豆瓣链接

作者: Clayton M. Christensen / James Allworth / Karen Dillon 
出版社: HarperBusiness
出版年: 2012-5-15
页数: 240
定价: USD 25.99
装帧: Hardcover
ISBN: 9780062102416

• PROLOGUE
  • CHAPTER ONE Just Because You Have Feathers …
• SECTION I Finding Happiness in Your Career
  • CHAPTER TWO What Makes Us Tick
  • CHAPTER THREE The Balance of Calculation and Serendipity
  • CHAPTER FOUR Your Strategy Is Not What You Say It Is
• SECTION II Finding Happiness in Your Relationships
  • CHAPTER FIVE The Ticking Clock
    • A Theory of Good and Bad Capital
    • Planting Saplings When You Decide You Need Shade
    • Investing for Future Happiness
    • The Risk of Sequencing Life Investments
  • CHAPTER SIX What Job Did You Hire That Milkshake For?
    • Cheaper? Chocolatier? Chunkier?
    • Hiring School for a Job
    • What Job Are You Being Hired For?
    • Sacrifice and Commitment
  • CHAPTER SEVEN Sailing Your Kids on Theseus’s Ship
    • Understand Your Capabilities
    • Never Outsource the Future
    • What Your Child Can and Cannot Do
    • What My Parents Didn’t Do for Me
    • Children Learn When They Are Ready to Learn
  • CHAPTER EIGHT The Schools of Experience
    • Is It Really the Right Stuff?
    • The Right Stuff Isn’t Right at All
    • Planning Your Courses at the Schools of Experience
    • A Course for Just Five Players
    • Sending Your Kids to the Right School
  • CHAPTER NINE The Invisible Hand Inside Your Family
    • How Does Culture Form in a Company?
    • This Is the Way Our Family Behaves
• SECTION III Staying Out of Jail
  • The Trap of Marginal Thinking
  • You End Up Paying the Full Price Anyway
  • An Unending Stream of Extenuating Circumstances
  • 100 Percent of the Time Is Easier Than 98 Percent of the Time
• EPILOGUE
  • The Three Parts of Purpose
  • The Person I Want to Become
  • Finding the Right Metric

PROLOGUE

How can I be sure that

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

CHAPTER ONE Just Because You Have Feathers …

On the surface, competition in the computer chip market and the proliferation of global terrorism could not seem like more different problems to tackle. But they are fundamentally the same problem, just in different contexts. Good theory can help us categorize, explain, and, most important, predict.

People often think that the best way to predict the future is by collecting as much data as possible before making a decision. But this is like driving a car looking only at the rearview mirror—because data is only available about the past.

Indeed, while experiences and information can be good teachers, there are many times in life where we simply cannot afford to learn on the job. You don’t want to have to go through multiple marriages to learn how to be a good spouse. Or wait until your last child has grown to master parenthood. This is why theory can be so valuable: it can explain what will happen, even before you experience it.

That’s a hallmark of good theory: it dispenses its advice in “if-then” statements.

Good theory helps people steer to good decisions—not just in business, but in life, too.

SECTION I Finding Happiness in Your Career

The only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it. —Steve Jobs

I want you to be able to experience that feeling—to wake up every morning thinking how lucky you are to be doing what you’re doing.

All of these factors—priorities, balancing plans with opportunities, and allocating your resources—combine to create your strategy. The process is continuous: even as your strategy begins to take shape, you’ll learn new things, and new problems and opportunities will always emerge. They’ll feed back in; the cycle is continuous.

If you can understand and manage this strategy process, you’ll have the best shot at getting it right—of having a career that you will truly love.

CHAPTER TWO What Makes Us Tick

Back in 1976, two economists, Michael Jensen and William Meckling,focused on a problem known as agency theory, or incentive theory: why don’t managers always behave in a way that is in the best interest of shareholders? The root cause, as Jensen and Meckling saw it, is that people work in accordance with how you pay them. The takeaway was that you have to align the interests of executives with the interests of shareholders. That way, if the stock goes up, executives are compensated better, and it makes both shareholders and executives happy.

Well, there is a second school of thought—often called two-factor theory, or motivation theory—or motivation theory—that turns the incentive theory on its head. It acknowledges that you can pay people to want what you want—over and over again. But incentives are not the same as motivation. True motivation is getting people to do something because they want to do it. This type of motivation continues, in good times and in bad.

Herzberg, probably one of the most incisive writers on the topic of motivation theory, notes the common assumption that job satisfaction is one big continuous spectrum—starting with very happy on one end and reaching all the way down to absolutely miserable on the other—is not actually the way the mind works. Instead, satisfaction and dissatisfaction are separate, independent measures. This means, for example, that it’s possible to love your job and hate it at the same time.

Let me explain. This theory distinguishes between two different types of factors: hygiene factors and motivation factors.

On one side of the equation, there are the elements of work that, if not done right, will cause us to be dissatisfied. These are called hygiene factors. Hygiene factors are things like status, compensation, job security, work conditions, company policies, and supervisory practices. It matters, for example, that you don’t have a manager who manipulates you for his own purposes—or who doesn’t hold you accountable for things over which you don’t have responsibility. Bad hygiene causes dissatisfaction. You have to address and fix bad hygiene to ensure that you are not dissatisfied in your work.

Interestingly, Herzberg asserts that compensation is a hygiene factor, not a motivator.

