I’ve published two videos this week.  Both of these videos were inspired by Jeff Bezos’ letter to shareholders from last week.  (The text of the letter is available below).

2 Jeff Bezos Inspired Videos

  • The first: why do we fail to achieve our goals?
  • The second: how do we create high standards?

if you are reading this via email and don’t see the videos, watch them on the blog here: Jeff Bezos on High Standards and Why you don’t achieve your goals

Jeff Bezos on Why We Fail to Achieve our Goals

Jeff Bezos on Setting High Standards

The Most Read Post of All Time…  on Amazon:

If you liked this post, you will also like my all-time most read post Amazon Staff Meetings: They Banned Powerpoint.

Amazon’s Letter to Shareholders

You can read the letter as filed with the US Securities and Exchange Commission here: https://www.sec.gov/Archives/edgar/data/1018724/000119312518121161/d456916dex991.htm

or here is the full text for your enjoyment…

EX-99.1 2 d456916dex991.htm EX-99.1

LOGO

  Exhibit 99.1  

To our shareowners:

The American Customer Satisfaction Index recently announced the results of its annual survey, and for the 8th year in a row customers ranked Amazon #1. The United Kingdom has a similar index, The U.K. Customer Satisfaction Index, put out by the Institute of Customer Service. For the 5th time in a row Amazon U.K. ranked #1 in that survey. Amazon was also just named the #1 business on LinkedIn’s 2018 Top Companies list, which ranks the most sought after places to work for professionals in the United States. And just a few weeks ago, Harris Poll released its annual Reputation Quotient, which surveys over 25,000 consumers on a broad range of topics from workplace environment to social responsibility to products and services, and for the 3rd year in a row Amazon ranked #1.

Congratulations and thank you to the now over 560,000 Amazonians who come to work every day with unrelenting customer obsession, ingenuity, and commitment to operational excellence. And on behalf of Amazonians everywhere, I want to extend a huge thank you to customers. It’s incredibly energizing for us to see your responses to these surveys.

One thing I love about customers is that they are divinely discontent. Their expectations are never static – they go up. It’s human nature. We didn’t ascend from our hunter-gatherer days by being satisfied. People have a voracious appetite for a better way, and yesterday’s ‘wow’ quickly becomes today’s ‘ordinary’. I see that cycle of improvement happening at a faster rate than ever before. It may be because customers have such easy access to more information than ever before – in only a few seconds and with a couple taps on their phones, customers can read reviews, compare prices from multiple retailers, see whether something’s in stock, find out how fast it will ship or be available for pick-up, and more. These examples are from retail, but I sense that the same customer empowerment phenomenon is happening broadly across everything we do at Amazon and most other industries as well. You cannot rest on your laurels in this world. Customers won’t have it.

How do you stay ahead of ever-rising customer expectations? There’s no single way to do it – it’s a combination of many things. But high standards (widely deployed and at all levels of detail) are certainly a big part of it. We’ve had some successes over the years in our quest to meet the high expectations of customers. We’ve also had billions of dollars’ worth of failures along the way. With those experiences as backdrop, I’d like to share with you the essentials of what we’ve learned (so far) about high standards inside an organization.

Intrinsic or Teachable?

First, there’s a foundational question: are high standards intrinsic or teachable? If you take me on your basketball team, you can teach me many things, but you can’t teach me to be taller. Do we first and foremost need to select for “high standards” people? If so, this letter would need to be mostly about hiring practices, but I don’t think so. I believe high standards are teachable. In fact, people are pretty good at learning high standards simply through exposure. High standards are contagious. Bring a new person onto a high standards team, and they’ll quickly adapt. The opposite is also true. If low standards prevail, those too will quickly spread. And though exposure works well to teach high standards, I believe you can accelerate that rate of learning by articulating a few core principles of high standards, which I hope to share in this letter.

Universal or Domain Specific?

Another important question is whether high standards are universal or domain specific. In other words, if you have high standards in one area, do you automatically have high standards elsewhere? I believe high standards are domain specific, and that you have to learn high standards separately in every arena of interest. When I started Amazon, I had high standards on inventing, on customer care, and (thankfully) on hiring. But I didn’t have high standards on operational process: how to keep fixed problems fixed, how to eliminate defects at the root, how to inspect processes, and much more. I had to learn and develop high standards on all of that (my colleagues were my tutors).

 


Understanding this point is important because it keeps you humble. You can consider yourself a person of high standards in general and still have debilitating blind spots. There can be whole arenas of endeavor where you may not even know that your standards are low or non-existent, and certainly not world class. It’s critical to be open to that likelihood.

Recognition and Scope

What do you need to achieve high standards in a particular domain area? First, you have to be able to recognize what good looks like in that domain. Second, you must have realistic expectations for how hard it should be (how much work it will take) to achieve that result – the scope.

Let me give you two examples. One is a sort of toy illustration but it makes the point clearly, and another is a real one that comes up at Amazon all the time.

Perfect Handstands

A close friend recently decided to learn to do a perfect free-standing handstand. No leaning against a wall. Not for just a few seconds. Instagram good. She decided to start her journey by taking a handstand workshop at her yoga studio. She then practiced for a while but wasn’t getting the results she wanted. So, she hired a handstand coach. Yes, I know what you’re thinking, but evidently this is an actual thing that exists. In the very first lesson, the coach gave her some wonderful advice. “Most people,” he said, “think that if they work hard, they should be able to master a handstand in about two weeks. The reality is that it takes about six months of daily practice. If you think you should be able to do it in two weeks, you’re just going to end up quitting.” Unrealistic beliefs on scope – often hidden and undiscussed – kill high standards. To achieve high standards yourself or as part of a team, you need to form and proactively communicate realistic beliefs about how hard something is going to be – something this coach understood well.

