[Music]
About the author
Jason Baron MBA is a creative leader
focused on digital product strategy and
user experience.
He is a founding partner of the startup
lowest med that was acquired by retail
me not in 2018 and currently works for a
large nonprofit organization on digital
products that serve millions of users
around the world.
Jason's grandparents, Donald and Dorothy
Collie, both attended Harvard University
and instilled in him the importance of
education at a young age.
He received his master's of business
administration from Brigham Y Young
University in 2017 and his bachelor's
degree from Southern Virginia University
in 2007.
Jason has the unique ability to simplify
complexity and infuse creativity in
business strategy. His Kickstarter for
the original rendition of this book
raised over 1,000% of his goal in 28
days from over 30 countries around the world.
world.
Jason is known to set stretch goals,
never having been able to touch his
toes, he filmed the journey and met his
goal after 41 days.
His video has since received several
million views after being shared by
George Take as well as Yahoo and MSN
News. Jason currently lives in Salt Lake
City, Utah with his wife and five
children. Find out more about Jason at
to Jackie, Josh, James, Jonah, Josie,
and Juny. Preface.
Preface.
In short, this book contains two long
years of business school, all neatly
packaged into one highly illustrated volume.
volume.
Experts tell us that 60% of people are
visual learners. And let's face it,
beyond that, 100% of people don't want
to read boring stuff.
Now, with this book, you can understand
faster, absorb better, and recall
quicker the biggest and most useful
ideas that you would learn from studying
for a master's of business
administration degree. A quick word
about the illustrations that follow.
Years ago, Mike Road coined the term
sketch notes, and I've been a fan ever since.
since.
Rather than taking extensive linear
notes that no one will ever read again,
I felt that simply capturing the main
points visually would create a much more
interesting and useful resource for
later consumption.
As they say, a picture is worth 1,000
words. At the beginning of my MBA
studies, I took on the crazy goal to try
and create sketch notes throughout the
entire program. And something unexpected happened.
happened.
for a class full of extremely smart
people. I was surprised at the high
level of interest they had in my visual
notes as I went along.
What you have in front of you is the end
product of all my sketch notes as I
attended the BYU Marriott School of Business.
Business.
Whether you've never been to business
school or have already attended or are
in a current MBA program yourself, I
created this book with you in mind.
Each chapter is based upon traditional
business school classes and is packed
with concepts that are accompanied with
a written narrative to help you better
understand it all.
Feel free to skim, jump, or dive through
the content any way you want. The only
rules are to have fun, to be curious,
and to discover on your own. You will be
glad you did. Now sit back, relax, and
enjoy all the knowledge soaking into your
your brain.
brain.
Author's note:
You're smart. I just spent 86 class
days, endured 516 hours of various
lectures, completed mountains of
homework, and shelled out tens of
thousands of dollars in tuition fees.
And you can benefit from it all with
this book at a fraction of the cost in
the comfort of your own home.
Nice business decision. My name is Jason
Baron and I'm a designer. I've always
been doodling sometimes when I shouldn't
te like in class as a kid. Fast forward
20 years and not much has changed
except that I decided to put my lifelong
doodling habit to work when I received
an MBA from a top 40 business school,
Brigham Y Young University.
Each class period, I would sketch note
what the professor was saying, including
key thoughts during class and from
reading assignments.
I would capture the essence of what was
being taught and then I would distill
the complex lectures into simplified
concepts. The end result is this book
which is worth more than gold.
It is the goose that keeps on giving
luscious golden eggs in the form of
paper pages.
Save yourself countless hours and read
this book in a fun, fast, and memorable
way. You ready to get smarter? Let's get
to it.
Leadership is more than management. It's
about inspiring change and improving
results through who you are and how you
motivate others.
Fundamentals. One, strategy.
strategy.
Creating the future vision and
positioning the company for ongoing success.
success. Execution.
Execution.
Building organizational systems to
deliver results based on the strategy.
Talent management.
Motivating. Engaging and communicating
with employees.
Talent development.
Grooming employees for future leadership.
leadership.
Personal proficiency.
Acting with integrity. Exercising social
and emotional intelligence, making bold
decisions, and engendering trust.
What is your leadership?
Brand brand.
When people see you, what do they think/
feel about you? That's your brand.
Five steps
to building a brand that
gets results.
One, nail down the results you want to
achieve over the next 12 months. Make
sure to consider the interests of your
customers, investors, employees, and the
organization as a whole.
Two, decide what you want to be known
for looking at your results. How do you
want to be perceived? Pick six
descriptors that you want to be known
for. Example, humble, optimistic,
dedicated, etc.
Three, combine to define. Combine your
six descriptors into three two-word
phrases. Example, humbly optimistic,
selflessly dedicated, etc.
Four, create your leadership brand
statement and test it. I want to be
known for being so that I can deliver.
Then ask, does this best represent me?
Does it create value for my stakeholders?
stakeholders?
Are there any risks?
Five, make it real. Share your brand
with others and ask if they feel it
aligns with how you truly behave. Make adjustments.
adjustments.
Most importantly, your brand is a
promise. So, make it real and deliver.
Pre-adjust your attitude.
Adjust your posture. Smile.
Smile.
Make eye contact.
Raise your eyebrows.
Shake hands.
Lean in.
Move your employees from being
disengaged to engaged with autonomy,
mastery, and purpose. Give them the
freedom to be creative, to be good at
what they do, and to have a purpose
behind their work.
If you want to be happy in your job, you
need to hit the sweet spot. You need a
balance of competence, passion, and opportunity.
opportunity.
Change the context of where people work
and people will change.
What is the smell of the place?
Although it is hard to change people,
nothing changes people faster than
changing their environment. Their
environment then shapes the culture.
Look around. What is the smell of the
place they work? Is it stuffy,
compliance driven? Is it quiet? Are
there cubicles that block them from
others? Does it feel dead? That is your
culture. Change that and people change
along with your culture.
Manage your energy, not your time.
Some stress is helpful to increase
performance. But there comes a point
where performance drops. Make sure to
take breaks, exercise, and relax to
maintain performance. Context includes
the reward system, goals, culture, tone,
and environment that the team will be
working in.
Composition includes who is on the team
and their skills and personalities to
get the job done. This is where hiring
the right people who mesh with the team
is critical.
Competencies includes having the right
people whose combined skill can solve
the problem. It's about setting the
right goal and leveraging
the team's skill to achieve it.
Change includes the team's ability to
adapt to rapidly changing circumstances
while working towards the goal.
Accounting is the language of business.
Unless you are keeping track of how your
company is doing, you won't know how to
improve it. Everything in this course
revolves around these three financial statements.
statements.
You are the new CEO of a lemonade stand.
You need a loan of $50 to buy some
assets. You purchase a stand for $20 and
have $30 left over.
Snapshot in time comprised of
Okay, so at any given point in time, you
have assets, liabilities, and equity.
The secret is assets equals liabilities
plus equity. That's called the
accounting equation. Your loan was $50.
You used it to buy a stand for
$20 and have $30 cash. You have $50 debt and
and
$50 of assets. A= L + E.
Accounting equation.
A= L + E. assets,
assets, liabilities,
liabilities, equity.
equity.
Bam, you just sold $90 worth of
lemonade. Nicely done. Your balance
sheet looks something like this. Now, a
balance sheet is a snapshot in time and
is a good indicator of your net worth as
a business. Now, let's jump into your
income statement.
Revenue expenses equals net profit. Revenue
Revenue sales
sales
$90. Cost of goods sold $20.
$20.
Gross profit $70
$70 $1.70/doll
$1.70/doll
90= 77%.
Operating expenses administrative
administrative $3.
$3.
Operating income $67
$67 $167/doll
$167/doll
90 equals 74%.
Remaining expenses taxes
taxes
$2 interest $1.
$1.
Net profit $64
$64 $164/doll
$164/doll
90 equals 71%.
Sure, you sold $90, but the cups, sugar,
and lemons cost $20.
Your gross profit is $70.
You also had to pay for some
administrative overhead. That left you
with $67 operating income or EBIT.
You then need to take out interest and
taxes, which leaves you with a net
profit of $64.
Common-sized financial statements are a
great way to figure out how you are
doing over time or to compare one
company in a similar industry with
another. All you do is divide everything
by sales to see where any differences are.
are. Revenue
Revenue
yearto-year 1 sales
dollar 90010 0% 67% cost of goods sold $20
$20
gross profit
$1.70 78% 33%.
Operating expenses administrative
administrative $3
$3
operating income $1674% 31%.
31%.
Remaining expenses taxes
taxes
$2 interest $1.
$1.
Net profit $16471%
$16471% 28%.
28%.
Proforma is just a fancy way of saying
what the future could look like.
It is forecasting based on an increase
in sales. Look at your financial
statement and everything on it that is
dependent on sales. In this case, let's
say cost of goods sold and
administrative expenses both increase
with sales.
