Why Your Next Five Moves?

I was interested in finding a structured way to define a strategy and came across this book. I had never heard of the author (Patrick Bet-David) and I ordered the book online, so I did not check the content. However, the reviews were quite good so I decided to give it a try.

Move 1: Master Knowing Yourself Chapter 1: Who Do You Want To Be?

• The first priority is to understand what makes you tick and who you want to be.
  • The purpose of this exercise is to:
    • identify what is most important to you and
    • create a strategy that matches your level of commitment and vision.
  • Take the time to be clear about who you want to be, what your story is, so that when the going gets tough, you are prepared. Because in business, it always gets tough.
  • The answer will determine the level of urgency.
• Use your haters and doubters to drive you.
  • Use the moment when you feel powerless, angry or sad to bring out your deepest drive.
  • Rejection, shame can be an extremely good motivator.
• You need to discover which role suits you best: inventor, entrepreneur (high risk, high reward), intrapreneur (COO, CIO, CTO, CFO, CMO), support team, solopreneur, influencer, sales, CEO/founder.
• The busier you are, the more organised you need to be.
  • You can have a family life and a business if you want to.
  • You will find a way if it is important to you.
• Embody who you want to be by living your future truth – live in the present as if your future truth is already a reality.
  • Once you have a vision, create a picture in your mind of what the business should look like
  • Then ask yourself how a business that looks like that would have to act, and make it happen.
  • People want to follow someone who is driven by their future truth.
  • As long as the person speaking has 100 per cent conviction, he or she will inspire others.
  • The best leaders have the ability not only to believe in future truths, but also to inspire others to believe in and execute their vision.
  • Aim to be heroic and ask yourself how your heroes would act in different situations.

Move 1: Master Knowing Yourself Chapter 2: Study the Most Important Product: You

• Knowing who you want to be is a process that requires effort.
• The most important person to study is the only person you’ll have to live with for the rest of your life: You.
  • Decide what your best life looks like and act on that vision. You won’t be jealous anymore.
  • There may come a day when you want to give up more in order to experience more. Your goals will evolve over time.
• If you work hard and creatively, you can have almost anything you want, but not everything you want.
  • Maturity involves rejecting good alternatives in order to pursue even better ones.
• If you say you don’t want something but don’t mean it, envy will eat you alive.
  • It tells you that you really want it but are not prepared to work for it.
  • If you are honest enough to know who you are and do what it takes to live the life you want, you will have peace of mind.
• You know you are living the best life when you are happy for the success of others, including those who have things you don’t have.
  • Envy is an indicator that you’re either lying to yourself about what you want, or that you lack the discipline to achieve it.
• The most dangerous unhappy people are both extremely ambitious and extremely lazy.
  • These people think big but are unwilling to put in the work, which leads to cheating and looking for shortcuts.
• If someone is winning at a higher level than you, either lower your expectations to match their work ethic, or raise your work ethic to exceed expectations.
• There needs to be alignment between your vision, your effort and your behaviour:
  • Your vision must be aligned with who you want to be.
  • Your choices must match your vision.
  • Your effort must match the magnitude of your vision.
  • Your behaviour must be consistent with your values and principles.
• The four areas that drive you:
  • Advancement
    • Next promotion
    • Completing a task
    • Meeting a deadline
    • Achieving a goal as a team
  • Individuality
    • Lifestyle
    • Recognition
    • Security
  • Madness
    • Opposition
    • Competition
    • Control
    • Power and fame
    • Proving others wrong
    • The need to avoid embarrassment
    • Wanting to be the best (breaking records)
  • Purpose
    • History
    • Helping others
    • Change Impact
    • Enlightenment/Self-actualisation
  • It’s normal to have more than one motivation and for your priorities to shift over time. Often a catalyst is needed to examine what motivates you. The following reasons may prompt you to examine your motivations:
    • Boredom
    • Declining results
    • A plateau or stagnation
    • Feeling that your talent is diminishing
  • Another way of thinking about drive is to ask „What is my why?“, which of course can change over time.There are 4 levels of why:
    • Level 1: Survival
      • Anyone who has a job to make money is focused on paying the bills. Some people stop there.
    • Level 2: Status
      • Some people may want a nice car or house. This is about keeping up with the Joneses.
      • Status is one level above survival. However, when most people reach this level, they slow down and settle down.
    • Level 3: Freedom
      • Some people want to be paid enough not to have to go to work every day.Or they want to be a digital nomad so they can surf in the summer and ski in the winter.
      • Freedom is selfish in a way. And it can feel empty once you’ve got it. But it gives you the luxury of focusing on other interests in your life that will give you a real sense of fulfilment.
    • Level 4: Purpose
      • To define your purpose, you need to answer the questions:
        • How do I want to make a difference in other people’s lives?
        • How do I want to be remembered?
      • It’s about finding out why you are on this earth.