Six-Page Narratives

We don’t do PowerPoint (or any other slide-oriented) presentations at Amazon. Instead, we write narratively structuredsix-page memos. We silently read one at the beginning of each meeting in a kind of “study hall.” Not surprisingly, the quality of these memos varies widely. Some have the clarity of angels singing. They are brilliant and thoughtful and set up the meeting for high-quality discussion. Sometimes they come in at the other end of the spectrum.

In the handstand example, it’s pretty straightforward to recognize high standards. It wouldn’t be difficult to lay out in detail the requirements of a well-executed handstand, and then you’re either doing it or you’re not. The writing example is very different. The difference between a great memo and an average one is much squishier. It would be extremely hard to write down the detailed requirements that make up a great memo. Nevertheless, I find that much of the time, readers react to great memos very similarly. They know it when they see it. The standard is there, and it is real, even if it’s not easily describable.

Here’s what we’ve figured out. Often, when a memo isn’t great, it’s not the writer’s inability to recognize the high standard, but instead a wrong expectation on scope: they mistakenly believe a high-standards, six-page memo can be written in one or two days or even a few hours, when really it might take a week or more! They’re trying to perfect a handstand in just two weeks, and we’re not coaching them right. The great memos are written and re-written, shared with colleagues who are asked to improve the work, set aside for a couple of days, and then edited again with a fresh mind. They simply can’t be done in a day or two. The key point here is that you can improve results through the simple act of teaching scope – that a great memo probably should take a week or more.

Skill

Beyond recognizing the standard and having realistic expectations on scope, how about skill? Surely to write a world class memo, you have to be an extremely skilled writer? Is it another required element? In my view, not so much, at least not for the individual in the context of teams. The football coach doesn’t need to be able to throw, and a film director doesn’t need to be able to act. But they both do need to recognize high standards for those things and teach realistic expectations on scope. Even in the example of writing a six-page memo, that’s


teamwork. Someone on the team needs to have the skill, but it doesn’t have to be you. (As a side note, by tradition at Amazon, authors’ names never appear on the memos – the memo is from the whole team.)

Benefits of High Standards

Building a culture of high standards is well worth the effort, and there are many benefits. Naturally and most obviously, you’re going to build better products and services for customers – this would be reason enough! Perhaps a little less obvious: people are drawn to high standards – they help with recruiting and retention. More subtle: a culture of high standards is protective of all the “invisible” but crucial work that goes on in every company. I’m talking about the work that no one sees. The work that gets done when no one is watching. In a high standards culture, doing that work well is its own reward – it’s part of what it means to be a professional.

And finally, high standards are fun! Once you’ve tasted high standards, there’s no going back.

So, the four elements of high standards as we see it: they are teachable, they are domain specific, you must recognize them, and you must explicitly coach realistic scope. For us, these work at all levels of detail. Everything from writing memos to whole new, clean-sheet business initiatives. We hope they help you too.

Insist on the Highest Standards

Leaders have relentlessly high standards – many people may think these standards are unreasonably high.

— from the Amazon Leadership Principles

Recent Milestones

The high standards our leaders strive for have served us well. And while I certainly can’t do a handstand myself, I’m extremely proud to share some of the milestones we hit last year, each of which represents the fruition of many years of collective effort. We take none of them for granted.

 

Prime – 13 years post-launch, we have exceeded 100 million paid Prime members globally. In 2017 Amazon shipped more than five billion items with Prime worldwide, and more new members joined Prime than in any previous year – both worldwide and in the U.S. Members in the U.S. now receive unlimited free two-day shipping on over 100 million different items. We expanded Prime to Mexico, Singapore, the Netherlands, and Luxembourg, and introduced Business Prime Shipping in the U.S. and Germany. We keep making Prime shipping faster as well, with Prime Free Same-Day and Prime Free One-Day delivery now in more than 8,000 cities and towns. Prime Now is available in more than 50 cities worldwide across nine countries. Prime Day 2017 was our biggest global shopping event ever (until surpassed by Cyber Monday), with more new Prime members joining Prime than any other day in our history.

 

AWS – It’s exciting to see Amazon Web Services, a $20 billion revenue run rate business, accelerate its already healthy growth. AWS has also accelerated its pace of innovation – especially in new areas such as machine learning and artificial intelligence, Internet of Things, and serverless computing. In 2017, AWS announced more than 1,400 significant services and features, including Amazon SageMaker, which radically changes the accessibility and ease of use for everyday developers to build sophisticated machine learning models. Tens of thousands of customers are also using a broad range of AWS machine learning services, with active users increasing more than 250 percent in the last year, spurred by the broad adoption of Amazon SageMaker. And in November, we held our sixth re:Invent conference with more than 40,000 attendees and over 60,000 streaming participants.

 

Marketplace – In 2017, for the first time in our history, more than half of the units sold on Amazon worldwide were from our third-party sellers, including small and medium-sized businesses (SMBs). Over 300,000 U.S.-based SMBs started selling on Amazon in 2017, and Fulfillment by Amazon shipped billions of items for SMBs worldwide. Customers ordered more than 40 million items from SMBs worldwide during Prime Day 2017, growing their sales by more than 60 percent over Prime Day 2016. Our Global Selling program (enabling SMBs to sell products across national borders) grew by over 50% in 2017 and cross-border ecommerce by SMBs now represents more than 25% of total third-party sales.