If sales increased by 20%, what would
our net profit be? Look at the previous
page and see that COGS was 22% of sales
and your administrative expense was 3%.
When increasing $90 by 20%, you then
figure out what 22% and 3% of $18 are.
are. Revenue
Revenue
Pro for sales
sales
$190 108 cost of goods sold $1203.76
Gross profit $17084.24
operating expenses administrative
administrative
dollar $33.24 24
remaining expenses taxes
taxes
dollar2 interest $1
$1 $1
$1
net profit $164.78
financial ratios are a great way to
compare how you are doing over time to
diet diagnose any issues or to see how
one company in a similar industry stacks
up against another. Here are some of the
most common
debt to equity financial leverage. How
much debt is used to finance your assets.
assets.
Total liabilities/shareholder equity.
equity.
Current ratio liquidity. Your company's
ability to pay back short-term obligations.
obligations.
The higher the ratio, the higher the capability.
capability.
Current assets/current liabilities.
Return on equity profit generated with
money invested by shareholders.
Net income/shareholders equity.
equity.
Net profit margin efficiency at cost
control in converting revenue into
profit. The higher the number, the better.
better.
Net profit/net sales.
DuPont framework. Dupont framework.
This is a combo equation that shows some
of the strengths and weaknesses of the
company and how they affect the return
on equity.
Row equals net income sales X sales
assets X assets equity.
How shares work?
When starting your lemonade stand, you
established that there would be 100
shares. You took on a business partner
and now each of you owns 20 shares.
where the business stands. You now both
own 20% of the business. Your company is
worth $24 now. So, how much is each
share worth?
Company worth $24. $120/100=
$120/100=
$24 per share.
Each owns 20x24
Entrepreneurial management is about
solving unknown problems with unknown
solutions. The key to solving
uncertainty is by identifying pain and
the key to finding the right solution is
by experimentation.
Enlightened trial and error succeeds
over the planning of the lone genius.
Peter Skilman preso
run your experiment.
Start with what you know then what is
unknown. Design your experiment,
conduct, learn, and around and around
you go until you have a successful product.
product.
Your idea needs to be desirable,
feasible, and viable. If any of those
are missing, your product is limited out
of the gate.
Pain, the essential ingredient for innovation.
innovation.
Look around for makeshift solutions that
people have created in absence of a
product. The deeper
the pain, the greater the opportunity.
Any problem or unmet need that customers
will spend their time or money to solve.
Gaining broad adoption takes a balance
of price, benefits, ease of use, and
ease of purchase. If there are strengths
in all these areas, the percentage of
adoption will be much greater.
Adoption scale.
Simplicity is the ultimate
sophistication. Steve Jobs.
When you start looking at a problem and
it seems really simple with all these
simple solutions, you don't really
understand the complexity of the
problem. Then you get into the problem
and you see it's really complicated
and you come up with all these
convoluted solutions.
That's where most people stop. But the
really great person will keep going and
find the key. The underlying principle
of the problem
and come up with a beautiful elegant
solution that works. Steve Jobs.
Spend your energy on the
most profitable.
You may have the best idea for something
that isn't all that profitable or that
big of a pain for people. Find the areas
of unresolved pain that are also as
profitable as possible.
Maximize your revenue by mapping it out.
Identify which activities and customers
it is coming from. Also look at reducing
any friction points for receiving the revenue.
revenue.
Pricing is one of the most critical
aspects of creating new products.
Priced too low and you leave money on
the table. Priced too high, you lose
customers. The trick is finding ways to
price it just right. One of the best
ways to shed light on the right price is
by surveying customers.
Ask how much would you be willing to pay
for this? How many times per would you
pay X?
Stanford's D. School came up with this
brilliant process for innovation.
This is a rapid way you can discover new
innovations and validate them.
When Walt Disney was building his theme
parks, he would get down on one knee to
see the park from a child's perspective.
Empathy is the critical first step to
understanding your customers world and
building products or experiences that
meet their needs.
Based on what you learned through
empathy, what is the problem you will
focus on solving? Craft an actionable
problem statement.
Now take what you learned with the
problem in mind and start coming up with
ideas. The more ideas, the better.
Filter your ideas down and build a
prototype. This can be out of duct tape
and paper. This prototype is only to
validate your idea and to test it with
people. It doesn't need to be fancy.
Find some people who fit your target and
test your prototype. What worked? What
didn't? What did you learn? Take those
learnings and go back to ideate
rightward arrow prototype, rightward
arrow test. Again,
managerial accounting is for internal
use in order to inform decisions unlike
corporate accounting which is for
external use.
You track fixed and variable costs
separately and don't unitize them as
they are fundamentally different. $10
rent is fixed whereas the more lemonade
you sell, the more the costs increase.
CVP analysis sounds fancy but it's simple.
simple.
You simply take what your sales price
is, subtract the per unit cost, and then
multiply it by the volume you anticipate
selling. This helps you understand how
changes in cost will affect operating
and net income.
Revenue cost equals contribution margin.
margin.
Contribution margin sounds fancy too,
but it's just what you have left over
per unit after subtracting the cost to
contribute to paying your fixed cost.
So, we sell our lemonade at $1. Sugar
and the lemons cost 75 per cup. So, we
have a 0.25 profit that can contribute
to paying our $10 fixed cost for rent.
Here is where it gets cool. You are
planning out your business and you
think, "Gee, my rent costs $10. My
lemonade sells for $1, and I make a.25
profit. How many cups do I need to sell
in order to cover rent?"
$110/ equals 40.
Cups need to be sold in order to break even.
even.
Sweet. Now you're moving. If you sold $160
$160
worth of lemonade, your variable cost
would be $120.
Apply the remainder to your fixed cost
and you just made a $30 profit. That's
how it's done.
Activity-based costing is important in
understanding the overhead costs that
happen in the normal course of business.
Analyzing these will help you know which
activities are worth continuing by
surfacing what they really cost.
The management process is fairly straightforward.
straightforward.
Planning, controlling, and evaluating
will help inform your decisions.
Suboptimal procurement, deployment, and
distribution of financial capital lead
to the suboptimal use of natural
resources, labor, and innovation in an
economy. We are focused in this course
around optimal deployment.
Go/ nogo decisions,
asset purchases and sales operational efficiencies.
efficiencies.
The capital chain starts with capital
that is used to buy assets to create
products that generate sales and
increase net income. Financial ratios
can help analyze how efficiently we are
managing the capital chain.
All goods and services are influenced by
time. The utility of cash is future cash
flows and those cash flows are
influenced by time. $100 now VS
receiving in 5 years changes the value.
Next, we will look at how this can be calculated.
calculated.
The next part seems intimidating, but
it's really cake. You know intuitively
that getting $1,000 now isn't the same
as getting it in 5 years. There is a lot
you could have done with that cash. So,
what is $1,000 in 5 years really worth
right now?
You could invest it somewhere else and
get a return, but you also need to
factor in some risks in case someone
won't pay up. Those are accounted for in
the discount rate.
Let's break this beast down. PV, that's
what you are trying to figure out. CFT,
that's just the lump sum in the future.
So, $1,000 in this case. That's just
adding 1 + 4%.
T, that's just five. Bam. Now you know
what it's worth.
Armed with this power, you can tell
whether or not a $2,000 mower is really
worth the investment when you look at
the cash flow it will bring in down the road.
road.
Marketing is about promoting products
and services. First rule, you don't try
to serve everybody. You segment the
available market. Then target a segment.
Then position the product.
Who is your customer and who
is not.
This is one of the most difficult steps
in marketing. We want to sell to
everybody. But if we try that, we end up
watering down our product messaging and
it doesn't appeal to anyone. Get focused
on who your target is and then position
it from there.
Segmentation and targeting can be
approached like this. As much as we
would love the whole world to be our
customer, it ain't going to happen.
Instead, look at the potential market,
then the actual available market.
Segment it and target the most valuable
potential customers.
Lattering is a great way to map out your
product. See how it connects with your
target and decide how to use that to
create marketing materials.
Ask your biggest fans what they like,
why they like it, why that matters, and
how that connects to a highlevel
personal value. The link between the
product and personal benefit is where
the magic happens.
Now you can position your marketing
materials through the love group's eyes
while targeting the swing group to gain
new customers.
Let's take our lemonade business and do
some love group interviews. You should
end up with a lading hierarchical value
map like the one below. When you notice
patterns of responses, you can bold
those lines and focus on the ones that
are on the personal relevance bridge.
When working through new ideas and
marketing them, make sure you can pass
the limus test above. The more of these
dimensions you have, the sharper your
angle. Also, a good way to find out if
you have a good idea is to ask if people
would buy it and for how much. Ask
Ask
on a scale of 1 to 10, how likely are
you to buy this?
Anything over a potential now?
Brands are not logos, graphics, or slogans.
slogans.
Those are artifacts that can help with
familiarity with your brand, but a brand
is much deeper. What impression is left
on your customers? What are your touch
points with them?
Branding essentials,
resonate with consumers,
differentiate from competitors,
motivate employees.