Move 1: Master Knowing Yourself Chapter 3: Your Path to Creating Wealth: Intrapreneur or Entrepreneur?

• Choose the path that tilts the odds in your favour.
  • What determines whether you win in any game or business is not how good you are, but how good you are relative to your competitors.
  • That’s why it’s so important to know your own strengths and weaknesses, and to find a market where you have an inherent advantage.
• Most wealthy people accumulate wealth as owners, not as employees.
  • Wealth and success do not come to most people by climbing someone else’s ladder.
  • Working for a comfortable salary with no personal meaning to climb your way to middle management and security is not the way to wealth and success.
• The entrepreneur
  • Becoming an entrepreneur cannot just be about the money.
  • If money is your only motivation, you’ll become complacent and eventually stop.
  • The pain of owning a business is too great to tolerate just for the money.
  • Entrepreneurship has the greatest financial rewards, but it is also high risk.
• The intrapreneur
  • Intrapreneurs don’t act and think like ordinary employees, they act and think like owners.
  • They want recognition, autonomy, resources and ownership.
  • Five characteristics of a successful intrapreneur:
    • An intrapreneur thinks like an entrepreneur.
    • An intrapreneur works like an entrepreneur.
    • An intrapreneur has an entrepreneur’s sense of urgency.
    • An intrapreneur innovates like an entrepreneur.
    • An intrapreneur protects the brand and the money like an entrepreneur.
    • An intrapreneur respects authority; an entrepreneur defies authority.
  • Intrapreneurs find ways to improve themselves while improving the business. If you have no respect for the founder or current CEO, you are not in the right place to build a business within a business.
  • Google encourages intrapreneurship by giving employees 20 percent of their time to work on what they think will benefit Google the most.
    • Products created during this 20% time include Google News, Gmail and AdSense.
• It’s important to find your blue ocean – a game you can beat.
  • Focus on using your unique talent to find your niche in a business you want to pursue.
    • If you’re competing against people whose knowledge and skills are inferior to yours, you’re likely to win.
    • But you can reduce the risk by choosing the game where the odds are in your favour.
    • It’s foolish to think you can win at someone else’s game.

Move 2: Master the Ability to Reason Chapter 4: The Incredible Power of Processing Issues

• When difficult situations arise, the first step is to process what is happening.
  • Processing is the ability to make effective decisions based on access to the information at hand with the highest odds in your favour.
  • Processing is about applying rigorous mental analysis to every difficult decision, problem or opportunity you face.
  • Processing is about playing out strategies, seeing the hidden consequences and sequencing a series of moves to solve problems permanently.
• Great processors
  • Use the word ‚I‘ and see their role in whatever problem has arisen.
  • The questions they asked are:
    • How did I contribute to this?
    • What have I done to create this situation?
    • How can I improve so that I’m better equipped to deal with something like this in the future?
• Bad processors
  • play the victim, blaming others and external events rather than seeing how they contributed to the problem.
• Deep level processors
  • Look beneath the surface for causes
  • They think several moves ahead
  • Plan a sequence of moves to ensure the problem doesn’t happen again.
    • Long-term thinking versus short-term thinking is the difference between a grandmaster and an amateur.
• Processing steps when dealing with a difficult situation
  • Take a deep breath
  • Remember that these are the moments that separate the winners from the losers, and take responsibility.
  • Use expressions like
    • ‚My fault‘ or
    • ‚This mistake is on me‘ or
    • ‚We have no one to blame but ourselves‘.
  • Take responsibility for your part in what happened.
  • Be specific about what you did to cause the problem.
  • Channel your frustration into getting better and preventing future problems.
    • This is an effective way of dealing with problems and using them for learning and growth.
    • If you manage people, you need to transfer this skill to your managers and employees, and the best way to do this is by example.
• How to handle a crisis?
  • Negative events happen that are out of your control (like the pandemic that started in 2020).
  • When a crisis happens, the responsibility of a leader during this time increases.
  • Some leaders choose to remain silent in the absence of a plan.
    • In a crisis, this is the easy way out.
    • During a crisis, the importance of frequent and quality communication increases.
    • When everyone is freaking out, the leader has to be the calm in the storm.
    • How you respond will either shorten or lengthen the crisis. Your response to the crisis will make or break your company.
• How to make better decisions?
  • A proper analysis is required and one method is Investment Time Return.
  • The investment
    • How much will it cost or save us?
  • Time
    • How much time will it take or save us?
  • Return
    • Calculate the return on the money and time involved in the decision.
  • Before making any decisions, start with the ‚rule of three‘ by coming up with three different proposals for dealing with a problem, each with a different price tag.
  • For example:
  • A project costing $200,000 and taking one year to complete will reduce your risk of losing customers by 8%. You currently write 30,000 policies per year.
    • 30.000 policies X 8% X 200$ (contract value) = 480.000$ in savings.
    • The investment is worthwhile even if you consider a 4% risk and a 12% loan to finance the project ($224,000).
• Great processors rarely repeat mistakes.
  • If you’re in a hole, stop digging.
  • That’s when it’s important to have smart people around you who aren’t afraid to pull you out of the hole.
  • To get better, you have to reflect on your mistakes.
    • You learn more from the moves that led to defeat than from the one that led to victory.