Alexa – Customer embrace of Alexa continues, with Alexa-enabled devices among the best-selling items across all of Amazon. We’re seeing extremely strong adoption by other companies and developers that want to create their own experiences with Alexa. There are now more than 30,000 skills for Alexa from outside developers, and customers can control more than 4,000 smart home devices from 1,200 unique brands with Alexa. The foundations of Alexa continue to get smarter every day too. We’ve developed and implemented an on-devicefingerprinting technique, which keeps your device from waking up when it hears an Alexa commercial on TV. (This technology ensured that our Alexa Super Bowl commercial didn’t wake up millions of devices.) Far-fieldspeech recognition (already very good) has improved by 15% over the last year; and in the U.S., U.K., and Germany, we’ve improved Alexa’s spoken language understanding by more than 25% over the last 12 months through enhancements in Alexa’s machine learning components and the use of semi-supervised learning techniques. (These semi-supervised learning techniques reduced the amount of labeled data needed to achieve the same accuracy improvement by 40 times!) Finally, we’ve dramatically reduced the amount of time required to teach Alexa new languages by using machine translation and transfer learning techniques, which allows us to serve customers in more countries (like India and Japan).

 

Amazon devices – 2017 was our best year yet for hardware sales. Customers bought tens of millions of Echo devices, and Echo Dot and Fire TV Stick with Alexa were the best-selling products across all of Amazon – across all categories and all manufacturers. Customers bought twice as many Fire TV Sticks and Kids Edition Fire Tablets this holiday season versus last year. 2017 marked the release of our all-new Echo with an improved design, better sound, and a lower price; Echo Plus with a built-in smart home hub; and Echo Spot, which is compact and beautiful with a circular screen. We released our next generation Fire TV, featuring 4K Ultra HD and HDR; and the Fire HD 10 Tablet, with 1080p Full HD display. And we celebrated the 10th anniversary of Kindle by releasing the all-new Kindle Oasis, our most advanced reader ever. It’s waterproof – take it in the bathtub – with a bigger 7” high-resolution 300 ppi display and has built-in audio so you can also listen to your books with Audible.

 

Prime Video – Prime Video continues to drive Prime member adoption and retention. In the last year we made Prime Video even better for customers by adding new, award-winning Prime Originals to the service, like The Marvelous Mrs. Maisel, winner of two Critics’ Choice Awards and two Golden Globes, and the Oscar-nominated movie The Big Sick. We’ve expanded our slate of programming across the globe, launching new seasons of Bosch and Sneaky Pete from the U.S., The Grand Tour from the U.K., and You Are Wanted from Germany, while adding new Sentosha shows from Japan, along with Breathe and the award-winning Inside Edge from India. Also this year, we expanded our Prime Channels offerings, adding CBS All Access in the U.S. and launching Channels in the U.K. and Germany. We debuted NFL Thursday Night Football on Prime Video, with more than 18 million total viewers over 11 games. In 2017, Prime Video Direct secured subscription video rights for more than 3,000 feature films and committed over $18 million in royalties to independent filmmakers and other rights holders. Looking forward, we’re also excited about our upcoming Prime Original series pipeline, which includes Tom Clancy’s Jack Ryan starring John Krasinski; King Lear, starring Anthony Hopkins and Emma Thompson; The Romanoffs, executive produced by Matt Weiner; Carnival Row starring Orlando Bloom and Cara Delevingne; Good Omens starring Jon Hamm; and Homecoming, executive produced by Sam Esmail and starring Julia Roberts in her first television series. We acquired the global television rights for a multi-season production of The Lord of the Rings, as well as Cortés, a miniseries based on the epic saga of Hernán Cortés from executive producer Steven Spielberg, starring Javier Bardem, and we look forward to beginning work on those shows this year.

 

Amazon Music – Amazon Music continues to grow fast and now has tens of millions of paid customers. Amazon Music Unlimited, our on-demand, ad-free offering, expanded to more than 30 new countries in 2017, and membership has more than doubled over the past six months.

 

Fashion – Amazon has become the destination for tens of millions of customers to shop for fashion. In 2017, we introduced our first fashion-oriented Prime benefit, Prime Wardrobe – a new service that brings the fitting room directly to the homes of Prime members so they can try on the latest styles before they buy. We introduced Nike and UGG on Amazon along with new celebrity collections by Drew Barrymore and Dwyane Wade, as well as dozens of new private brands, like Goodthreads and


Core10. We’re also continuing to enable thousands of designers and artists to offer their exclusive designs and prints on demand through Merch by Amazon. We finished 2017 with the launch of our interactive shopping experience with Calvin Klein, including pop-up shops, on-site product customization, and fitting rooms with Alexa-controlled lighting, music, and more.