What? We bring kids happiness. How? By
making toys.
Why? Because children are out future and
each one deserves to smile in a
darkening world.
We think people care about what we do or
how we do it. Actually
they don't. People care about why we do
what we do. That is who we are at our
core and that becomes our brand mantra
which acts as guard rails on all
decisions we are considering.
Ask does this decision align with our
core. If not don't do it.
Brand mantra
what we are at our core.
Ops management is broken down into three
parts. You are designing, managing, and
improving a set of activities that
creates products and services and
delivers them to customers.
Whenever starting a new position or
responsibility, don't feel overwhelmed.
Keep calm and map the process. Look for
complexity and simplify.
Understand the current operation.
Understand the performance. Understand
performance required by customers.
performance, capacity, efficiency,
max output units per unit of time, utilization.
utilization.
You have 100 workers who normally work 8
HRs. If in a day there were only 700
hours fully consumed, you would be 87.5% efficient.
efficient.
Lead time. The time between a request
and the delivery of your product to the customer.
customer.
Throughput. The amount of a product a
business can create within a period of
time cycle time. The total amount of
time from the beginning to the end of
the process capacity. Maximum output
from a process measured in units per
unit of time.
Efficiency of business performance
standard. All processes are leveraging
resources in the most optimal way.
Bottleneck a process in a link chain
that is slow reducing the capacity of
the whole.
Is your lemonade stand running efficiently?
efficiently?
Let's check out your process and see how
it's doing.
Unit equals
throughput equals 1 unit at 250.
Bottleneck equals
capacity equals five units per 1210.
Filling the pitcher happens every five
cups. Depending on your demand, you
could constantly be making five cups at
a time in a batch to meet demand.
Unless you were reducing a cycle time or
removing a bottleneck, each batch would
take 12 minutes and 10 seconds. Unless
you hire more people, that is your max capacity.
capacity.
Now, if you usually produce five batches
an hour, you can then figure your
capacity utilization.
If you only produced 17 cups this hour,
your capacity utilization would be
1725ths equals 68%.
This is a simple example, but the
principle can apply anywhere. Keep calm,
analyze the process, find ways to
improve, and then do it.
Most business problems are symptoms of
deeper human or organization issues.
Improve at the HR level and you will
improve the business overall.
People management can be systematized to
remove variability and to increase predictability.
predictability.
We make mistakes based on intuition. If
we feel they are the right fit, we hire
them. If they are like us, we like them.
The more reason to be systematic
systematic when
when hiring
hiring
a bias proof way to interview and hire.
Systematic hiring.
One, identify purpose for hire.
Two, put together job definition.
Three, define tasks.
Four, prioritize tasks.
Five, define needed competencies. X
operations management.
Six, ask behavioral questions and rate
responses. X, tell us about a time when
you created a new operational process.
Seven, hire and on board.
Eight, evaluate employee.
So, how do you motivate employees?
See how you hold up with the motivating
potential score. This measures how
motivated your current employees are. Hersburgg's
Hersburgg's
motivation hygiene theory
track high potentials facilitate their development
development
performance management set performance expectations
expectations
measure results
provide feedback
reward or correct
team success levers
when meeting any kind of resistance
appeal to the emotions. Logic is like a
man riding an elephant. Guess who
decides where to go?
The negotiation framework is simple yet
powerful. Apply this framework and get
what you want much more often.
Compliments don't cost much, but they
are effective.
What do you want them to think of you?
Fair and honest, knowledgeable. Done
homework, walk away.
Sources of individual power.
Legitimate power. Judge,
Judge, police,
police,
reward/coercive power,
scarce resources,
expert power, skills,
skills, knowledge,
knowledge,
referent power.
Dash X sent me diplomats,
diplomats,
personal power, charm,
charm, charisma,
charisma, politicians,
politicians,
critical attributes,
even temperament, discipline,
discipline,
excellent listener.
Three attributes of persuasion.
One, power preparation, expert,
personal. Two, credibility.
I don't know right outcome. Three, attractiveness.
attractiveness.
Message messenger listens, builds trust,
pays attention. Goals,
Goals,
interest setting,
needs, alternatives matrix.
Parties with more alternatives and lower
needs have the most power. How can you
put yourself in a position of power when negotiating?
negotiating?
Also, how can you adapt to a situation
where the other party has more power? Critical
Critical
role play before the negotiation. The
game changer role play both sides know
it better than they.
Pro tip, write out your opening
statement ahead of time.
The earlier you discuss money, the less
money you will get.
Principled negotiations separate people
from problem. Focus on interests, not
positions. Look for options for mutual
gain. Use fair standards and procedures.
Cognitive anchoring.
Explanation first, then conclusion.
This pen went to the moon and back. It's
only $8,000.
What is your goal?
Your goal is paramount. Do you want to
be right or do you want to achieve a
happy marriage? Sometimes you can't have both.
both.
Who are you negotiating with?
The more you know and understand this
person, the better your chances are of a
successful negotiated outcome. What are
the pictures in their head? What keeps
them up at night? What are their hopes
and dreams? Three,
Three,
what is your incremental plan?
Being incremental wins every time. VS
trying to get everything right off the bat.
bat. One,
One,
the five
competitive forces that share strategy.
These five forces can determine the
long-term profitability of a company.
The higher the threat, the lower the
profits. Either build a defense against
these forces or find an industry where
the forces are weaker.
Do things differently.
differently.
Appeal to a customer segment. Find a
base of differentiation and the
competition's advertising will have no
effect. Be so amazing that customers
naturally prefer you. Competition.
Competition.
Find ways to do the activities differently.
differently.
That satisfy a customer/market need/desire.
need/desire.
Differentiation just takes creativity.
Look around and find some object. If you
were selling that object, how would you
differentiate it? If someone can do this
with commodities, you can too
recognize things as they really are
rather than what they ought to be.
During the Civil War, the Confederate
Army at Gettysburg had a better
strategy, but they didn't recognize and
adapt to new circumstances.
The result? Well, you know the rest.
A company creates a strategic advantage
when it has various connected activities
that support its core differentiating
value. Southwest was able
to beat other airlines with low ticket
prices by using auto ticketing and a
standardized fleet along with frequent
reliable departures and by using a lean,
highly trained staff.
How do you make your company like
Disney? That's what strategy is all about.
about.
product, marketing, messaging,
positioning, customer service, etc.
Equals overall magical experience.
Customers have such passion for you that
they are impervious to the competition,
making the competition irrelevant.
Competitors change the game. You may
think all is well with your projections,
but did you consider what happens when
someone else enters? Will it change your
sales price and have an impact on your
profits? You have to think through the
various scenarios before going allin
perspective from customers or competitors.
competitors. VRIO
VRIO [Music]
[Music] framework
framework three.
three.
Running your idea through the VRIO
framework can help determine whether or
not you will have the chance for a
sustained competitive advantage.
There are two types of strategy with
regards to competition. Red and blue
oceans. Red oceans are filled with competition.
competition.
Before the Ford Model T, the automobile
landscape was expensive. Henry Ford
decided to create an uncontested market
space with a cheap alternative and one.
Alliances are critical in expanding your
business, but they need to add value
that you couldn't get on your own. If
Mike can make 10 cups and two lemons an
hour and John the opposite, you could
form an alliance to produce more of both
faster. Make sure you can articulate
what specific
value they provide. And no matter what,
make sure you have a legally binding
contract set up.
You need a contract
with alliances.
Can you articulate what value they provide?
provide?
Business ethics is more than just
keeping you out of jail. Living
ethically leads to a more fulfilling
life, enabling you to leave a legacy you
can be proud of.
Disclosure test.
When in doubt, ask yourself, would I be
okay if this decision ended up on the
5:00 news? If not, then don't do it. Emotion
Emotion
causes short-term thinking.
A critical element is moving from
short-term thinking to long-term thinking.
thinking.
Most ethical issues arise from emotion
which causes us to think in the short
term. All you need to do is to stop and
to remember your goals of who you want
to be. Will this decision reinforce or
take away from that image?
Decision process.
As emotions are high when ethics are at
stake. Use this simple process to help
guide you in making ethical decisions.
One, stop and think.
Don't react. First, just stop and think.
Two, gather facts.
Now you can gather all the facts and
information. Is what you are deciding on
critical? Can it wait? Who is involved?
What's at stake?
Three, brainstorm solutions.
Your decision is only as good as your
best alternative.
Take time to brainstorm as many
solutions as possible. Four, decide.
Now it's time to weigh your decision
against whether or not it is ethical. It
helps to run things by others to make
sure your judgment isn't clouded.
Entrepreneurial finance is all about
creating value as quickly as possible
through a series of strategic activities.
activities.
Entrepreneurial finance process.
What is your end game?
The goal is always the harvest and how
to get there as quickly as possible.
There are tons of opportunities out
there. It is just up to you to find
them. The following are some opportunity
sources where you should always keep a
finger on the pulse.
