ll uncover that some of your prospects aren’t buying because the pricing plan doesn’t work for them.

Pick-a-Plan strategies looks to solve this by giving your customers different ways to buy your product.

The first thing you can do is give your customers different ownership alternatives. Ask yourself the following questions:

  • Interval ownership. Can you divide your whole product into smaller ownership units and sell those units individually?
  • Leasing. Can you sell the rights to use the product for a period of time?
  • Rental. Can you sell usage of the product for a shorter period of time?
  • Subscription. Can you offer a rental that allows customers access to your entire suite of products for a period of time (usually monthly or annually)?

The second thing you can do is create pricing tactics that reduce the risk of using your product. Ask yourself the following questions:

  • Success fees. Can you charge a base price and get a bonus when a key success metric for the customer is achieved?
  • Licensing. Can you tie the value your intellectual property creates for your customer to your pricing structure? This is usually relevant in franchising or reseller arrangements.
  • Auctions. Can you establish the value of your product by accepting bids and selling to the highest bidder?
  • Future price options. Can you charge a price to give a customer the right to purchase the product in the future for a price that is set today?

The third thing you can do is generate options for customers who are sensitive to changes in price. Ask yourself the following questions:

  • Flat rate. Can you offer a fixed fee for your product rather than a variable rate?
  • Peace-of-mind guarantee. Can you fix the price of your product for a given period?
  • All-you-can-eat. Can you offer one price for unlimited usage?
  • Two-part high/low pricing. Can you charge an up-front price for access to lower-than-general variable pricing? Think Costco.

Finally, the fourth thing you can do is to address financing constraints that your customers might have, either now or in the future. Ask yourself the following questions:

  • Financing. Can you allow your customers to make their payments over time?
  • Job-loss protection. Can you offer refunds or payments if a customer becomes unemployed?
  • Layaway. Can you allow customers to pay in instalments and then receive the product when the full payment has been made?
  • Prepaid plans: Can you allow customers to pay in advance and then draw down this credit over time?

Now that we’ve covered a number of ways you can offer plans for your product, let’s move our attention to how you can create different versions of your product to extract even more value and profit.

Versioning

Sometimes all it takes is a few small modifications in your product to unlock new value in the marketplace. This strategy can be used to get current customers to “trade up” the value chain and also find new customers who have unique needs and who value your product at a lower level.

The first thing you can do is add additional features to your product so that you can charge a higher price. Ask yourself the following questions:

  • Higher quality. Can you add elements to your product that increases its overall value?
  • Guaranteed access. Can you give your customers a guarantee that they’ll be able to use your product or service, even if it’s otherwise sold out?
  • Priority access. Can you offer a version of your product or service that allows your customers to avoid waiting? Think of the FastPass program at Disney World.
  • Faster product. Many customers value speed and are willing to pay for it. Can you offer a faster version of your product?

The second thing you can do is to offer a stripped down version of your service or product and offer it at a lower price. Ask yourself the following questions:

  • Lower quality. Some customers are willing to sacrifice quality for a lower price. Can you give that to them?
  • More restrictions. Can you create conditions to using your product that limit the value the customer will receive?
  • Unbundling. Can you unbundle the features of your product and sell them individually?
  • Off-peak. Can you offer discounts for accessing your product or service at times when it’s otherwise not busy?
  • Private label. Can you supply your product under another retailers name and charge a lower price?

Finally, the third thing you can do is add new features to your service that are designed to attract key target customers. Ask yourself the following question:

  • Package size. Can you offer different sizes for different customer segments?
  • Extended and enhanced warranties. Can you offer an extended or enhanced warranty?
  • Monthly clubs. Can you offer new things for customers who value novelty and “being the first?”
  • Bundling. Can you create new features and bundle them together with existing features to make a brand new offering?
  • Platforms. Can you allow your product or service to be used on a different platform? For instance, HBO allows cable companies to offer their service, but also has their own stand-alone platform.
  • Usage purpose. Can you find a different use for your product? For instance, drug makers often create versions of human drugs for pets.