 

Whole Foods – When we closed our acquisition of Whole Foods Market last year, we announced our commitment to making high-quality, natural and organic food available for everyone, then immediately lowered prices on a selection of best-selling grocery staples, including avocados, organic brown eggs, and responsibly-farmed salmon. We followed this with a second round of price reductions in November, and our Prime member exclusive promotion broke Whole Foods’ all-time record for turkeys sold during the Thanksgiving season. In February, we introduced free two-hour delivery on orders over $35 for Prime members in select cities, followed by additional cities in March and April, and plan continued expansion across the U.S. throughout this year. We also expanded the benefits of the Amazon Prime Rewards Visa Card, enabling Prime members to get 5% back when shopping at Whole Foods Market. Beyond that, customers can purchase Whole Foods’ private label products like 365 Everyday Value on Amazon, purchase Echo and other Amazon devices in over a hundred Whole Foods stores, and pick-up or return Amazon packages at Amazon Lockers in hundreds of Whole Foods stores. We’ve also begun the technical work needed to recognize Prime members at the point of sale and look forward to offering more Prime benefits to Whole Foods shoppers once that work is completed.

 

Amazon Go – Amazon Go, a new kind of store with no checkout required, opened to the public in January in Seattle. Since opening, we’ve been thrilled to hear many customers refer to their shopping experience as “magical.” What makes the magic possible is a custom-built combination of computer vision, sensor fusion, and deep learning, which come together to create Just Walk Out shopping. With JWO, customers are able to grab their favorite breakfast, lunch, dinner, snack, and grocery essentials more conveniently than ever before. Some of our top-selling items are not surprising – caffeinated beverages and water are popular – but our customers also love the Chicken Banh Mi sandwich, chocolate chip cookies, cut fruit, gummy bears, and our Amazon Meal Kits.

 

Treasure Truck – Treasure Truck expanded from a single truck in Seattle to a fleet of 35 trucks across 25 U.S. cities and 12 U.K. cities. Our bubble-blowing, music-pumping trucks fulfilled hundreds of thousands of orders, from porterhouse steaks to the latest Nintendo releases. Throughout the year, Treasure Truck also partnered with local communities to lift spirits and help those in need, including donating and delivering hundreds of car seats, thousands of toys, tens of thousands of socks, and many other essentials to community members needing relief, from those displaced by Hurricane Harvey, to the homeless, to kids needing holiday cheer.

 

India – Amazon.in is the fastest growing marketplace in India, and the most visited site on both desktop and mobile, according to comScore and SimilarWeb. The Amazon.in mobile shopping app was also the most downloaded shopping app in India in 2017, according to App Annie. Prime added more members in India in its first year than any previous geography in Amazon’s history. Prime selection in India now includes more than 40 million local products from third-party sellers, and Prime Video is investing in India original video content in a big way, including two recent premiers and over a dozen new shows in production.

 

Sustainability – We are committed to minimizing carbon emissions by optimizing our transportation network, improving product packaging, and enhancing energy efficiency in our operations, and we have a long-term goal to power our global infrastructure using 100% renewable energy. We recently launched Amazon Wind Farm Texas, our largest wind farm yet, which generates more than 1,000,000 megawatt hours of clean energy annually from over 100 turbines. We have plans to host solar energy systems at 50 fulfillment centers by 2020, and have launched 24 wind and solar projects across the U.S. with more than 29 additional projects to come. Together, Amazon’s renewable energy projects now produce enough clean energy to power over 330,000 homes annually. In 2017 we celebrated the 10-year anniversary of Frustration-Free Packaging, the first of a suite of sustainable packaging initiatives that have eliminated more than 244,000 tons of packaging materials over the past 10 years. In addition, in 2017 alone our programs significantly reduced packaging waste, eliminating the


equivalent of 305 million shipping boxes. And across the world, Amazon is contracting with our service providers to launch our first low-pollution last-mile fleet. Already today, a portion of our European delivery fleet is comprised of low-pollution electric and natural gas vans and cars, and we have over 40 electric scooters and e-cargo bikes that complete local urban deliveries.

 

Empowering Small Business – Millions of small and medium-sized businesses worldwide now sell their products through Amazon to reach new customers around the globe. SMBs selling on Amazon come from every state in the U.S., and from more than 130 different countries around the world. More than 140,000 SMBs surpassed $100,000 in sales on Amazon in 2017, and over a thousand independent authors surpassed $100,000 in royalties in 2017 through Kindle Direct Publishing.

 

Investment & Job Creation – Since 2011, we have invested over $150 billion worldwide in our fulfillment networks, transportation capabilities, and technology infrastructure, including AWS data centers. Amazon has created over 1.7 million direct and indirect jobs around the world. In 2017 alone, we directly created more than 130,000 new Amazon jobs, not including acquisitions, bringing our global employee base to over 560,000. Our new jobs cover a wide range of professions, from artificial intelligence scientists to packaging specialists to fulfillment center associates. In addition to these direct hires, we estimate that Amazon Marketplace has created 900,000 more jobs worldwide, and that Amazon’s investments have created an additional 260,000 jobs in areas like construction, logistics, and other professional services.

 

Career Choice – One employee program we’re particularly proud of is Amazon Career Choice. For hourly associates with more than one year of tenure, we pre-pay 95% of tuition, fees, and textbooks (up to $12,000) for certificates and associate degrees in high-demand occupations such as aircraft mechanics, computer-aided design, machine tool technologies, medical lab technologies, and nursing. We fund education in areas that are in high demand and do so regardless of whether those skills are relevant to a career at Amazon. Globally more than 16,000 associates (including more than 12,000 in the U.S.) have joined Career Choice since the program launched in 2012. Career Choice is live in ten countries and expanding to South Africa, Costa Rica, and Slovakia later this year. Commercial truck driving, healthcare, and information technology are the program’s most popular fields of study. We’ve built 39 Career Choice classrooms so far, and we locate them behind glass walls in high traffic areas inside our fulfillment centers so associates can be inspired by seeing their peers pursue new skills.