Create an industry that solves the
problems that arise from these factors.
Before diving head first into your idea,
make sure it is feasible. You will be
spending a lot of time on it, so you'd
better do some validation first. Look at
your internal and external forces and
then map it out with a SWAT analysis.
When looking at any new venture, it is
helpful to put it through a good
screening. Two ways of doing this are
through both a quantitative and a
qualitative screen. The higher the
score, the more appealing to investors.
Quantitative screening.
Quantitative and qualitative screening
of a new venture removes emotion and
provides the data you need to make a
wise decision.
First, do a quantitative screening and
see how close to a score of three you
get. Then take a look at the management
team and ask questions to flesh out
their vision, knowledge and plans for
the future.
High growth best practices
practices
marketing practices
develop best product or service.
Highquality product or service.
Product commands higher prices.
Efficient distribution and superior support.
support.
Financial practices.
Prep detailed monthly financial plans
and annual financial plan for the next 5 years.
years.
Effectively manage the firm's assets,
financial resources, and operating performance.
performance.
Management practices.
Assemble management team balanced in
both functional areas and industry knowledge.
knowledge.
Collaborative decision making.
Any new venture goes through five stages
that correlate with fundraising.
This starts with the initial development
and seed financing to get you going all
the way to early maturity.
When working with BCS, they are looking
for a 3x 6x return and will need a
written agreement. Always remember that
in the world of private equity, your
reputation means everything. Be true to
your word and deliver on what you promise.
promise.
It's all about
reputation. Reputation,
business entities.
When starting a business, it is
important to know the positives and
negatives of the various business
entities before you choose one. Each one
can have important implications
regarding your exposure to liability and
taxes. Here they are below.
Sole proprietorship.
simple and the most common among the
entities. It is unincorporated and
doesn't make any distinction between the
owner and the business. But with the
simplicity comes some risk. Without a
distinction between the owner and the
business, your personal assets are at
risk if someone decides to sue you. LLC
LLC
LLC stands for limited liability corporation.
corporation.
This is usually a better choice over a
sole proprietorship as it creates a
legal buffer between the owner and the
business. This entity combines the
characteristics of a sole proprietorship
and a corporation escorp.
escorp.
More complicated with added rules and regulations.
regulations.
With that said, this might be preferable
if you are looking for outside financing
or issuing stock. Having the flexibility
to issue stock is always nice as it can
incentivize partnerships or provide
additional help with the business. Ccorpor
Ccorpor
are like escorp but are taxed twice.
Core can have unlimited shareholders
whereas escorp can only have a max of
100 and they must be US citizens.
The five C's of credit are what lenders
use when evaluating potential borrowers.
character can also be referred to as
credit history. This is the info on the
credit reports of the borrower. These
reports show how much you have borrowed
over time and whether or not you have
repaid your loans on time.
Capacity is your ability to repay the
loan. This is a comparison of your
current income against your recurring
debts. Lenders are also looking at how
long you have been at your current job
when making this assessment.
Capital is what you as a borrower are
already putting towards the investment.
This helps lenders feel more secure that
you won't default on your loan.
Collateral is the assets you put up as
security in the event that the loan
defaults. This gives the lender options
to liquidate your assets in order to get
their money back.
Conditions include the amount borrowed,
the interest rate, and how the borrower
plans to use the money. The clearer and
more focused the purpose, the greater
the chances of getting the loan approved.
approved.
Decisions affect your life and happen on
a daily basis. Learn how to make the
best ones possible in order to achieve
stellar results.
This model works wonders. It is dead
simple, but can speed up the
decision-making process significantly
and help you land in the right spot.
This is the most important step. Make
sure you put together a well-posed
decision problem and that it is the
right problem to solve. Example, which
gym should I join? BS, how might I
improve my health?
One by one, go through your objectives.
Ask the question, what do we want from
this? Then ask why. You might be
surprised at what you discover.
This part is so important. You will only
make a decision as good as your best alternative.
alternative.
Take time to come up with a number of alternatives.
alternatives. Consequences
Consequences
on a spreadsheet. Map out your
objectives in the column on the left
with all your alternatives along the top
and then weight them. Then go through
each alternative and score it one to
three based on how well it
meets each objective. This will give you
a pretty good indicator which direction
to go.
Car one, car two, car three,
comfort, three, three,
three,
two, roominess. Two, three,
three,
two, attractiveness. Two, three.
three.
Three. Low miles. One. One.
One.
Three. Condition. Three. One.
One.
Three. Price. Two. One.
One. Three,
Three,
you should have a pretty good idea by
now which direction to go, but it is
good to look at the trade-offs you will
need to make for any alternatives that
are close.
New golf grip. Practice swinging 100
times feels weird at first, then becomes natural.
natural.
This is a great model to help you make
better decisions, but it isn't natural.
With focused practice, it will become
second nature to you. Practice,
practice, practice.
How often have you been in a situation
where people rushed to solve a problem
only to find out it was the wrong one?
This is a common decision trap that
happens too often. Below are a few
common traps we all fall into. Beware traps.
traps.
Absence of a simple powerful share
judgment process model.
The rush to solve we end up solving the
wrong problem.
Specify, articulate and evaluate the
decision trigger
thing that makes you aware of the
problem. Tip could be an alternative
masquerading as a problem.
I this really a problem or an
alternative job recruiter calls. Take
job not a problem.
The magic question.
We all look at the world through
different perspectives.
The more you can see the world from
others perspectives, the better off you
will be.
Identify your frame others frames.
This is hard. Cognitive dissonance. Give
yourself permission to disagree after.
This isn't easy, but it can be done with
some practice. Take a hard topic that
you don't agree with and give yourself
permission to see it from an opposing
perspective. The more angles you can see
it from, the more informed you will be
to make a better decision.
There are two types of thinking, system
one and system two. Our minds generally
default to system one because it is
faster and simpler.
This can be dangerous if we always
default to system one for tough
decisions. The two best ways to battle
this are to be aware of the various
biases and to follow a structured
problem-solving method.
Availability heristic representativeness
heristic prospect theory anchoring and
insufficient adjustment over confidence
motivated reasoning.
Availability heristic people base
predictions on how easily an example can
be brought to mind.
Representativeness heristic people judge
the likelihood of an event's occurrence
by the degree it represents the data.
Prospect theory people are loss averse.
They prefer avoiding loss to acquiring
gains leading to risk-seeking in loss
domain and risk averse in the gain domain.
domain.
Anchoring and insufficient adjustment.
People tend to rely too heavily on a
number anchor when making decisions.
Overconfidence. People tend to be
excessively confident in their predictions.
predictions.
I am 99% sure they couldn't hit an
elephant at this dist.
Jen do John B. Sedwick.
Motivated reasoning people tend to
evaluate evidence in ways consistent
with their preferences.
General management is all about solving
problems and resolving issues all being
accomplished with only limited
knowledge. In order for you to help get
problems solved, you need to help others
frame the problem correctly and to help
guide them to the solution.
Problem solving basics.
Structuring the problem begins by first
coming up with a smart problem
definition. Then from there creating an
issue tree with all the possible answers
to the question.
Structuring the problem.
My greatest strength as a consultant is
to be ignorant and ask a few questions.
Peter Drugger.
Once you have created your issue tree,
start testing assumptions, gather data,
and cut off branches that don't apply
anymore. This helps you get to the root
cause and start getting to real solutions.
solutions.
It is important to have your goal that
you are solving the problem with front
and center. Focus on a goal that has the
highest benefit with the lowest cost.
Solve the problem with highest benefit
plus lowest cost.
As a consultant, you need to provide
good recommendations.
Below is a basic flow when making
recommendations to clients.
Good recommendations.
Why learn about change? Great solutions
can fail if the org isn't ready.
Change is emotional.
Find ways to nudge change in the right direction.
direction.
For example, rather than having you cut
back on your food, just start using
smaller plates.
In order to motivate people to change,
you must help them to see and feel the
importance of the change.
Change follows an unfreezing of how
things have always been, opening up the
opportunity for change. Change requires
ending the past, leading to a period in
a neutral zone, and then settling in the
new beginning.
Every beginning ends something.
Paul Valerie.
People need to do all three at the same time.
time.
A good example of this is when someone
gets married. Exchanging marital vows
kicks off the new beginning and requires
that the couple end the past of being
single and what they were comfortable
with in that previous life.
This causes them to be in the neutral
zone for a time. Believing that the
future will be better will enable them
to embrace the new beginning.
Relinquishing the past and truly changing.
changing.
It is better to go through this process
than deny it. Otherwise, the
consequences will be catastrophic.
Change is a cut off.
However, transition isn't as cut
and dried.
Purpose. Why are we moving?
Picture. What will it look like?
Plan. How will we get there?
P where?
When introducing people to the process
of change, help them understand the
purpose, picture, plan, and their part.
Be patient and remember that although
the plans may make sense to you, they
may not be there yet or have all the information.
information.