Now that we’ve covered a number of ways you can offer plans for your product and how to create different versions of your product, let’s move our attention to how to create different prices for the same offering.

Differential Pricing

Some customers are willing to pay more than other people. So, if you only have one price, you are leaving money on the table in two ways – by not charging enough to some people, and by people not purchasing at all because they think it’s too expensive.

The solution to this problem is differential pricing.

The first thing you can do is create hurdles that customers need to climb over in order to receive discounts. Ask yourself the following questions:

  • Rebates. Can you create a reduced price for those willing to fill out paperwork and wait for a refund check?
  • Sales. Can you create discounts every so often to entice people who are unwilling to pay the full price?
  • Coupons. Can you create discounts for people who are willing to hunt down and redeem coupons?
  • Price matching. Can you match your competitors prices?
  • Distribution. Can you offer lower prices at less convenient locations?
  • Sales cycle time. Can you start prices high and lower them over time to attract the people who are willing to wait?

The second thing you can do is create different prices based on customer characteristics. Ask yourself the following questions:

  • Geography. Can you vary prices by locations? People in some areas might value your product differently than in others.
  • Easily identifiable traits. Can you create different prices based on age, status (like student, military member, etc.) and proximity to your location?
  • Club affiliation. Can you offer discounts to an organisation’s members in exchange for marketing benefits?

The third thing you can do is look at the purchasing patterns of your customers. Ask yourself the following questions.

  • Quantity. Can you offer a lower per-unit price based on bulk purchases?
  • Mixed bundling. Can you create discounts for people who purchase bundles of your products?
  • Next-best alternatives. Can you adjust prices based on the competitive landscape? You can charge lower prices in highly competitive markets and higher prices where there is less competition.
  • Two-part pricing. Can you have one price for one part of your product and a different price for the other? Think razor and razor-blade pricing.

Conclusion

So there you have it. A huge list of different ways you can set your pricing that should spark some new ideas to capture more profit.

Remember, pricing is the only marketing tool you have at your disposal that you can dream of on Sunday night and implement on Monday morning.

That’s instant profits, my friends.

Hope you enjoyed this summary. As always leave me a comment if you did.

P.S. I need a business coach (willing to train [at my expense] the right individual with some get up and go / sales/ marketing/ business prowess) to facilitate demand for my coaching business. I will cover all start up costs for the right person. If you, or someone you know, is interested, please click http://business-coaching.com/andy/ for more information

Book Summary of “The Referral Engine” by John Jantsch

“You won’t believe what they did!”

“Their customer service was so great that even……”

“I must tell you about ……..”

There are three types of messages we want to hear about our businesses. They are great referrals that can create great business. The Referral Engine by John Jantsch offers a systematic approach to establishing word of mouth as a comprehensive marketing strategy.

In a larger sense, it proposes a better way (and friendlier way) of doing business. The book shows you how to craft a strategy that compels customers and partners to voluntarily participate in your marketing, to create positive buzz about your products and services to friends, neighbours and colleagues. What more needs to be said?

Lesson #1: Fill the needs, take a risk and don’t be boring!

**Reality #1: People make referrals because we need to**

We rate and refer as a form of survival. We pass on what we know to others to build credit in the community. We refer to connect with other people. We refer to build our own form of social currency. Oh, and if you do something for me, I am implicitly obligated to do something for you.

**Reality #2: All business involves risk**

When we make a referral, we are putting the trust we have established with the recipient on loan to the person or company being referred. People don’t get emotional and passionate about ordinary products, a satisfactory result, or a fair price. They talk about things that surprise them or make them feel great about themselves and, in effect, remove the feeling of risk they might have about doing business with that firm.

**Reality #3: Nobody talks about boring businesses**

As Seth Godin has often said, “If the marketplace isn’t talking about you, there’s a reason. The reason is that you’re boring.” To build a business, territory, or practice based primarily on referrals, you must first discover or create the remarkable thing about you or your products, the thing that gets people talking, that almost forces them to tell others about you. Boring people, products and companies are hard to refer!