The credit for these milestones is deserved by many. Amazon is 560,000 employees. It’s also 2 million sellers, hundreds of thousands of authors, millions of AWS developers, and hundreds of millions of divinely discontent customers around the world who push to make us better each and every day.

Path Ahead

This year marks the 20th anniversary of our first shareholder letter, and our core values and approach remain unchanged. We continue to aspire to be Earth’s most customer-centric company, and we recognize this to be no small or easy challenge. We know there is much we can do better, and we find tremendous energy in the many challenges and opportunities that lie ahead.

A huge thank you to each and every customer for allowing us to serve you, to our shareowners for your support, and to Amazonians everywhere for your ingenuity, your passion, and your high standards.

As always, I attach a copy of our original 1997 letter. It remains Day 1.

Sincerely,

 

LOGO

Jeffrey P. Bezos

Founder and Chief Executive Officer

Amazon.com, Inc.

This is a guest post from Ecatherine Matnadze, who serves as the Vistage Spain In-house Leadership Coach - working with me and the leadership team in clarifying goals and staying disciplined in our actions.

When a change plan fails, it is more often than not due to the human dynamics inside the organisation.  It doesn’t matter whether your plan is “good” or “bad”, it matters that you work to build a coalition of support amongst those that will be affected by your plan.

Most leaders can come up with a goal and with a plan. It’s the relationships that make things happen or not.

The 5 Types of People in Any Change Initiative

  1. Committed Supporters,
  2. Compliant Supporters,
  3. Neutral Parties,
  4. Antagonists, and
  5. Active Resisters.

1. Committed Supporters

Committed supporters are people who will go out of their way to help an idea happen. A committed supporter is someone who will take personal risk to make this happen. There is an old story about a pig and a chicken going to a picnic. The chicken brings eggs; the pig brings bacon. The chicken is compliant; the pig is committed.

We want to know who the committed supporters are. Why do they support this idea? How can we leverage them? How can we get them to influence others?

There aren’t going to be a lot of committed supporters in most organisations. But if you can find them, they can be enormously helpful.

2. Compliant Supporters

These are the chickens who come to the picnic with eggs. They’re helpful. They’re supportive. Who are they? Why do they support this? How can we use their support to get things done?

Maybe we can turn them into committed supporters. Maybe we can build the relationship a little bit more so they’ll go from bringing the eggs to bringing the bacon.

3. Neutral Parties

There’s a lot of people who just sit back and watch and wait. They don’t take any risks, they’re not sure, or they’re just neutral. And again, we want to identify them – if we can get more of them on our side, we can get a lot more momentum for our idea.

Who are they? Why are they neutral? And what reasons can we use to influence them to turn them into a supporter?

4. Antagonists

Now we’re moving to the people who are negative. Antagonists are not willing to take personal risk to stop the idea, but they might feel moderately threatened by it; they might not understand it; they might not like it. Sometimes they’re very vocal against it, but they’re still not willing to do anything.

The best you can do with the antagonists is to get them to be neutral. At least get them not to speak out against the idea in meetings. Would you go and talk to them? Maybe you redeploy them somewhere where they don’t have an impact on this idea.

5. Active Resisters

These are the nemeses, the saboteurs. Active resisters feel personally threatened by the idea and will do anything to resist.

It’s very rare that they’re irrational, unless you have done something that’s caused a personal enmity. Usually they have other incentives and it’s a matter of will, of really working hard to get them on your side. Sometimes it’s a matter of changing the way they’re rewarded. Maybe someone with power can talk to them and say, listen, this is moving forward, I need you out of the way.

Sometimes the best you can do with active resisters is to isolate them – maybe they have to move to a different department, or leave the organisation.

You don’t need Everyone to Support you…

It’s said that in any major initiative at most you’re going to get about one-third on your side as committed and/or compliant supporters. Few want to change, and most people are in a state of inertia. It’s okay for people to be negative, you just don’t want so many of them that it’s going to make it impossible the initiative to succeed. You don’t need everybody to support you. The key is finding the right number of people.

________

Ecatherine Matnadze is Certified Executive and Team coach, focusing on coaching top leaders and their executive teams. Having worked as a CEO herself, she understands the demands placed on high-achieving leaders, and helps them balance business results with personal well-being.

Ecatherine is based in Barcelona, Spain. She works with Spanish- and English- speaking clients, both locally and internationally. You should connect and follow her posts on LinkedIn.

This video is about Innovation and the 3 types of innovation as described by Ferran Adrià, the world’s best chef.  He tells us that there are 3 levels of innovation… and that it is type 3 innovation that really moves humanity through a step change in progress.

Read more on Innovation on the blog:

“You can take my life, but you cannot take my freedom” William Wallace (through the mouth of Mel Gibson)

Freedom sounds like good stuff.  Generations have fought and died to allow us the individual freedom that we enjoy today.

Freedom is not the freedom from something, it is the freedom to choose to do or not to do something.  Freedom comes with a price: you are responsible for your choices.

pablo-40

Freedom is a burden.

Freedom is not fun.  Freedom is a challenge for individual human beings to handle.  Few accept complete responsibility. Existential psychotherapists say that people will go to extreme mental contortions to avoid seeing two truths: we die and we alone are responsible for our life.

Andy Warhol said that if he could hire anyone, it would be a “boss”.  Someone who would tell him what to do each day.  It is tiring to have to personally decide what is important and what to work on each day.  Much easier to outsource the challenge to a boss, or a political party, or a guru.