One, remember the marathon effect. You
may have already changed, but others haven't.
haven't.
Measure twice, cut once, plan and
prepare. It is worth the time.
Proceed informally slash small at first.
Build momentum and then proceed formally.
formally.
Large organizational change needs to be
strategic, calculated, and precise. It
can't be a shotgun model. It has to be
more like precise rifle shots.
Shotgun VSS rifle shots build the love group.
group.
Warning, gross. Picture this. You are at
dinner with your family and there is a
dead dog on the center of the table, but
no one talks about it. That is a
dysfunctional family. Do you have a
dysfunctional organization?
What isn't being talked about?
Hallmark of a dysfunctional family.
Remember, this needs to be precise.
Sharpshooter precise. Ready, aim, fire,
timing, sequencing, and credibility are
everything. Plan out your communication
strategy and get the right people on board.
board.
A change management strategy works by
influencing the right people in the org.
By taking a look at history's leaders,
we can learn from their successes as
well as their failures.
General Lee's men didn't know why he
gave certain instructions or why he
failed to communicate his thoughts. As a
leader, it is easy to have the vision in
our minds, but if we don't communicate
it effectively, we will lose the war.
At a critical time, General Lee didn't
listen to his generals and was unable to
adapt to the changing circumstances
around him. Frequently, taking inventory
of the situation around you and adapting
will help you stay on top.
Winston Churchill was a leader who was
strategic in all he did, including his
career, as he intentionally took
specific positions to increase his influence.
influence.
Churchill valued these character traits
as a leader, and they served him well in
his leadership capacity.
Success is going from failure to failure
without loss of enthusiasm.
enthusiasm. Churchill
Churchill
one, make key strategic decisions first.
Two, choose top leadership.
Three, give clear direction. Then clear
the way for them to act effectively. Responsibility
Responsibility
needs equal authority.
authority.
For individuals to be successful, when
given a responsibility, they need to be
given equal authority in order to carry
out their duties. Otherwise, it will
only lead to failure. Churchill felt
that the further back you could look in
history, the further ahead you could see,
see,
the further back you can look, the
further ahead you can see.
Collective decision-m
leads to temporizing.
Counseling together is different than
collective decision making. One is about
gathering the best insights to help
inform a decision. The other only leads
to temperizing which is ineffective.
Strong leadership listens but also knows
when to make a decision.
The Americans rocked the Nazis at the
Battle of the Bulge due in large part to
Eisenhower's leadership. He led in
almost opposite manner and approach to
Hitler and it served Eisenhower well.
The problem today is most people spend
time consuming versus creating. Make a real commitment to start creating. It
real commitment to start creating. It will benefit both your personal and
will benefit both your personal and professional life.
professional life. When brainstorming, the game is all
When brainstorming, the game is all about getting out as many ideas as
about getting out as many ideas as possible. Crazy ideas, infeasible ideas,
possible. Crazy ideas, infeasible ideas, just get them all out there. Idea
just get them all out there. Idea generation is about divergence. As
generation is about divergence. As tempting as it can be, don't critique
tempting as it can be, don't critique any ideas until they are all out there.
any ideas until they are all out there. Once you have done that, it is time to
Once you have done that, it is time to filter the ideas down. Put your business
filter the ideas down. Put your business hat on and throw out bad ideas.
hat on and throw out bad ideas. Remember, the only way to get down to a
Remember, the only way to get down to a great idea is to start with divergence
great idea is to start with divergence first and then convergence.
first and then convergence. First, think outside the box. Then,
First, think outside the box. Then, associate your thoughts with things you
associate your thoughts with things you have observed or experienced.
have observed or experienced. This is the essence of creativity.
This is the essence of creativity. Always be filling your card catalog with
Always be filling your card catalog with experiences and knowledge. Then, take
experiences and knowledge. Then, take those cards and put them together in
those cards and put them together in different combinations.
different combinations. Teams are critical to expanding your
Teams are critical to expanding your breadth. Include people who are
breadth. Include people who are different than you. This helps expand
different than you. This helps expand your idea pool dramatically. You can use
your idea pool dramatically. You can use these associative thinking methods in a
these associative thinking methods in a team or individually, but try to
team or individually, but try to leverage teams as much as possible.
leverage teams as much as possible. You may have a great idea that solves a
You may have a great idea that solves a huge problem, but if people don't care,
huge problem, but if people don't care, they won't buy it. It could even be a
they won't buy it. It could even be a life-saving device.
life-saving device. Pain is personal. Personal pain causes
Pain is personal. Personal pain causes people to pay.
people to pay. When solving any kind of problem, dive
When solving any kind of problem, dive into the complexity. When you are
into the complexity. When you are providing the end solution, make it
providing the end solution, make it incredibly simple. Elegant solutions
incredibly simple. Elegant solutions beat out non-elegant solutions to Forex.
beat out non-elegant solutions to Forex. Systematic inventive thinking is a
Systematic inventive thinking is a technique to take existing products and
technique to take existing products and create new innovations from them by
create new innovations from them by applying five different thinking models.
applying five different thinking models. For example, take your product and
For example, take your product and subtract a feature or take a feature and
subtract a feature or take a feature and give it a different purpose etc.
give it a different purpose etc. Subtract,
Subtract, multiply same objects, use different
multiply same objects, use different job.
job. Divide
Divide unify tasks break symmetry.
unify tasks break symmetry. Creativity is an evolutionary process.
Creativity is an evolutionary process. Starting with the vision, ideas are
Starting with the vision, ideas are tested, tweaked, and tested again.
tested, tweaked, and tested again. Through the process, new knowledge is
Through the process, new knowledge is gained and the product is refined to a
gained and the product is refined to a point where it finally meets the vision
point where it finally meets the vision and can be launched for real. A key in
and can be launched for real. A key in the process is to be nimble and
the process is to be nimble and flexible, adapting to new information
flexible, adapting to new information and data.
and data. Guest speaker Michael Lee.
Guest speaker Michael Lee. Spend time on soft costs. Most companies
Spend time on soft costs. Most companies invest very little in soft costs which
invest very little in soft costs which can be detrimental once it is launched.
can be detrimental once it is launched. People always want to jump to solutions.
People always want to jump to solutions. Stop. Bring people back to abstraction.
Stop. Bring people back to abstraction. What is the story? Why does the product
What is the story? Why does the product exist? Then create the experience in
exist? Then create the experience in your mind's eye.
your mind's eye. Of course, before you create it, you
Of course, before you create it, you need to look at the numbers and do a
need to look at the numbers and do a feasibility study. If it makes business
feasibility study. If it makes business sense, then you start working on the
sense, then you start working on the solution.
solution. You can't talk about innovation without
You can't talk about innovation without talking about Harvard business professor
talking about Harvard business professor Clayton Christensen. The guy is a
Clayton Christensen. The guy is a genius. He has a masterful theory called
genius. He has a masterful theory called the job to be done.
the job to be done. A fast food chain wanted to sell more
A fast food chain wanted to sell more milkshakes.
milkshakes. They did market research and spent a lot
They did market research and spent a lot of money to learn everything about their
of money to learn everything about their target customer.
target customer. They did surveys and focus groups. Then
They did surveys and focus groups. Then they enhanced their milkshakes by
they enhanced their milkshakes by refining the recipe, brought in their
refining the recipe, brought in their customers and they liked it.
customers and they liked it. No increase in sales.
No increase in sales. 45%
45% of milkshakes were purchased in the
of milkshakes were purchased in the morning.
morning. Given this insight, they started
Given this insight, they started stopping drivers as they were going
stopping drivers as they were going through the drive-thru and asking why
through the drive-thru and asking why they were buying the milkshake.
they were buying the milkshake. They learned that the customers wanted
They learned that the customers wanted something that would occupy them while
something that would occupy them while they commuted to work and kept them full
they commuted to work and kept them full until lunch. That was the job to be done
until lunch. That was the job to be done that they hired the milkshake for.
that they hired the milkshake for. This course is all about finding a good
This course is all about finding a good idea, sharpening the competitive angle
idea, sharpening the competitive angle and making it profitable. This simple
and making it profitable. This simple model took 20 plus years to perfect.
model took 20 plus years to perfect. How to create a good idea?
How to create a good idea? Reinvent
Reinvent product experience. the world around
product experience. the world around you.
you. One, solve everyday pain. Look around.
One, solve everyday pain. Look around. What are people struggling with?
What are people struggling with? Two, ride the wave of interest. What is
Two, ride the wave of interest. What is popular right now? Leverage it.
popular right now? Leverage it. Three, stretch or entertain to the
Three, stretch or entertain to the extreme. Take your idea and go to the
extreme. Take your idea and go to the extreme. For some reason, things taken
extreme. For some reason, things taken to the extreme are money makers.
to the extreme are money makers. Four, build on a core product. Look at
Four, build on a core product. Look at the most common products, find their
the most common products, find their core, and make them the best or most
core, and make them the best or most fun. Double down.
fun. Double down. Five. Cool. Hunting. What's most
Five. Cool. Hunting. What's most profitable in other countries that we
profitable in other countries that we aren't doing here? Find it and bring it
aren't doing here? Find it and bring it over.
over. How to know if you have a good idea.