Move 2: Master the Ability to Reason Chapter 5: How to Solve for X: A Methodology for Effective Decision Making

• One of the keys to success is having a system (a methodology) for making better decisions.
  • Solving for X means isolating your problem.
    • The template for solving for X can be found at https://www.patrickbetdavid.com/wp-content/uploads/2021/02/Solve-For-X_DMP_Template.png
• The best entrepreneurs look beyond the symptoms and get to the heart of a problem.
  • Once you’ve identified the real problems, start asking why, and keep asking until you reach a point where you can’t ask why anymore.
  • That’s the deepest why and the real cause of the problem.
    • Five questions to ask to identify the real problem.
      • Do I know what the real problem is or am I looking at a symptom?
      • Does the team have the data on the real problem?
      • Is the problem real or is it an assumption or someone else’s opinion?
      • Is there a tangible problem or is it just a bruised ego?
      • Am I thinking emotionally or logically?
• Two types of events will require you to make decisions
  • Offence – the opportunity to make money or advance growth, expansion, marketing, sales or your career
  • Defence – the opportunity to solve a problem, stop losing money or stop moving backwards in some way.
    • IT projects almost always take longer and cost more than expected.
    • However, the speed of delivery is increased and the long-term savings usually exceed the final cost.

Move 3: Master Building the Right Team Chapter 6: The Myth of the Solopreneur: How to Build Your Team

• Being successful means working well with other people, whether they are clients, customers, employees, investors, partners or external suppliers.
  • Before your business gets big, you will be recruiting people to work for you.
  • Focus on what you can offer potential employees. (Improve your own value in the process.)
    • Ask yourself: how I can make everyone else’s life better just by the benefits I offer them.
    • You know you are successful in life when others win because of their association with you.
• Even the greatest contributors need help because of:
  • Time constraints
  • Limited knowledge in certain areas
  • Other perspectives are needed to shape your own.
• In the Mafia family, there is a position specifically designed to provide wise counsel: the consigliere.
  • Warren Buffett had Charlie Munger, Steve Jobs had Steve Wozniak, Bill Gates had Paul Allen.
• Effective leaders surround themselves with people who challenge them.
  • They hire people who are much smarter than they are, especially in areas where they are weak.
• Insecure leaders surround themselves with ‚yes people‘.
• Trustworthy employees
  • You’ve got to do your due diligence, no matter how trustworthy people seem.
    • Spend time with them
    • Ask them questions
    • Ask others about them.
  • You can never be sure that people are trustworthy.
• Key employees
  • Give your key people equity, but let them earn it, don’t do it immediately.
  • The concept of ‚golden handcuffs‘ means that as long as people stay with your company, they’ll get gold.
  • Keep treating your people right or someone else will.
• To retain talent
  • People want to be properly rewarded for their efforts
  • High performers want to be part of the company’s internal success.
  • People want to be part of an organisation that’s making a difference.
  • People want to be recognised in front of their peers and know that there is an opportunity for them to grow.
  • People want to be measured against a clear set of expectations, without the goalposts constantly changing.
• Bad habits of employees
  • It is a mistake to think that people’s characters are fixed. If a new employee shows bad habits, you may think you have made a mistake. However, we may be able to train that person to be successful.
  • The key is to monitor performance and provide feedback and better communication:
    • For example: ‚Bob, you told me that you were someone who showed up on time. But you’ve been late three times in the last two weeks. We expect people to be on time. I just want you to know that if this continues, it’s going to be a problem for us.‘
  • One of the hardest things for entrepreneurs to do is to fire people.
    • You have to take some responsibility for an employee not working out.
    • You will approach this unpleasant task with a more empathetic attitude.
    • Don’t take it out on your employee, fire them gently.
    • If you’ve given them fair warning and they haven’t responded, don’t give them more chances to improve.
  • Six techniques for becoming an effective terminator:
    • Fire gently
    • Get straight to the point
    • Be firm but gentle
    • Acknowledge the other person’s feelings
    • Have a good exit strategy – have a face-to-face conversation before he or she leaves
    • Talk about the person’s strengths – how they can use their strengths to succeed in the next job

Move 3: Master Building the Right Team Chapter 7: Create a Principles-Based Culture