It takes courage to live with the responsibilities inherent in freedom. We have the power to shape our lives, and we have the capacity to take action to create and to destroy. We are responsible for our lives.

Gandhi said that all rights come with corresponding responsibilities. All rights can only be earned by carrying out the required duties. The right to be free comes with the duty of full responsibility for your actions.

Edit 14/12/2016: Added this wonderful animation of this post by @Saminsights

The Source of Passion in our Life

I’ve been meeting a lot of CEO coaches over the last 6 weeks in order to develop my business Vistage Spain.  I am interested in meeting all of the people that CEOs can turn to when they need clearer vision, greater commitment and significant change.

I had a wonderful coffee and discussion with Rabieh Adih, executive coach and founder of Shine Coaching, today.

We discussed passion.  What it is, where it comes from, how it dies, how it is brought back…

My personal position is that passion and meaning can only come from within an individual human being.  It can only come when that person knows that they have given more than has been demanded.  It is only this Chosen Sacrifice that can result in a feeling of meaningfulness in a life.  If you give only the bare minimum, if you treat everything as a transaction…  you will kill passion and find your way to apathy.  It is only by choosing to give more than is necessary that you use your freedom in a meaningful way.

“It all starts with Love” Raul Cristian Aguirre

My friend and entrepreneur Raul Cristian Aguirre wrote recently in the Entrepreneurs’ Organisation Octane magazine.  His message “It all starts with love”.

Now, I’m the first to hate hippy slogans and idealism, but Raul’s message is not about Love in the US Romantic Comedy sense.  He speaks of another meaning.

We often confuse love with liking or love with lust or love with enjoying being in someone’s company.  These are not love.  They can help you get to love.  Love is not a response.  Love is action.  Love is giving when not being asked to give.  Love is to give without waiting for anything in return.  Love is Chosen Sacrifice.

It is only through daily acts of giving more than is asked that we live lives of passion.

These acts must be chosen.  We must give freely.  Thus, freedom is the burden…  but it is the path to a life of passion.

The Freedom to Give More than is Asked by Life

Life places demands on you.  You can pay the minimum price.  There are a whole legion of workers in business that are the “Working Dead”, the “Quit and Stayed”…  day after day after day they deliver the necessary minimum work.  They achieve exalted states of Apathy.  (In Harry Potter, these might be the “Dementors” creatures who feed off your fears).

You can use your freedom to choose to give more than the asking price.

I don’t mean that you pay €5 for tomorrows newspaper.  I don’t mean that you pay €10 for your next bus journey.

The next email you write… take 10 seconds to make it 1% better than necessary.

The next person you pass in the hallway…  take a few seconds to really look into their eyes when you ask “how’s your day?”

The next person you meet with…  ask them about why they work, what is going well, what is not going so well.. and take interest in who they want to become.

Practice giving a tiny little extra in these small things.

This is where passion grows.

“Not all of us can do great things. But we can do small things with great love.” Mother Teresa

 

 

This post describes Corporate Boards –

  1. What do they do?
  2. How do I join one? and
  3. What are my responsibilities as a Director?

i_bannerboard

A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization, which can include a non-profit organization or a government agency or corporation.  In a stock corporation, the board is elected by the shareholders and is the highest authority in the management of the corporation. The board of directors appoints the Chief Executive Officer (CEO) of the corporation and sets out the overall direction for the company.

What does the Board do?

herman-daemsProfessor Herman Daems is teaching today on the IESE Advanced Management Program.  His course is “The role of the Board of Directors in Evaluating and Selecting the Strategy”.  Dr Herman Daems is professor at University of Leuven and visiting professor at Harvard Business School, and currently he is the Chairman of the Board at BNP Paribas Fortis SA/NV.  He has been part of many public, private and charitable boards over his career.

I wrote a few notes as I sat at the back of the classroom.  What does the board actually do?

  • Develop an Ambition for the Company – an ambition is not a strategy.  An ambition might be to “Climb Everest”.  A strategy would be the specific path to gather the necessary resources and execute the climb of the mountain.
  • Find the Leadership to develop a Strategy to realise the ambition – management must develop strategy.
  • Approve a strategy – Important to be clear that a board does not make the strategy, only approve that the leadership’s strategy supports the Company Ambition.
  • Provide Resources (Financial and Human) – importantly the board establishes the dividend policy
  • Balance the Power of Differing Interests (shareholders, management, employees, government, public) – board members must have general business experience.  Specialist members do not make good board members.  Board must make collective general business decisions, not just good specific decisions.  Individual members must have credibility and be willing to raise their hand and make an impact.
  • Monitor and Control Strategy – the board plays a much greater role on controlling strategy than on deciding the strategy.  Management will rarely say that their strategy is not working.  This is where the board is really necessary.
  • Control the use of Resources, control the risks involved – see next item…
  • Assume responsibility for the actions and risks of the company – The Board of Directors have “collective responsibility” for the actions and risks of the company.  Members are not personally responsible.  Some legal attempts to hold a finance expert or an audit committee member personally responsible have always been pushed back by courts on the basis that board is collective responsibility.  In banking crisis, some executives have been held personally responsible, but in no cases have board members been found personally responsible.

 

How do you get onto a Board?

“People often ask me ‘I’d like to make a change in my career and play a role as a board member.’  I first ask how much money they are making now.  I don’t want your role as a board director to be the significant source of income for your life.  If you are dependent on this income, you are not going to be a good director.” Herman Daems

In most countries, board members can be fired at will.  You do not want to depend on this income.