Lesson #2: Employees should know better

Your employees probably treat your customers about the same way you treat your employees. Happy employees are much more likely to represent the brand in a positive manner. Let’s face it: Companies aren’t capable of making emotional connections; people are.

Regular, institutionalised training is a core element of widely referred businesses. This begins with training in the daily routines and processes required to complete ordinary job functions, but it goes much deeper as well. Teaching every new employee everything you can about your organisation’s marketing strategy, marketing plan, positioning, messaging, ideal customer, products, services, and brand attributes makes sense when it comes to creating ambassadors of the organisation.

Smart companies makes sure every employee understands how to spot an ideal customer, how to properly introduce the company’s story, and how to spot trigger phrases prospective customers use, and clues they give, that mark them as potential ideal customers, even if selling isn’t a part of that employee’s job description.

Lesson #3: The Four C’s of Marketing

The age of the 4 Ps of marketing: Product, Price, Placement, Promotion has given way to the age of the customer. A new set of principles has been established in the hierarchy of marketing planning. In the age of the customer, the 4 Cs are the keys to business success: content, context, connection, and community.

**Content**

Authentic content that educates or is otherwise seen as valuable to the consumer is the new currency of marketing. Customers have grown weary of marketing messages that are blasted at them in an effort to make them buy. The solution is to provide content that the customer values and desires.

**Context**

The ability to position information within the context of a prospect’s life has become a core marketing tactic. In some cases, this can be accomplished by simplifying our messages and uncluttering our marketing communications.

**Connection**

The most remarkable businesses seem to innovate and create buzz by balancing high-tech connections with high-touch engagements, allowing one to inform the other. By using technology to allow prospects to connect when and where they choose, they allow people to connect more deeply when and where they choose.

**Community**

In the wired world, community is free to form around shared ideas, common interests, and strategic relationships unbound by distance. Due to the ease of access to online tools, anyone, including our prospects, customers, partners, suppliers, mentors, and even competitors, can form communities to publish information, generate and distribute audio, video, or written content about our products and services, and play an active role in the overall impression a market has about our brand.

Lesson #4: Convergence of Communication Channels

Successful businesses fall into one of two camps:

Businesses that rely on the evolution of marketing driven by social networking, content rich web sites, blogs and businesses that rely on more traditional, off-line business building tools, such as face-to-face selling, in-person relationships, local community involvement.

Both of these models are effective ways to build a business and, depending on the industry you find yourself in, may be exactly the approach you’ve taken or plan to take in order to grow your business.

However, there is an increasing danger in relying solely on one or the other.

Businesses that create the most buzz seem to have a knack for tapping and creating a convergence of these two models, places where online and off-line strategies and tactics intersect and overlap, as an essential ingredient in their culture of referral.

The converged business uses every advance in technology as an opportunity to forge a deeper, more personal relationship with its customers. Technology is used as a way to create larger networks, interact in ways that are most convenient for the customer, and engage customers more frequently.

Lesson #5: The Seven Stages of Referral

There are seven stages of referral development and corresponding touch points along the customer lifecycle.

**Know**

This is the initial introduction to your company, and while it is commonly conveyed through your advertising messages, it is also the point at which a referred lead discovers you. The best way to start the relationship is to communicate a clear brand or point of differentiation that is designed to attract your ideal customer and your ideal referral sources.

**Trust**

When a prospect is ready to learn more, you are approaching the trust hurdle. During the trust building phase your prospect may need to be nurtured for a time. What kinds of educational opportunities, such as free reports, “how-to” checklists, and information rich seminars can you offer?

**Like**

Once a lead is aware of your company, they can and should be led to dig a little deeper, to see what’s behind the ads. This is often the point when your web presence or physical presence (store, offices, marketing materials, etc.) set the tone for a deeper connection.