How to know if you have a good idea. Test personal connection
Test personal connection factor.
factor. Show people the product.
Show people the product. Conduct focus groups.
Conduct focus groups. On a scale of 0 to 10, what would you
On a scale of 0 to 10, what would you rate this?
rate this? Steps to conduct focus groups.
Steps to conduct focus groups. Screening question. Do you use
Screening question. Do you use do the six thinking hats?
do the six thinking hats? Why?
Why? State the facts for the focus group.
State the facts for the focus group. This isn't the time for critiques. Just
This isn't the time for critiques. Just Q
Q and A.
and A. Red. Ask on a scale of 1 to 10 whether
Red. Ask on a scale of 1 to 10 whether or not they would purchase it.
or not they would purchase it. Yellow perceived benefits or positive
Yellow perceived benefits or positive support for the product.
support for the product. Black perceived shortcomings of the
Black perceived shortcomings of the product. This is the time for them to be
product. This is the time for them to be negative.
negative. Green ideas for improving the product.
Green ideas for improving the product. Blue summarize the process and learnings
Blue summarize the process and learnings from the thinking hat exercise.
from the thinking hat exercise. Questions to ask for new products.
Questions to ask for new products. Each of these questions is ordered by
Each of these questions is ordered by Mojo. What about your product will get
Mojo. What about your product will get people talking.
people talking. The competitive angle.
The competitive angle. The competitive angle has three parts. A
The competitive angle has three parts. A helps someone get over a hurdle. B is
helps someone get over a hurdle. B is distinct. Creates a positive personal
distinct. Creates a positive personal connection. Once you have a good idea,
connection. Once you have a good idea, it is time to sharpen the competitive
it is time to sharpen the competitive angle to make it profitable.
angle to make it profitable. Sometimes your angle will look
Sometimes your angle will look unbalanced like this. Work to balance it
unbalanced like this. Work to balance it out by sharpening the dull points.
out by sharpening the dull points. Remarkable bottomup tactic.
Remarkable bottomup tactic. Double down your cheap. We are twice as
Double down your cheap. We are twice as cheap. Better faster. Cheaper. Go double
cheap. Better faster. Cheaper. Go double better faster. Cheaper.
better faster. Cheaper. Do the opposite. Milk. Rightward. Arrow.
Do the opposite. Milk. Rightward. Arrow. Almond. Silk. Not milk.
Almond. Silk. Not milk. Feature an oddity. Squatty potty.
Feature an oddity. Squatty potty. The cow patty clock is a great example
The cow patty clock is a great example of a product that featured an oddity and
of a product that featured an oddity and doubled down. The only limitation they
doubled down. The only limitation they had was in creating the supply. Cows
had was in creating the supply. Cows only poop so much.
only poop so much. The jetpack water ride started as a
The jetpack water ride started as a product to clean the sides of large
product to clean the sides of large ships. Sales were level. They took that
ships. Sales were level. They took that idea, sharpened the angle by making it
idea, sharpened the angle by making it unique and targeted for a different
unique and targeted for a different situation.
situation. sales skyrocketed.
sales skyrocketed. Positive personal connections are
Positive personal connections are critical. Be careful of creating a
critical. Be careful of creating a product that elicits a negative personal
product that elicits a negative personal connection.
connection. A lot of companies focus on selling
A lot of companies focus on selling features rather than taking a much more
features rather than taking a much more effective approach selling benefits.
effective approach selling benefits. Show potential customers the idea and
Show potential customers the idea and appeal to the emotions, creating a
appeal to the emotions, creating a positive personal connection.
positive personal connection. Get creative on different usage
Get creative on different usage situations for your product. An apron
situations for your product. An apron company thought their product was for
company thought their product was for one situation when they discovered that
one situation when they discovered that their audience really wanted to feel
their audience really wanted to feel cute. The process looks something like
cute. The process looks something like this.
this. The real situation.
The real situation. Use focus groups to discover the real
Use focus groups to discover the real situation.
situation. The reality is most customers are using
The reality is most customers are using your product for reasons other than you
your product for reasons other than you originally thought. Doing focus groups
originally thought. Doing focus groups will help you flesh out how they are
will help you flesh out how they are using it which will help you dominate
using it which will help you dominate that usage situation.
that usage situation. Discover the
Discover the first and it will determine the feature
first and it will determine the feature set.
set. Take your product idea and create a
Take your product idea and create a table with target customers on the left
table with target customers on the left and at least 10 different usage
and at least 10 different usage situations along the top. Find the most
situations along the top. Find the most profitable customer with the most
profitable customer with the most powerful situation and focus there.
powerful situation and focus there. Although it is tempting to focus on all
Although it is tempting to focus on all of them, you need to focus on only one
of them, you need to focus on only one usage situation.
usage situation. Situation statement.
Situation statement. Creating a situation statement will help
Creating a situation statement will help focus your efforts.
focus your efforts. Wants to but can't because of gets over
Wants to but can't because of gets over the buy. If a quarterback is about to
the buy. If a quarterback is about to get sacked, should he throw the ball
get sacked, should he throw the ball away or just take the sack? The owner
away or just take the sack? The owner wants him to throw it away so that the
wants him to throw it away so that the QB doesn't risk an injury, but the QB
QB doesn't risk an injury, but the QB wants to take the sack so he has better
wants to take the sack so he has better passing completion stats.
passing completion stats. How do you reconcile the two? That is
How do you reconcile the two? That is what this chapter is all about.
what this chapter is all about. Why not incentivize based on wins? Can't
Why not incentivize based on wins? Can't control it. If I can't control it, why
control it. If I can't control it, why bother?
bother? Agency theory one.
Agency theory one. The agency theory states that the agent
The agency theory states that the agent will want to maximize utility for one's
will want to maximize utility for one's own benefit. Goal in congruence is when
own benefit. Goal in congruence is when the principal and the agents goals don't
the principal and the agents goals don't align.
align. Goal in congruence.
Goal in congruence. The reality is that people want the most
The reality is that people want the most amount of money while doing the least
amount of money while doing the least amount of work. This course is about
amount of work. This course is about creating structure and incentives that
creating structure and incentives that align the business objectives with the
align the business objectives with the motivations of employees.
motivations of employees. Management control systems exist for
Management control systems exist for agency problems.
agency problems. Organizational architecture.
Organizational architecture. You need all
You need all three.
three. And they all are equal in importance.
And they all are equal in importance. Performance measures.
Performance measures. You don't just focus on one measure.
You don't just focus on one measure. Balanced scorecard.
Balanced scorecard. Objectives are actionable that are
Objectives are actionable that are measurable.
measurable. Balance
Balance scorecard. Scorecard three.
scorecard. Scorecard three. Example,
Example, what gets measured gets done.
what gets measured gets done. Just watch out for surrogation.
Just watch out for surrogation. This is when the measure itself becomes
This is when the measure itself becomes the end. For example, measuring managers
the end. For example, measuring managers on whether or not they have one colon 1S
on whether or not they have one colon 1S with their team. The purpose is to help
with their team. The purpose is to help their team members, but the quality of
their team members, but the quality of those meetings could go downhill if they
those meetings could go downhill if they feel they just need to check the box.
feel they just need to check the box. Global management is about taking your
Global management is about taking your product or business out to the world
product or business out to the world while being aware of the local needs and
while being aware of the local needs and cultures in order to increase your
cultures in order to increase your chances of success.
chances of success. It's not just geography that causes
It's not just geography that causes distance.
distance. Companies have made many botched
Companies have made many botched attempts at opening new markets around
attempts at opening new markets around the world only to discover that their
the world only to discover that their product doesn't truly meet the market's
product doesn't truly meet the market's needs or wants.
needs or wants. Although tempting to jump into markets
Although tempting to jump into markets like China, doing the proper leg work to
like China, doing the proper leg work to understand the cultural differences in
understand the cultural differences in attitudes, behaviors, expectations, and
attitudes, behaviors, expectations, and values will go a long way.
values will go a long way. Culture. Culture.
Culture. Culture. C.
C. A.
A. Cage
Cage distance framework.
distance framework. Distance is created by more than just
Distance is created by more than just geography. When looking at your
geography. When looking at your international strategy, the cage
international strategy, the cage framework will help you navigate
framework will help you navigate potential pitfalls.
potential pitfalls. Cultural differences.
Cultural differences. What are the different languages,
What are the different languages, ethnicities,
ethnicities, religions,
religions, values, norms,
values, norms, administrative differences?
administrative differences? G.
G. E.
E. What is the political landscape? What is
What is the political landscape? What is the legal system? Currency.
the legal system? Currency. Geographic differences.