There are 5 specific reasons why you might be appointed to the board of a company:

  • You represent a shareholder or stakeholder of the company – you represent a reference shareholder, a private equity company, a venture capitalist, a strategic owner
  • You bring specific knowhow or capabilities to the board – technological, financial, market knowledge, legal
  • You bring a specific experience – you are a former CEO or a director in other companies
  • You have a reputation for reliability, independence; you bring reputation to the company – …also you are always contactable (crisis happens on Sundays, board is like fire service…  emergencies happen)
  • You have access to a relevant network for the company

 

What is your role on the Board?

  • It is important to find an equilibrium between the interest you represent and the company interests.  A board member is responsible to all stakeholders.  Take into account the specific traditions, structures, culture of this board.
  • Come well prepared
  • Ask questions, be critical… but solution oriented.  Directors who are always critical start to lose engagement with management.
  • Do not get stuck into details (do not become a shadow executive) – do not try to prove how smart, wise you are
  • Be aware of your legal and societal responsibilities
  • Speak your mind
  • Be courageous, remain friendly

Further Reading

  • Do you want to start something?
  • Do you want to grow something?
  • Do you want to make the world a better place?

Rosabeth Moss Kanter is a Harvard Professor that has spent her life looking at what it takes for leaders to get things done.

6 Keys to Leading Positive Change

  1. Show up – if you don’t show up, nothing happens. Be there. Trust that your presence matters and can make a difference.
  2. Speak up – Use your voice. Say what needs to be said. Ask the questions that need to be asked. Shape the agenda. Re-frame issues and give new perspectives.
  3. Look up – Have a higher vision, bring values to the team. Know what you stand for. Elevate people out of the weeds and to a bigger picture of why our work is important.
  4. Team up – Everything goes better with partners. Don’t try to do it alone. Build a sense of partnership.
  5. Never give up – Persist until done. Everything looks like a failure in the middle. It will take longer than you imagine, keep going anyway. Be flexible in your approach, but inflexible in your persistence.
  6. Lift others up – Share success, share credit and give back once you have a success.

Here’s Rosabeth Moss Kanter’s recent TEDx talk:

There are 2 ways to categorize work:

  • cognitive or manual
  • repetitive or non-repetitive.

4 Kinds of Work

There are basically 4 kinds of work:

  1. Manual repetitive – Assembly line factory worker, farm labourer
  2. Cognitive repetitive – Call center operative, Bank teller
  3. Manual non-repetitive – Jewellery maker, Custom car builder
  4. Cognitive non-repetitive – Project manager, Sales of large complex systems

Generally speaking, repetitive manual work requires the least self-management and is the lowest paying, and cognitive non-repetitive work requires the most self-management and is the highest paying.

Are you good at Self-Management?

“We must manage ourselves, and help others manage themselves” Peter Drucker

Peter Drucker wrote an article called Managing Oneself that is still the best summary of Self-Management.  As a summary, you need to be answering these 6 questions:

  • What are my strengths?  Feedback is the only way to find out.  Do you have a systematic process for getting feedback on your behaviours?
  • How do I perform?  How do I learn best?  Don’t struggle with modes that don’t work for you.  (on Mastery)
  • What are my values?  “What kind of person do I want to see in the mirror in the morning?”
  • Where do I belong?  Mathematicians, musicians and cooks are mathematicians, musicians and cooks by the time they are 4 or 5 years old.  Successful careers are not planned, they happen when people are prepared and positioned for opportunities that suit them.  Knowing where one belongs can transform an ordinary person into an outstanding performer.
  • What should I contribute?  Given my strengths, methods and values: what is the great contribution to what needs to be done?  Don’t look too far ahead – 18 months is the range of good planning.  Define courses of action: what to do, where and how to start, what goals, objectives and deadlines to set.
  • Who can I work well with?  Adapt to what makes those around you successful.  Adapting to what makes your boss most effective is the secret of managing up.  Take responsibility for communicating how you are performing; take responsibility for building trust

Past Posts on Work and Money

They lie, they manipulate and they pick fights: Some colleagues are ruthless, especially when it comes to their own professional advancement.

pablo (11)

Avoiding a toxic employee can save a company more than twice as much as bringing on a star performer.  The trouble with Toxics is that they are difficult to detect. Often, Toxics are popular with colleagues, seen as friendly and interested. It’s only after a while that co-workers begin to notice that the Toxic is sucking the joy and engagement of an entire workplace.  Poor leadership creates the perfect breeding ground for Toxics.

Who is likely to be toxic?

Overconfidence and narcissism are toxic.  I know these traits…  because myself, Conor Neill, at age 35 was massively overconfident and pretty narcissistic.

Overconfidence:

What it takes to get the job is not just different from, but often the reverse of what it takes to do the job well.

The main reason for the uneven management sex ratio is our inability to discern between confidence and competence.  Men are more apt to show confidence, women tend to hold themselves back from overconfidence.

Unstructured interviews are a terrible method to evaluate a person for a job – they reward self confident individuals and fail to analyse real competence.

Narcissism:  

High-flying leaders dream of their faces appearing on the front of Time, Business Week and the Economist.  Not their brand, not their team, not their investors…  their own face.  (That was my dream when I was 35 – fame for me).  This is narcism.