• Companies have similar elements in their culture to a religion.
  • True believers
  • Rituals
  • Special symbols, sayings and credos that are part of its culture
• Companies
  • follow ‚commandments‘
  • evangelise through social and other media.
  • believes passionately in its business strategy and cultural norms.
• If a team doesn’t have similar principles and values, it will never reach its full potential without shared values.
  • Aligning an entire organisation around a set of core beliefs that will endure with or without you is a very difficult task.
• Define the core values and then repeat them over and over again.
  • You have not repeated a message enough unless people are mocking you.
• Radical transparency
  • Never be afraid of the truth.
  • There is a concept called radical transparency, which is mentioned in Ray Dalio’s ‚Principles‘.
    • The idea is that people have an obligation to call each other out when they think someone is making a mistake or crossing a line.
    • There is a balance to be struck between respect and honesty, while maintaining a commitment to radical transparency.
• Authors‘ Business principles
  • Never compromise on nonnegotiables
  • Micro manage until there is trust.
  • What brought us here won’t take us to the next level
  • No one has 100% job security, including the founder or CEO. 
  • Create positive peer pressure by challenging one another. 
  • Beat your prior best.
  • Treat your company’s money like it’s your own.
  • Be radically open, minded but not easily persuaded.
  • Fight any temptation to lower expectations and standards.
  • Create an environment where our team is taken care of financially and professionally.
• You need to create a replacement plan
• The less your business depends on you, the more valuable it is.
• There is no exit opportunity if the business relies on you.
• Create a culture in which you spread good words about people
• This creates a positive peer pressure and increases friction that produces creative problem solving.
• A replacement plan is required
  • The less your business depends on you, the more valuable it is.
  • There is no exit opportunity if the business depends on you.
• Create a culture where you spread good words about people.
  • This creates positive peer pressure and increases the friction that leads to creative problem solving.

Move 3: Master Building the Right Team Chapter 8: Trust = Speed: The Power of Reliability

• The reason for building trusting relationships is to speed up every element of doing business.
• Understand what makes your team members tick.
  • Ask lots of questions to get to the bottom of who they are.
  • Understand what drives them, what their goals are, how they like to work
  • Follow the rule in relationships:
    • Do unto others as they would have you do unto them.
  • Understand their love language and how they want to be appreciated.
• Nine Love Languages in Business:
  • We need you
    • Giving people responsibility shows them you need them.
  • Recognition
    • Relying on cash rewards to motivate people makes them feel they need to be bribed to do their job.
    • It could be a plaque for their wall, an Olympic torch, Michael Jordan shoes, etc.
    • No matter how confident a person may seem, everyone needs recognition.
  • Praise
    • In private
      • Over a meal or in a casual conversation.
    • Public
      • Works best for people who like to be in the spotlight.
    • Behind their back
      • Praising people to others when we’re not present.
  • Clear direction
    • Things like ‚you can do it, go get it‘ are not effective.
    • The team needs you to say: ‚I need you to do this, this and this by this time. Can you do it?
    • No more than 3 things at a time or they will feel overwhelmed.
  • Vision
    • Most people are not visionaries.
    • The team needs to hear you talk about vision and the future.
    • Great leaders always sell the future, where the team is going and what is going to happen.
  • Dreams
    • People want to know that their dreams will come true.
    • If you want to speak the dream language constantly to those who want to hear it.
  • Involvement
    • Constantly ask people what they think and get feedback.
    • Constantly ask people what they think you should do next.
    • People want to be involved in what you are doing and they want to be heard.
  • Challenge
    • Great leaders challenge people all the time.
  • Listening
    • Listening is an essential skill.
    • Listen, listen, listen with genuine interest and take notes, give feedback.