Geographic differences. What is the physical distance between
What is the physical distance between countries?
countries? Time zones, climates,
Time zones, climates, economic differences.
economic differences. What are the differences between the
What are the differences between the rich and poor? What is the
rich and poor? What is the infrastructure
infrastructure natural/inancial
natural/inancial resources?
resources? Now, you can easily put the answers to
Now, you can easily put the answers to these questions in a table for reference
these questions in a table for reference when planning and sharing your strategy.
when planning and sharing your strategy. Accounting for these four areas will
Accounting for these four areas will save you much trouble down the road as
save you much trouble down the road as you look to expand your business.
you look to expand your business. Wow, that was a lot of stuff. Let's see
Wow, that was a lot of stuff. Let's see how it all fits together for a new
how it all fits together for a new business venture. Hopefully, this
business venture. Hopefully, this reference guide can help you along your
reference guide can help you along your own business journey.
own business journey. Start.
Start. Find out who to serve. P 46 to 48.
Find out who to serve. P 46 to 48. Come up with an idea. P 25 30 86 97
Come up with an idea. P 25 30 86 97 142 to 151
142 to 151 154 to 156
154 to 156 experiment P 24 30-31
experiment P 24 30-31 validate your idea P25 51 997
validate your idea P25 51 997 to 159
to 159 plan P8 26 28 to 29 89 34 to 36
plan P8 26 28 to 29 89 34 to 36 map your strategy P78 to 82
map your strategy P78 to 82 decision making P 110 to 112
decision making P 110 to 112 branding P 52 to 53
branding P 52 to 53 business entity setup P 104 to 105
business entity setup P 104 to 105 launch
launch marketing P 46 to 49
marketing P 46 to 49 163 Three,
163 Three, measure and diagnose. P12 to 17.
measure and diagnose. P12 to 17. Refine your product and marketing. P49
Refine your product and marketing. P49 to 51,
to 51, 154,
154, 160 to 162,
160 to 162, 164 to 167.
164 to 167. Problem solving P 120 to 122.
Problem solving P 120 to 122. Leadership P2 to5
Leadership P2 to5 136 to 139.
136 to 139. Ethics P90 to 93.
Ethics P90 to 93. Building teams P6 to9 62 to 63.
Building teams P6 to9 62 to 63. Performance improvement P 170 to 175.
Performance improvement P 170 to 175. Employee retention P64 to 67.
Employee retention P64 to 67. Managing change. P24
Managing change. P24 to 131.
to 131. Grow and invest in the business. P25 51
Grow and invest in the business. P25 51 997
997 to 159.
to 159. Global expansion. P78
Global expansion. P78 to 181.
to 181. Operations P56 to 59.
Operations P56 to 59. Negotiations. P70 to 75.
Negotiations. P70 to 75. Closing thoughts.
Closing thoughts. Feeling smarter. Good. You've gained
Feeling smarter. Good. You've gained insights. You've made connections.
insights. You've made connections. You've learned new things. Now it's time
You've learned new things. Now it's time to apply them. 70% of learning is
to apply them. 70% of learning is experiential. And now it is up to you.
experiential. And now it is up to you. Try the concepts and frameworks you
Try the concepts and frameworks you learned.
learned. What worked? What didn't? What could be
What worked? What didn't? What could be improved? Learning never stops.
improved? Learning never stops. Socrates lived over 2,000 years ago and
Socrates lived over 2,000 years ago and he knew what he was talking about. Dig
he knew what he was talking about. Dig deep, ask why, challenge, ask questions,
deep, ask why, challenge, ask questions, and then do.
and then do. You will understand the whole picture
You will understand the whole picture rather than fragments. You are an artist
rather than fragments. You are an artist with many canvases ready to be filled by
with many canvases ready to be filled by your intellectual curiosity and
your intellectual curiosity and discovery. If you can sketch notes some
discovery. If you can sketch notes some of them along the way, bonus points.
of them along the way, bonus points. If you take and apply just one idea in
If you take and apply just one idea in this book, try it out, learn and grow
this book, try it out, learn and grow all the hours spent on this book will be
all the hours spent on this book will be worth it.
worth it. Thank you for buying and reading this
Thank you for buying and reading this book. I look forward to hearing your
book. I look forward to hearing your experiences and insights as you apply
experiences and insights as you apply these concepts.
these concepts. Feel free to reach me on Twitter at
Feel free to reach me on Twitter at jasparon.
jasparon. Kind regards, Jason Baron.
Kind regards, Jason Baron. Chapter 1.
Chapter 1. One, Olrich, Dave and Norm Smallwood,
One, Olrich, Dave and Norm Smallwood, Building a Leadership Brand, Harvard
Building a Leadership Brand, Harvard Business Review. Two, Olrich, Dave, and
Business Review. Two, Olrich, Dave, and Norm Smallwood.
Norm Smallwood. Five steps to building your personal
Five steps to building your personal leadership brand. Harvard Business
leadership brand. Harvard Business Review.
Review. Three, Gman, Carol K. 7 seconds to make
Three, Gman, Carol K. 7 seconds to make a first impression.
a first impression. Forbes
Forbes for Pink, Daniel H. Drive. The
for Pink, Daniel H. Drive. The surprising truth about what motivates
surprising truth about what motivates us. New York, Riverhead Books, 2009.
us. New York, Riverhead Books, 2009. Five. Linquist. Rusty. Finding your own
Five. Linquist. Rusty. Finding your own personal sweet spot. Life engineering
personal sweet spot. Life engineering blog. https/life
blog. https/life [Music]
[Music] engineering/finding your own personal
engineering/finding your own personal sweet spot/
sweet spot/ six. Professor Sumantra Goshal
six. Professor Sumantra Goshal speech at World Economic Forum in Davos,
speech at World Economic Forum in Davos, Switzerland.
Switzerland. V equals UG R IE.
V equals UG R IE. Seven Schwarz, Tony and Catherine
Seven Schwarz, Tony and Catherine McCarthy. Manage your energy, not your
McCarthy. Manage your energy, not your time. Harvard Business Review. Eight.
time. Harvard Business Review. Eight. Dyer, William G. W. Gibb Dyier, Jr. and
Dyer, William G. W. Gibb Dyier, Jr. and Jeffrey H. Dyer. Team building proven
Jeffrey H. Dyer. Team building proven strategies for improving team
strategies for improving team performance.
performance. San Francisco Jossi base 2007
San Francisco Jossi base 2007 chapter 3
chapter 3 one idio how to prototype a new business
one idio how to prototype a new business blog entry
blog entry two manin Eric can you spot the shore
two manin Eric can you spot the shore winner Harvard business review three
winner Harvard business review three lovey Steven the perfect thing how the
lovey Steven the perfect thing how the iPod shuffles commerce culture and
iPod shuffles commerce culture and coolness
coolness New B Simon and Schuster 2007
New B Simon and Schuster 2007 four
four chapter 4
chapter 4 one Monty Swain the management process
one Monty Swain the management process in management accounting and cost
in management accounting and cost concepts chapter 15 in W Steve Alrech at
concepts chapter 15 in W Steve Alrech at all accounting concepts and applications
all accounting concepts and applications Boston Sengage learning 2007
Boston Sengage learning 2007 chapter ics
chapter ics one Reynolds Thomas J and Jonathan
one Reynolds Thomas J and Jonathan Gutman lattering theory method analysis
Gutman lattering theory method analysis and interpretation
and interpretation journal of advertising research to sneak
journal of advertising research to sneak Simon how great leaders inspire action
Simon how great leaders inspire action TED talk given in Puget Sound Washington
TED talk given in Puget Sound Washington September 2009
September 2009 chapter 7
chapter 7 one Gray Annie and James Leonard
one Gray Annie and James Leonard Process Fundamentals
Process Fundamentals Harvard Business School background note
Harvard Business School background note 696
696 023
023 September 1995
September 1995 Chapter 8
Chapter 8 one Hackman J. Richard and Greg R. Oldm
one Hackman J. Richard and Greg R. Oldm development of the job diagnostic survey
development of the job diagnostic survey journal of applied psychology 60
journal of applied psychology 60 159 to 170 to hersburg Frederick
159 to 170 to hersburg Frederick the motivation hygiene concept and
the motivation hygiene concept and problems of manpower
problems of manpower personnel administrator 27 3-7
personnel administrator 27 3-7 3 dyier William G W Gibb Dyier Jr. and
3 dyier William G W Gibb Dyier Jr. and Jeffrey H. Dyer. Team building proven
Jeffrey H. Dyer. Team building proven strategies for improving team
strategies for improving team performance.
performance. San Francisco, Jossi Base, 2007.
San Francisco, Jossi Base, 2007. [Music]
[Music] Chapter 9.
Chapter 9. One for Scythe, Dr. Group Dynamics.
One for Scythe, Dr. Group Dynamics. Belmont, Ma, Wadssworth, Sengage
Belmont, Ma, Wadssworth, Sengage Learning 2010,
Learning 2010, 2006.