**Try**

One of the best ways to ensure that every customer relationship evolves into a referral relationship is to create a way for your customers to sample your business and in turn give your business the opportunity to sample the customer. The use of trial offers, seminars, evaluations, guarantees, and any type of activity that provides a prospect with the ability to sample your products and services effectively before making what may be a costly purchase can make a customer much more comfortable and allow you to demonstrate how you work.

**Buy**

How you orient your customer once they say yes is a referral marketing touch point. How you fulfill the order, how you deliver the order, how you communicate throughout the process, how you communicate after the project, and how you ask to be paid for the work are all elements that determine whether you are referral worthy or not in the eyes of your customer. In this stage, expectations are everything. No matter what you think is good or bad, if it’s not what the customer expected, it can raise a red flag.

**Repeat**

The key factor in creating repeat sales, expanded product sales, and long-term loyalty is to make certain that your customers are getting the most value possible from your products and services. When someone buys your product or service, commit to teaching them the proper way to get the most from it. Far too often we sell a product or service and just assume our customers are getting the results they desired or were promised. It’s essential that your customer fulfillment process also contain a step that forces you to ascertain and review with your customer the value they received from your product or project. This is a great way to fix gaps in service.

**Refer**

At this stage you should focus on making it very easy for your advocates to participate in your business, come together as a community, and tap your entire network. You can create peer-to-peer discussion panels that allow some of your greatest customer fans to discuss solutions and challenges with prospects. Or you can create customer advisory and referral boards that allow them to participate in the formation of your marketing campaigns and business strategies.

Lesson #6: Partnering: Referral by Proxy

A fully developed referral system targets two distinct prospect groups. The first is your customer base, or your “direct network.” The second, potentially richer, group is made up of other business that also serve your ideal customer who could be motivated to partner with you in some way to exchange referrals and support your customers.

While many businesses focus the bulk of their referral generation efforts on existing customers, the real untapped referral opportunity resides with strategic partners. Partners are an essential part of the referral engine.

The idea of partnering with businesses that have your same target market as customers is not a new one: it’s just gotten so much easier to do. By using technologies such as online web conferencing and podcasting you can easily tap the knowledge and resources of a large group of experts and partners.

**The Strategic Partner Network**

This is a group of business owners who share your description of an ideal customer. In other words, businesses that sell to your customers and prospects. This network quite often can possess far greater referral opportunities if for no other reason than sheer numbers. In addition, partner network members usually have a stronger motivation to act on your behalf. In most cases, a referral is made by a customer because they bump into someone who needs what you do. Strategic partners may find that it makes sense for them to actively promote your business or solution as a way to increase the value of the relationship they have with their customer base.

When you are talking to an existing client, the benefit of a referral is the opportunity to help that person, help a friend or raise their perceived value with a colleague. Ask yourself: How could referring your business make your client’s life better? That’s the proper way to think about referrals. Do that, and you will never be afraid to ask a client again.

The next time someone calls you up and says, “My friend said I should contact you,” immediately call the referral source up and ask them why they did so. You may have an idea, but it’s the actual words, while they still remember, that are important. We go through life thinking we know what the client values about our business, but it’s often not what we think it is. What makes you want to refer us? What do we do that’s unique? What do people say that makes you think of telling them about us?

I hope you enjoyed this summary!

P.S. I need a business coach (willing to train [at my expense] the right individual with some get up and go / sales/ marketing prowess) to facilitate demand for my coaching business. If you, or someone you know, is interested, please click http://business-coaching.com/andy/ for more information

Book Summary of ‘Answering The Ultimate Question’ by Laura Brooks Richard Owen

Net Promoter programs have been deployed by thousands of companies around the world. Some of them have seen the positive results that should accompany the method and some have not.

What explains the discrepancy in the results?

In Answering the Ultimate Question, the authors give us the solution by explaining the six elements we need in order to do Net Promoter well.

Element #1: Creating Customer-Centric DNA and Driving Change

Net Promoter is a program that requires you to change how you do business and no successful change program flourishes without executive sponsorship and organisational alignment.