Move 4: Master Strategy to Scale Chapter 9: Scaling for Exponential Growth

• There are two kinds of business growth:
  • Linear growth – steady but unspectacular gains
    • Meeting deadlines
    • Selling and retaining customers
    • Expanding your network of contacts
  • Exponential growth – quantum leaps
    • When entrepreneurs step out of the day-to-day running of the business to do something extraordinary
    • They have a vision and are able to make tough but smart decisions to realise that vision
    • They don’t want to grow incrementally, they want to conquer the world
• Linear growth: Operating Systems and Businesss Development
  • Operating Systems
    • Is about improving your systems, technology and processes to make them more efficient and effective.
    • This is the least exciting part of the business for most entrepreneurs.
    • A business fails for one of two reasons:
      • Either it grows too fast
        • If it grows too fast, it can be fatal if you do not have the operating systems in place to support your growth.
      • It doesn’t grow at all
  • Business Development, Relationships and Sales
    • This is about building relationships with new vendors and new partnerships, and improving your sales process.
    • This is about networking and attending events in your industry (relationship, relationship, relationship).
• Exponential growth: The next innovative campaign and Leadership development
  • The next innovative campaign
    • The right move can be a massive boost to your business.
    • You need to synthesise everything you know about:
      • Your customers‘ wants and needs
      • Your competitors‘ limitations
      • Your own strengths to create a campaign that will drive rapid venue growth.
        • For example, in February 2005, Amazon launched Amazon Prime, which is generating $11.9 billion in annual revenue.
• Leadership development
  • Achieving exponential growth is dependent on your ability to develop other people to become effective leaders.
    • Identify the next generation of leaders that you’ll want to groom for greater responsibility.
    • Make a list of your top 5 candidates and analyse them
      • Look at their strengths and weaknesses
      • Look at how they react in different situations
      • Look at their level of competition
      • Look at their ability to generate new ideas
    • Identify what they need to do over the next 6 months, 12 months and two years.
      • Challenge them to grow (water them as if they were plants).
  • Finding others who can build the business on their own, rather than just following marching orders, will lead to exponential growth.
• Your challenge
  • If you spend most of your time in the linear quadrants
    • You will not build much momentum.
  • If you spend all your time in the exponential quadrants
    • You run the risk of not being able to support your growth.
  • Analyse your strategy quadrant and ask yourself
    • Where you are doing well
    • Where you are not
  • It can be very satisfying to put together a strategy for your business.
    • It’s exciting when your business starts to grow and money starts to come in
• Improving employee performance by applying pressure to the point of desensitisation
  • The method used by Patrick Bet-David:
    • He sets high expectations to be as close to perfect as possible in everything.
    • The team knows they will win because they know the leader wants to win more than anyone else in the room, so you have no problem following him even if he picks on you for the smallest thing.
    • He applies pressure by asking questions and waiting for answers.
      • He challenges them by asking them to be clear about who they want to be and to describe their next steps in detail.
      • Once they have expressed what they want, he uses their answers to hold them accountable.
      • He does not shout and scream.
      • He does not impose his own goals on them.
      • If they fall short of their goals, he asks why and shuts up.
        • Getting them to reflect on themselves is much more powerful than telling them what to do.
    • He teaches them to be accountable for the high expectations they’ve set for themselves.
      • Most people don’t want that accountability.
      • Being held to the standard of being your best self is not for the faint of heart.
• A bigger bonus is the domino effect – when he puts pressure on one person, he puts pressure on another.
  • Instead of being a management practice, it becomes part of the culture.
  • He asks his staff to list their next five steps and email him if they are committed to being held accountable.
    • They set the bar for themselves and give him permission to hold them accountable.
• Outstanding performers (‚lions‘) are sometimes difficult to deal with – you have to learn how to deal with each one as they are likely to generate the most revenue but also the most headaches.

Move 4: Master Strategy to Scale Chapter 10: Make Momentum Your Friend – and Be Prepared for Chaos

• Momentum is the product of who you are and the speed at which you move forward.
  • Do not compromise on speed, execution or efficiency.
  • The Toyota Way
    • The catalyst for Toyota’s success was the decision to resolve any problem that arose on the assembly line in no more than 59 seconds.
    • Every worker on the line was given a bell, and as soon as a problem was identified, the worker would ring the bell and a supervisor would rush over to solve the problem.
    • The reason Toyota dominated its industry was not because it had better marketing or better prices, but because it could execute faster than its competitors.
• Four ways to accelerate:
  • Functioning Speed – this is the support system you provide to your team and the core of the business.
    • Examine your team and their skills.
    • Can you help them improve through training and other means so that they can take some time out of a function?
  • Processing speed – there are a number of functions or processes that make your organisation run.
    • How quickly do you get your product from A to Z?
  • Expansion speed – how quickly you enter new markets, make acquisitions and introduce new products.
  • Timing speed – if you time your moves correctly, you can beat competitors who have more resources than you.
    • Example: You know that the government is about to publish a major study on the effectiveness of a particular vitamin in alleviating the effects of a particular disease. You don’t know which vitamin they’re going to recommend, but you bet it’s the high-potency vitamin you’ve developed. You time your product launch for the day the government announces the results of the study.
• A seven-step system for compressing timeframes
  • Choose a process
    • A great way to identify a potential business is to find a flawed process that you can improve.
  • List the steps in the process
  • Remove a step
    • See if you can remove one step. How would the process work without this step?
    • This is where the disruption comes from.
  • Minimise the steps
    • Take the remaining steps and condense their timeframes.
  • Beta test the new process
    • Find a subset of customers to test and see how the new process works.
  • Adapt the new process
    • Based on the results of your beta test, adapt your process.
  • Refine
    • The adapted process is ready to be rolled out. Repeat this process again to create exponential growth.
• Minimise regret
  • Jeff Bezos, founder of Amazon, talks a lot about regret minimisation – projecting yourself into the future and then thinking about what you might regret not having done.
  • This allows him to take calculated risks because even if he fails, it is no worse than not trying at all.
• Integrity
  • Maintaining your integrity is always a winning strategy.
  • If you compromise your integrity, you are chasing small pockets of growth at the expense of much larger growth goals.