2006. Two Fisher, Roger, Bruce Patton, and
Two Fisher, Roger, Bruce Patton, and William Yuri. Getting to Yes.
William Yuri. Getting to Yes. Negotiating agreement without giving in.
Negotiating agreement without giving in. In RevD, New York, Penguin Books, 2011.
In RevD, New York, Penguin Books, 2011. Three. Diamond Stewart. Getting more.
Three. Diamond Stewart. Getting more. How you can negotiate to succeed in work
How you can negotiate to succeed in work and life. New York, Crown Business,
and life. New York, Crown Business, 2012.
2012. Chapter 10.
Chapter 10. One. Porter. Michael, how competitive
One. Porter. Michael, how competitive forces shape strategy? Harvard Business
forces shape strategy? Harvard Business Review. Two, Porter. Michael, what is
Review. Two, Porter. Michael, what is strategy? Harvard Business Review.
strategy? Harvard Business Review. Three, Barney, JB, and WS Hesterly.
Three, Barney, JB, and WS Hesterly. VRIO framework in strategic management
VRIO framework in strategic management and competitive advantage. Upper Saddle
and competitive advantage. Upper Saddle River, New Jersey, Pearson, 2010.
River, New Jersey, Pearson, 2010. PP68 to 86
PP68 to 86 for Kim WC and Argorn
for Kim WC and Argorn Blue Ocean Strategy. How to create
Blue Ocean Strategy. How to create uncontested market space and make the
uncontested market space and make the competition irrelevant.
competition irrelevant. Boston, Harvard Business Review Press,
Boston, Harvard Business Review Press, 2005,
2005, Chapter 12.
Chapter 12. One Ducker, Peter F. Innovation and
One Ducker, Peter F. Innovation and entrepreneurship
entrepreneurship New York Harper Business 2006
New York Harper Business 2006 Chapter 13
Chapter 13 one Hammond John S. Ralph Elini and
one Hammond John S. Ralph Elini and Howard Rafa. Smart Choices: A Practical
Howard Rafa. Smart Choices: A Practical Guide to Making Better Decisions.
Guide to Making Better Decisions. Boston: Harvard Business Review Press
Boston: Harvard Business Review Press 2015.
2015. Two Conoran Daniel. Thinking fast and
Two Conoran Daniel. Thinking fast and slow.
slow. New York Ferrar Strauss and Jeru 2013.
New York Ferrar Strauss and Jeru 2013. Three. Tever Sky Amos Conaman Daniel.
Three. Tever Sky Amos Conaman Daniel. Availability, a heristic for judging
Availability, a heristic for judging frequency and probability.
frequency and probability. Cognitive psychology 5 27 to 232
Cognitive psychology 5 27 to 232 for connevers
for connevers sky Amos.
sky Amos. Subjective probability a judgment of
Subjective probability a judgment of representativeness.
representativeness. Cognitive psychology 3 430 to 454.
Cognitive psychology 3 430 to 454. Five. Connean Daniel Tversky Amos.
Five. Connean Daniel Tversky Amos. Prospect theory an analysis of decision
Prospect theory an analysis of decision under risk. Econometric 47 263
6 ters sky a conaman d judgment under uncertainty uristics and biases.
uncertainty uristics and biases. Science 185 1124 to 1131.
Science 185 1124 to 1131. Seven Likensstein Sarah Fishhoff Bareric
Seven Likensstein Sarah Fishhoff Bareric Phillips Lawrence Decalibration of
Phillips Lawrence Decalibration of Probabilities The State-of-the-art to
Probabilities The State-of-the-art to 1980
1980 in Conaman Daniel Slavic Paul Terskai
in Conaman Daniel Slavic Paul Terskai Amos Judgment under uncertainty
Amos Judgment under uncertainty heruristics and biases
heruristics and biases Cambridge UK Cambridge University Press
Cambridge UK Cambridge University Press 1982 pp 306 to
1982 pp 306 to 134 8 Gunda Z the case for motivated
134 8 Gunda Z the case for motivated reasoning Psychological Bulletin 108 480
reasoning Psychological Bulletin 108 480 to 498
to 498 chapter 14
chapter 14 one Duran GT there's a SMR way to write
one Duran GT there's a SMR way to write management's goals and objectives
management's goals and objectives management review AMA forum 70 35 to 36
management review AMA forum 70 35 to 36 to Luan Kurd
to Luan Kurd Frontiers in group dynamics, concept,
Frontiers in group dynamics, concept, method and reality in social science,
method and reality in social science, social equilibria and social change.
social equilibria and social change. Human relations 1 5 to 41. Three bridges
Human relations 1 5 to 41. Three bridges William. Managing transitions
William. Managing transitions Boston Nicholas Breley Publishing 2009.
Boston Nicholas Breley Publishing 2009. Chapter 16.
Chapter 16. One Awward Land George T. and Beth
One Awward Land George T. and Beth German. Breakpoint and beyond. Mastering
German. Breakpoint and beyond. Mastering the future today. Champagne IIL. Harper
the future today. Champagne IIL. Harper Business 1992.
Business 1992. Two Gray Dave Sunni Brown and James
Two Gray Dave Sunni Brown and James Machino.
Machino. Gamestorming.
Gamestorming. Sebastapole CA or Media 2010.
Sebastapole CA or Media 2010. Three. The hunt is on for the
Three. The hunt is on for the Renaissance man of computing in the
Renaissance man of computing in the independent September 17th, 1991.
independent September 17th, 1991. Four, created by Janedai Filovski, Jacob
Four, created by Janedai Filovski, Jacob Goldenberg and Ronnie Horowitz.
Goldenberg and Ronnie Horowitz. Five, Michael Lee. Six, Clayton
Five, Michael Lee. Six, Clayton Christensen at all. Know your customers
Christensen at all. Know your customers jobs to be done. Harvard Business Review
jobs to be done. Harvard Business Review Chapter 17.
Chapter 17. One de Bono, Edward. Six, thinking hats.
One de Bono, Edward. Six, thinking hats. An essential approach to business
An essential approach to business management. Boston, Little Brown and
management. Boston, Little Brown and Company, 1985.
Company, 1985. [Music]
[Music] Chapter 18.
Chapter 18. One. Eisenhart K. Agency Theory and
One. Eisenhart K. Agency Theory and Assessment and Review. Academy of
Assessment and Review. Academy of Management Review 14 57 to 74. Two Gupta
Management Review 14 57 to 74. Two Gupta Mahendra R. Antonio Dila and Richard J.
Mahendra R. Antonio Dila and Richard J. Palmer
Palmer three. Kaplan, Robert S. Norton, DP. The
three. Kaplan, Robert S. Norton, DP. The balanced scorecard, translating strategy
balanced scorecard, translating strategy into action. Boston, Harvard Business
into action. Boston, Harvard Business Review Press, 1996.
Review Press, 1996. Chapter 191.
Chapter 191. Framework created by Pankachki Mawad.
Framework created by Pankachki Mawad. Acknowledgements.
Acknowledgements. I want to give a special thanks to my
I want to give a special thanks to my amazing, supportive, patient, strong,
amazing, supportive, patient, strong, beautiful wife, Jackie.
beautiful wife, Jackie. She always encouraged me and never
She always encouraged me and never complained once through my entire MBA
complained once through my entire MBA program, all the while raising our five
program, all the while raising our five children.
children. I also want to thank the incredible
I also want to thank the incredible classmates I learned so much from and
classmates I learned so much from and who will be friends for life.
who will be friends for life. A huge thank you to all the top-notch
A huge thank you to all the top-notch professors who made my MBA experience as
professors who made my MBA experience as challenging and rewarding as it was.
challenging and rewarding as it was. Curtis Ellie Baron and Michael Thompson,
Curtis Ellie Baron and Michael Thompson, Jim Sty, Nile Hatch,
Jim Sty, Nile Hatch, Monty Swain, Colby Wright, Glenn
Monty Swain, Colby Wright, Glenn Christensen, and Michael Swenson, Daniel
Christensen, and Michael Swenson, Daniel Snow and Cindy Wallen, John Bingham, and
Snow and Cindy Wallen, John Bingham, and Peter Madson, Bruce Money,
Peter Madson, Bruce Money, Mark Hansen, Brad Agel, Jim Brow, Bill
Mark Hansen, Brad Agel, Jim Brow, Bill Taylor, and Doug Prait, Paul Godfrey,
Taylor, and Doug Prait, Paul Godfrey, Gary Rhodess, and David Whitlark.
Gary Rhodess, and David Whitlark. And finally, Steve Smith and Bill
And finally, Steve Smith and Bill Taylor.
Taylor. I want to thank my mother Faith who
I want to thank my mother Faith who always taught me to present my best work
always taught me to present my best work no matter how small a project. My
no matter how small a project. My awesome brother Matt for his feedback
awesome brother Matt for his feedback and support. My agent David Fugate and
and support. My agent David Fugate and the incredible team at H Hotton Mifflin
the incredible team at H Hotton Mifflin Harkort.
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