Executive Sponsorship

Without executive support, you won’t get the financial investments, human resources and focus on the customer that you need in order to make big changes. Simply put, you need complete buy-in from the top in order to ensure this doesn’t just become another to do item that gets ticked off. Don’t start until you do.

Organisational Alignment

In order to get the rest of the organisation aligned with Net Promoter, you need to be thinking about incentive plans, your internal culture, and communication strategies.

You’ll also need to set up a program structure that will ensure employees know their roles and responsibilities in making customer focus their most important role.

You’ll also need to know how to best sell NPS to the organisation. The best place to start is with financial data that proves the value of the program on the bottom line.

Segmenting for Optimal Results

In order to make the program work, you’ll need to have customer segmentation data.

In B2C companies, customer segmentation typically focuses on customer behaviours, such as recency and frequency of purchase and demographics. In B2B companies, you might focus on account size, account type, region, or business unit, as well as individual customer characteristics like job role or purchase influence.

Make sure to choose segments where your business will most benefit from increased loyalty because you can’t necessarily delight all customers all of the time.

Remember, you are looking for customers who produce good profits – customers who are both highly profitable and highly loyal.

Element #2: Develop an Enterprise Roadmap

NPS programs that don’t get rolled out with a clearly defined strategy – just like any other change initiative – usually die a slow and painful death.

Here are some critical areas your plan needs to cover in order to be successful.

Planning for Different Types of Change

There are two dimensions of business improvements – operational and structural.

Operational improvements are quick wins that are rapidly identified and resolved, usually involving tactical opportunities to improve the customer experience point of contact with the customer. Operational improvements typically improve loyalty one customer at a time.

Structural improvements have longer-term, potentially more significant impact on customer loyalty. These improvements typically require changes in the product, business model or services and therefore take longer and involve more cross-functional involvement and more resources.

Your NPS program should include a plan for both.

Just as there are two different types of changes you can expect in your NPS journey, there are two different types of surveys you’ll use to drive these changes.

Relationship versus transactional survey processes

Transactional surveys typically measure an event with direct customer interaction, such as a support call.

Relationship measures capture the overall perception of your business and are not related to any one specific interaction. Typically there are gathered on a periodic basis.

Your NPS scores in your most important transactions should be a leading indicator of your relationship NPS.

The Customer Corridor

When thinking about how to improve your NPS scores, it’s critical to understand the lifecycle of your customer, and what touch points your company has with them. So, map out the entire customer experience.

Your job is to understand which touchpoints have the largest affect on the overall customer experience, which ones have the greatest impact on loyalty and in what sequence they should be addressed.

Phased versus Big Bang Approach

Finally, you need to decide how to launch the program.

Programs have been successfully rolled out in stages over time, and at once across an entire organisation. However, the majority of circumstances seem to favour the phased approach.

Element #3: Build Trustworthy Data

Many NPS programs fail because of poor data quality.

Data is trustworthy when it has been collected in a manner that ensures it is an accurate and reliable representation of your customers and their perceptions and behaviours.

The Right Customers

Trustworthy data requires you to measure the right customers. Your sampling strategies should emphasise leveraging feedback of your highest-value customers – “voice according to value.”

The Right Questions

Your loyalty metric (NPS or otherwise) will determine your core survey question, but what other questions should you ask? If you must add additional questions, make sure that they:

  • provide useful, actionable data on issues that matter to customers and employees;
  • be a good experience for your customers and employees;
  • ensure that survey questions are interpreted in the same way by every potential respondent;
  • ensure that survey questions elicit an accurate response; and
  • provide consistent responses over time.

Determining the Right Time to Measure

The best time to collect data about specific transactional experiences is directly following the transaction.

The best time to collect relationship experience is some point not directly after or preceding a customer experience point – that way no single experience point skews the results one way or another.

Element #4: Identify Root Causes

Analysing the data to determine root causes for customer behaviour is a critical part of the Operating Model.

Using a combination of analysis tools to identify root causes enables employees to address the real and relevant loyalty drivers for their customers.