Move 4: Master Strategy to Scale Chapter 11: Moneyball: Designing Systems to Track Your Business

• Leaders who are hands-on in every aspect of their business have yet to learn the benefits of data.
  • If you don’t have measurable numbers to look at when you wake up in the morning, you’re managing inefficiently.
  • Systems help you track and follow up, and support a culture where nothing is ever unclear.
• A important skill is to use data and logic (or a key hire) to predict the future.
  • A critical skill of successful entrepreneurs is to hire people who are smarter than they are and who can make up for their weakness.
    • The way the game is played now, predictive analytics is an area in which you’d better excel.
    • So hiring a predictive analytics expert is the author’s recommendation for the best investment to scale your business.
• To scale a business, every entrepreneur should explain his or her methodology to make it transferable.
  • You cannot scale your business without creating the systems for it to work without you.
    • You have to create lists.
    • You have to create manuals (video libraries can be more effective than printed ones).
    • You need to codify your knowledge. If it exists only in your head, you have a job to do.
    • You have to make sure it is passed on to everyone else in your organisation.
• To identify leaks and trends, make the statistics visible.
  • In the author’s offices, data streams are displayed on screens throughout.
    • This is a way of using the carrot and stick at the same time, without having to do or say anything.
  • The numbers are there for all to see, so performers feel recognised and non-performers feel uncomfortable. Transparency is the ultimate performance-boosting drug.
• The author used the data to look for two things: leaks and trends.
  • The leaks alert him to inefficiencies.
    • The numbers give him clues as to where to look – the lack of the right people, the process itself, the number of people processing applications, etc.
  • Trends are used to see how fast the business is growing and if there are certain adjustments that can be made to make the business more effective (e.g. seasonal trends).
• Reasons for implementing systems
  • What is measured can be scaled and improved.
  • You will know where and who to focus your energy and expertise.
  • You can stop micromanaging and empower your people.
  • Your employees, especially your top performers, won’t be able to fool you with hype.
  • You will become more effective and have some freedom at the same time.

Move 4: Master Strategy to Scale Chapter 12: Stay Paranoid; The Grand Master Never Lets His Guard Down

• Business is war
  • Someone is always preparing to attack you, even if you are the market leader and making record profits.
  • The ‚Fortune 500‘ was first published in 1955, listing the five hundred largest US companies by total annual revenue.
    • Only fifty-two of the original companies remain on the list.
    • According to a 2016 report, companies in the S&P 500 Index
      • from 1965 stayed in the index for an average of 33 years.
      • from 1990 stayed in the index for 20 years
      • is currently forecast to fall to 14 years
    • Half of today’s S&P 500 companies will be replaced in the next 10 years.
• Technology and social media are great equalisers.
  • This makes it even harder to stay relevant, but also easier to compete with the bigger companies.
  • You can’t stay relevant by staying the same.
• Stay alert, stay alive
  • Most successful entrepreneurs share a heightened sense of urgency.
    • For them, every day is a battle and they treat it like it’s a matter of life and death.
      • You don’t want to compete with these people. It’s not that they’re smarter or more skilled, it’s that they’re going to outwork you. They are obsessed with winning.
  • Good generals are paranoid, and they respond to that paranoia by coming up with one great strategy after another.
    • If you can out-strategise your competition, you can protect yourself from things going wrong.
    • Keep making new plans based on changing conditions, anticipate trends and have a strategy to capitalise on them.
    • Pause to investigate the root cause of problems, see if you can identify the problem that lies beneath the surface of things.
    • If paranoia leads to curiosity, which leads to solutions, then it is doing its job.
    • Success will reduce paranoia, leaving you vulnerable.
      • You become complacent, you stop being the hungriest person in the business.
      • You feel that you have passed the point of needing to be paranoid.
• Staying centred in the face of uncertainty
  • Make friends with Murphy’s Law
    • Before you launch a new product, make an investment or take any major step, ask yourself this question: What are the very worst things that could happen as a result of my action?
    • Then take steps to mitigate those potential worst-case scenarios.
    • An anti-Murphy’s Law technique: meet with the best brains on your team and anticipate what could go wrong.
  • Admit defeat by accepting small losses
    • Instead of throwing money at bad investments, great entrepreneurs accept losses and conserve cash for their next venture.
  • Identify your next three (or more) moves
    • In a chaotic situation, you’re vulnerable to decision paralysis.
    • You may be tempted to play it safe.
    • To avoid this problem, commit to deciding your next three steps quickly.
      • When you need to act quickly, focus on three actions you can take to address the problem you are facing.
      • The actions can be solutions or temporary measures to stop the bleeding.
  • Manage your ego and build alliances
    • If you become very successful, you’ll be inundated with praise because you’ll be surrounded by people who are afraid of the decisions you make (e.g. your team may fear you’ll fire them).
    • You need a small circle of people around you who will tell you the truth. It’s the only thing that will keep your ego in check.
    • Staying paranoid also means staying humble.
      • If you don’t have humility, you can’t bring people together.
      • Without humility, people who disagree with you won’t want to do business with you.
      • You need diversity and dissenting voices in the room to generate new ideas or fresh perspectives.
      • Keeping your ego in check means understanding that you can’t do everything yourself. It is hard to trust people, but the alternative – living in isolation – is far worse.
  • Seek wise counsel
    • You need allies, especially when your business is faltering. They will give you the strength to overcome obstacles, bounce back and grow.
    • When it comes to mentors and advisors, you can choose from three levels of expertise: Theory, Witness and Application.
      • Theory – well-read individuals with degrees from prestigious universities.
        • They are intelligent, but not necessarily wise. Wisdom comes from practical experience, and these people offer suggestions based on theory.
        • They can still give you good advice, but they are the lowest level of mentor.
      • Witness – These advisors have worked directly with successful entrepreneurs and can tell you exactly how successful leaders built their businesses.
        • Witnesses have not run the business, but have worked closely with someone who has, which is very valuable.
      • Application – the information is straight from the source.
        • They can tell you exactly what they did and share what didn’t work in their business in a way that someone from theory or observation cannot.
  • Building a business is messy because it is not just a cognitive effort, it is an emotional one.
    • It is unproductive to take things personally. Your ego is your enemy.
    • As difficult as it is, take a step back and look at the situation analytically – don’t let anger or shame dictate your decisions.
    • You’re entitled to these emotions, but don’t let them cloud your judgement.