Freud told us that there is a dark side to narcissism. Narcissists are emotionally isolated and highly distrustful. Perceived threats trigger rage. Achievements feed feelings of personal grandiosity. Freud thought narcissists were the hardest personality types to analyze.

Narcissistic CEO Larry Ellison was described thus by a subordinate: “The difference between God and Larry is that God does not believe he is Larry.”

The 4 Apocalyptic Qualities of Poisoned People

Harvard Research showed that employees who showed the following characteristics were more likely to be toxic workers:

  1. Overconfident – as described
  2. Self centred – narcism
  3. Productive – individually highly productive in visible areas; note: this is individual rather than team focus on productivity
  4. Rule-following – a stickler for the formal rules

A self-centred, overconfident productive and rule following person will poison their team – taking all the credit, ruining the spirit, enjoying and promoting the failures of those around them.

How to be Un-Toxic?

What can you personally do to be less toxic?  What can you look for in others to ensure that they are competent and serve others?

Jim Collins identifies the 4 characteristics common to Level 5 leaders:

  • Humility
  • Will
  • Ferocious resolve
  • Responsibility: Give credit to others while taking blame upon themselves

How do you achieve humility combined with ferocious resolve?  How do you stay responsible even as you do start to achieve more and more?  I believe there is only one way to keep our feet on the ground:

Feedback from Trusted Peers

You must be surrounded by a group of people who can keep your feet on the ground, but believe deeply in your capacity to be a powerful, positive, valued leader.  There is no way to keep this journey going alone.  We need others to regularly see something in ourselves that we become blind to when left alone.  As the story goes, we are 2 wolves…  alone we feed the bad wolf, supported by peers, mentors, coaches and inspiring people…  we feed the good wolf.

Watch people – do they seek feedback from trusted peers?  If not, they are likely Toxic.

Robert Fritz says that we each have two limiting beliefs: powerlessness and unworthiness.  We don’t have to pretend to be better than we are.  We don’t have to pretend that we don’t do shameful things that all humans do.  The only cure?  Allowing trusted peers to really know us, and let us see what they see in us.

Benjamin Franklin brought together a peer group of 12 friends who would be fully open about their lives, challenges and opportunities.  A group who aspired to live bigger lives, and who worried about the dangers of self-delusion.

I have been part of a peer group forum for 8 years.  Each meeting we push each other to share the real person, not the one we have created to impress others.  I have found over these years that each time I share something that I am ashamed of, it loses its power over me.  Each time I share my real me, the others respond in a more positive way than when I share the carefully crafted impressive version of myself.

For 2016, Get Trustworthy Feedback

In 2016, be sure to surround yourself with people who believe in you, and in turn, make every effort to give them the same gift.

Do you have a trusted group of peers?  If yes, let me know how you found this group.  If no, I’d love to hear from you – I can share some tools to help you get started.  


 

More on Toxic Employees:

More On Peer Feedback Groups

De duodecim abusivis saeculi “On the Twelve Abuses of the World” is a self-help book written by an Irish author between 630 and 700AD.  You could say that it was the earliest precursor to Steven Covey, Brian Tracy or Jim Rohn.

The work was widely propagated throughout Europe by Irish missionaries in the 8th century. Its authorship was often attributed to Saint Patrick (the general view today is that it was not his work).

Duodecim abusivis saeculi

De duodecim condemns the following twelve abuses:

Collectio_Canonum_Hibernensis_Domkapitel_zu_Köln_Codex_210_15v
*Collectio Canonum Hibernensis
  1. the wise man without works; sapiens sine operibus
  2. the old man without religion; senex sine religione
  3. the young man without obedience; adolescens sine oboedientia
  4. the rich man without charity; dives sine elemosyna
  5. the woman without modesty; femina sine pudicitia
  6. the nobleman without virtue; dominus sine virtute
  7. the argumentative Christian; Christianius contentiosus
  8. the proud pauper; pauper superbus
  9. the unjust king; rex iniquus
  10. the neglectful bishop; episcopus neglegens
  11. the community without order; plebs sine disciplina
  12. the people without a law; populus sine lege

Background

This form of document is part of a broad category of medieval literature called “Mirrors for Princes”.  They were developed to educate future kings in the leadership qualities that would be needed in their role as king.  The best known of these works is The Prince by Machiavelli.

The title of this post came from a summary of a talk by Pat Murray.

As a leader, people watch every single act.  If you are in a bad mood and act out of that bad mood, people think that is who you are.  Words are generally ignored, we watch what you allow to happen.

As parents this is even more difficult.  If you say “do this and you will not get dessert” and then give them dessert anyway (because you are tired and do not want the fight) you have taught the children a lesson:  Your rules are flexible and negotiable.  It is hard to trust someone whose rules are flexible and negotiable.

You Stand For What You Tolerate

“The worst use of power is no use of power”

What do you know that is “wrong” but tolerate?  What behaviours annoy you, but you don’t address them?  If somebody arrives 4 minutes late to a meeting, are they allowed to attend?  If somebody sends the report an hour later than agreed, are they sanctioned?

If you allow bad behaviour this is who you are.  Words are cheap.  What you allow is real.

What are your intolerables?  What are the behaviours that you absolutely will not sanction?  If you are not clear on this list, then you will allow bad behaviours to creep in to your culture.  I learnt one clear lesson during the Organisation Behaviour module of my own MBA: “The worst use of power is no use of power”.

It is really painful to confront another person on their behaviour.  It is a lot more painful to be the passive creator of a slowly sickening culture of performance.