There are two basic approaches to understanding drivers of loyalty – stated driver analysis and inferential driver analysis.

For stated driver analysis the focus is on root cause interviews and comment categorisation.

For inferential driver analysis, the focus is on correlation analysis and related statistical methods such as regression and relative impact analysis.

Root cause interviews – the 5 whys

To succeed in root cause interviews several elements need to be included in the process.

  • Train the interviewer – they need to be familiar with the technique.
  • Always ask for permission prior to the interview and prior to getting started.
  • Double-check that the customer’s problem or issue has been resolved.
  • Plan for a time limit.
  • Schedule internal team reviews to discuss root causes and potential solutions.
  • Find a way to communicate back with the customers regarding the actions you have taken based on their feedback.

Comment Analysis and Categorisation

The most common method organisations use to structure open-ended comments is to aggregate them and then categorise by theme, examine the relative frequency of different themes to determine which might be key loyalty drivers.

The good old-fashioned way of exploring these comments is to assign internal teams to read what customers say.

Inferential Driver Analysis

Many organisations use additional diagnostic questions beyond the open-ended comment. They cover broad themes like reputation, value and ease of doing business.

When these questions are asked in the survey, you can use statistical techniques to infer, based on aggregated customer ratings rather than statements, what aspects of customer experience are driving overall customer loyalty.

And if you have a systematic way of gathering Promoters together for a conversation about your business (either online or offline), then you are well on your way to identifying exactly what you should be doing to create Promoters and improve your score.

Element 5: Drive action and accountability

It’s not enough to measure your NPS score and doing root cause analysis, you need to take action on what you are learning.

A closed-loop process is a key differentiator in a Net Promoter program. It’s the process that connects employees with customers in a direct fashion.

It’s important to close the loop with every customer and that your employees at all levels have responsibility for making that happen. An effective closed-loop process balances the most desirable attributes found in the best program with practical implementation.

Here are the basics of a closed-loop process:

  1. The customer responds to a survey.
  2. An alert to follow up is generated based on business rules. The alert may be event driven or scheduled, depending on your program design.
  3. A follow-up owner contacts the customer.
  4. The issue is logged and either resolved or escalated.
  5. The outcome is tracked to capture any learning.

Here are the areas that will make you successful in closing the loop:

  1. Speed. From the moment customers provide feedback, they are waiting to see what you will do. In successful Net Promoter programs, responding quickly is important.
  2. Coverage. If a customer takes time to give you feedback, they deserve a response. A thank you message at the end of the survey is a good start, but you need to provide some indication of what actions you’ll take based on their feedback. Follow up can range from one-on-one meetings at the customer’s office to broad-based communications in an e-mail or newsletter.
  3. Root cause analysis. As we’ve covered in the previous section, follow up provides a great opportunity to get to the core of the issue.
  4. Initiate action. In a perfect world, the follow-up owner will take action to resolve the customer’s issues in the first conversation, but you might settle for initiating a response. It could be as simple as “we hear you and understand your concerns.”
  5. Governance. The closed-loop process requires oversight to ensure that those responsible for taking action are doing so in a timely and appropriate manner.

Element 6: Innovation and Transformation

The goal of a Net Promoter program is transformation, both within the corporate culture and in the marketplace. Net Promoter leaders experience product innovation and improvements through the iterative process of listening to customer feedback and making improvements.

They use increasingly sophisticated techniques, including the use of Net Promoter segmentation, feedback from communities, root cause probing for strategic planning, overall go-to-market approaches, product strategy, customer concretion of products, services and business processes.

The payoff from a successful Net Promoter program is the ability to make the right strategic decisions and foster innovations that ultimately improve your market position. This is where the advantages of superior Net Promoter execution convert into competitive advantage.

I hope you enjoyed this summary.

P.S. I need a business coach (willing to train [at my expense] the right individual with some get up and go / sales/ marketing prowess) to facilitate demand for my coaching business. If you, or someone you know, is interested, please click http://business-coaching.com/andy/ for more information


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