Move 5: Master Power Plays Chapter 13: How to Beat Goliath and Control the Narrative

• Everyone in business has a Goliath. It could be a company taking market share in a particular region, or a salesperson in your own sales department who is more experienced and performs better.
  • The odds of beating a real Goliath are stacked against you. It’s doable, but you have to be someone who can take pain.
    • The reason Goliaths can be beaten is that the more they win, the more they tend to get complacent and stop working as hard as they used to.
    • They are less in touch with customers and the latest marketing techniques.
    • They have too much to lose to take risks.
    • They cannot hire the crazy and the hungry because the crazy and the hungry are underdogs trying to beat Goliath.
• A dozen ways to beat Goliath
  • Know your weaknesses – this will enable you to be agile and pivot as you take on your Goliath.
  • Know Goliath’s weaknesses – you must find and exploit his Achilles heel; you cannot fight him where he is strong.
  • Master three things you do better – set the terms of your battle in the marketplace.
  • Don’t try to be Goliath – learn moves and information from Goliath, but don’t imitate him; to beat him, you have to use your own strengths.
  • Focus on specialisation – Goliaths tend to generalise to spread their influence and power; you need to specialise to take market share from them.
  • If you’re small, make yourself bigger – embody your future truth and compete as if you have the advantage.
  • Keep a low profile at first – work on your business before looking for a Goliath to fight.
  • Move fast – use your advantages of strength and speed against Goliath; he can’t move as fast as you can.
  • Partner with competitors who share an enemy – Goliaths generate a lot of enemies; look for synergies with these enemies and build strategic alliances.
  • Study history – it can give you context and strategies you never thought of in your fight against Goliath.
  • Let other competitors wear down your opponents – Goliaths face many competitors and you don’t always have to be at the forefront. This can help you focus your resources and give you an advantage.
  • Don’t reveal every aspect of your strategy – it should be self-explanatory.
• Control the narrative
  • Social media is the great leveler. You need to control the narrative and talk about what you are dealing with. If you don’t, others will create the narrative for you.
  • Be authentic.
    • When you post, really share yourself.
    • Let people know who you are and what you stand for. People do not connect with perfect robots, they connect with all of you.
    • Show your flaws and be vulnerable.
    • People identify more with you when you share your down moments. They also identify with you when you challenge them to question their views.
  • Be consistent.
    • Another key to connecting with your audience is to be consistent so they know when to expect to hear from you.
  • Never compromise your integrity.
    • If you are going to take on a sponsor, make sure you are in line with the brand.
    • Delay gratification and turn down a quick offer to play the long game of maintaining your integrity.
• Be shameless about self-promotion – you want people to notice you.
  • Self-promotion is an art.
    • One technique is book dropping – making a relevant comment from a book you have read and mentioning the book.
    • Another technique is to have strong opinions on topics within your area of expertise. In this case, you need to have a degree of certainty about what you are talking about. People can tell the difference between certainty and uncertainty.

Move 5: Master Power Plays Chapter 14: Study Mobsters: How to Sell, Negotiate, and Influence

• In a way, mafia figures are the ultimate entrepreneurs, willing to take big risks for big rewards.
  • They have to think on their feet, make the right decisions quickly, with a lot of information coming at them.
  • Many CEOs and leaders consider ‚The Godfather‘ 1 and 2 to be more educational than entertaining.
  • The struggles of a CEO or founder can be seen in both films – betrayal, loss, recruitment, negotiation, working with family and having success go to your head.
• The mobster’s ability to attract, influence and persuade people from all walks of life is the special talent every entrepreneur needs.
  • Because the stakes are so high, often life and death, they are experts at communicating, preparing and reading other people.
  • They are also master psychologists and negotiators.
• Obsessive preparation:
  • Seven things you must do to prepare for any meeting:
    • Consider the other person’s needs, wants and frustrations. Try to understand first, then be understood.
      • Remember that most people are motivated by fear, greed and saving face.
        • Play for fear: Losing X would have this consequence.
        • Play for greed: Keeping X would potentially bring Y in revenue and Z-figure bonuses for executives.
        • Play to save face: They would look foolish if I went to the competition.
    • Anticipate what the other party will say.
      • The more you can anticipate what the other party will say and why, the better you can craft your story or request.
    • Develop a script/outline of what you want to say.
      • Role play the meeting several times to prepare for different reactions.
    • Ask trusted advisors to point out your blind spots.
    • Put yourself in the best possible frame of mind before the meeting.
      • Fly in a day early, make sure you’re rested and not worried about being late because of a delayed flight.
      • Make sure the way you dress, the food you eat and the exercise you do puts you in the right frame of mind.
    • Build a reputation for over-delivering.
      • None of this matters if you don’t do what you say you’re going to do.
      • The worst thing in business is a reputation as someone who talks a lot but rarely delivers.
  • Effective selling is about conviction and the transfer of emotion.
    • You need to have an absolute and total belief that what you are selling is worth more than the price you are asking for it.
    • Emotion and conviction are what usually sell.
    • No one is born a salesperson, so look for people who believe in your vision and want to build relationships.
    • Selling is about believing in yourself, believing in your business and believing in the value you can bring to the other person, in a win-win outcome for every negotiation.
  • Negotiation is about leverage, but it is not always obvious who has the leverage.
    • It is important to understand it and how to gain power from it, but at the same time to use it carefully so as not to lose the war by winning a battle.
  • You often win by letting others win.
    • Sometimes it also pays to let others think that your great ideas are really theirs.
    • This requires you to control your ego.

Move 5: Master Power Plays Chapter 15: Cultivate Your Power, and Stay Battle Tested

• Real power comes from having options.
  • Instead of looking for one dream home, search the market and come up with three options.
    • If you close the deal with your first choice, you have the advantage because the other options will also make you happy.
    • If you feel that you are the seller’s only option, then you have real leverage.
  • If 30 per cent or more of your revenue comes from one place, you’re in trouble, no matter how much money you make.
    • If your revenue stream is concentrated in one customer, the customer is in control.
• The formula for gaining power is
  • Outwork – it’s important to put in the time. But hard work alone is not enough.
  • Outimprove – find new ways to take your business to the next level. Improve faster than your competitors.
  • Outstrategise – think five moves ahead. Figure out how to scale and have the patience to plan many moves before they bear fruit.
  • Outlast – you need stamina, which comes from making decisions that keep you alert and focused on the game.
• Leadership is knowing what makes people tick.
  • The ultimate power move is getting the best out of people, and it’s the one that brings the most fulfilment.
  • A great leader is someone who leads by example and has moral authority.
  • Leading by example is not enough, the real challenge is to learn how to drive people to their own standard of excellence.
• The four areas that drive people
  • Advancement – reaching new heights is the best form of motivation. If you don’t constantly have the next goal or position for them to move up to, they’ll get bored.
    • Next promotion
    • Completing a task
    • Meeting a deadline
    • Achieving a goal as a team
  • Individuality – the language you need to speak to this group is what their future can look like if they play their part in the company’s growth.
    • Lifestyle
    • Recognition
    • A sense of security
  • Madness – driven by having an enemy, by facing an opponent. They get bored if you don’t keep finding a new enemy or target to reach.
    • Opposition
    • Competition
    • Control
    • Power and glory
    • Proving others wrong
    • Proving others wrong
    • The need to avoid embarrassment
    • Mastery
    • Wanting to be the best (break records)
  • Purpose – driven by the desire to be part of something bigger than themselves, but also wanting to be written about in the (company’s) history books.
    • Make history
    • Helping others
    • Make a difference
    • Impact
    • Enlightenment/Self-actualisation
• People are motivated by different things. Your job as a leader isn’t to drive them (or worse, to fix them), it’s to understand them and help them align the chess pieces in front of them so they can maximise their potential.