This is an important insight from Herzberg’s research: if you instantly improve the hygiene factors of your job, you’re not going to suddenly love it. At best, you just won’t hate it anymore. The opposite of job dissatisfaction isn’t job satisfaction, but rather an absence of job dissatisfaction. They’re not the same thing at all. It is important to address hygiene factors such as a safe and comfortable working environment, relationship with managers and colleagues, enough money to look after your family—if you don’t have these things, you’ll experience dissatisfaction with your work. But these alone won’t do anything to make you love your job—they will just stop you from hating it.

So, what are the things that will truly, deeply satisfy us, the factors that will cause us to love our jobs? These are what Herzberg’s research calls motivators. Motivation factors include challenging work, recognition, responsibility, and personal growth. Feelings that you are making a meaningful contribution to work arise from intrinsic conditions of the work itself.

There’s an old saying: find a job that you love and you’ll never work a day in your life. People who truly love what they do and who think their work is meaningful have a distinct advantage when they arrive at work every day. They throw their best effort into their jobs, and it makes them very good at what they do.

This, in turn, can mean they get paid well; careers that are filled with motivators are often correlated with financial rewards. But sometimes the reverse is true, too—financial rewards can be present without the motivators.

CHAPTER THREE The Balance of Calculation and Serendipity

In our lives and in our careers, whether we are aware of it or not, we are constantly navigating a path by deciding between our deliberate strategies and the unanticipated alternatives that emerge. Each approach is vying for our minds and our hearts, making its best case to become our actual strategy. Neither is inherently better or worse; rather, which you should choose depends on where you are on the journey. Understanding this—that strategy is made up of these two disparate elements, and that your circumstances dictate which approach is best—will better enable you to sort through the choices that your career will constantly present.

If you have found an outlet in your career that provides both the requisite hygiene factors and motivators, then a deliberate approach makes sense. Your aspirations should be clear, and you know from your present experience that they are worth striving for. Rather than worrying about adjusting to unexpected opportunities, your frame of mind should be focused on how best to achieve the goals you have deliberately set.

But if you haven’t reached the point of finding a career that does this for you, then, like a new company finding its way, you need to be emergent. This is another way of saying that if you are in these circumstances, experiment in life. As you learn from each experience, adjust. Then iterate quickly. Keep going through this process until your strategy begins to click.

As you go through your career, you will begin to find the areas of work you love and in which you will shine; you will, hopefully, find a field where you can maximize the motivators and satisfy the hygiene factors. But it’s rarely a case of sitting in an ivory tower and thinking through the problem until the answer pops into your head. Strategy almost always emerges from a combination of deliberate and unanticipated opportunities. What’s important is to get out there and try stuff until you learn where your talents, interests, and priorities begin to pay off. When you find out what really works for you, then it’s time to flip from an emergent strategy to a deliberate one.

There’s a tool that can help you test whether your deliberate strategy or a new emergent one will be a fruitful approach. It forces you to articulate what assumptions need to be proved true in order for the strategy to succeed. The academics who created this process, Ian MacMillan and Rita McGrath, called it “discovery-driven planning,” but it might be easier to think about it as “What has to prove true for this to work?”

When a promising new idea emerges, financial projections should, of course, be made. But instead of pretending these are accurate, acknowledge that at this point, they are really rough. Since everybody knows that numbers have to look good for management to green-light any project, you don’t go through the charade of implicitly encouraging teams to manipulate the numbers to look as strong as possible.

Instead, ask the project teams to compile a list of all the assumptions that have been made in those initial projections. Then ask them: “Which of these assumptions need to prove true in order for us to realistically expect that these numbers will materialize?” The assumptions on this list should be rank-ordered by importance and uncertainty. At the top of the list should be the assumptions that are most important and least certain, while the bottom of the list should be those that are least important and most certain.

Only after you understand the relative importance of all the underlying assumptions should you green-light the team—but not in the way that most companies tend to do. Instead, find ways to quickly, and with as little expense as possible, test the validity of the most important assumptions.

Once the company understands whether the initial important assumptions are likely to prove true, it can make a much better decision about whether to invest in this project or not.

The logic of taking this approach is compelling—of course everyone wants to achieve gorgeous numbers, so why go through the pretense of asking managers to keep working on them until they look good? Instead, this approach of “What assumptions must prove true?” offers a simple way to keep strategy from going far off-course. It causes teams to focus on what truly matters to get the numbers to materialize. If we ask the right questions, the answers generally are easy to get.

This type of planning can help you consider job opportunities, too.

Before you take a job, carefully list what things others are going to need to do or to deliver in order for you to successfully achieve what you hope to do. Ask yourself: “What are the assumptions that have to prove true in order for me to be able to succeed in this assignment?” List them. Are they within your control?

Equally important, ask yourself what assumptions have to prove true for you to be happy in the choice you are contemplating. Are you basing your position on extrinsic or intrinsic motivators? Why do you think this is going to be something you enjoy doing? What evidence do you have? Every time you consider a career move, keep thinking about the most important assumptions that have to prove true, and how you can swiftly and inexpensively test if they are valid. Make sure you are being realistic about the path ahead of you.

• J20130406：当事业面临选择时，你通常会思考hygiene factors and motivation factors两方面来进行判断。但是很多时候，抉择似乎是意外发生的，而不像是事先缜密安排好的。
• J20130406：在做决定之前，应该把所有做的假设按重要度为优先级全部列出来，你应该明白你的选择是基于如上这些假设的，所以你要好好思考这些假设是否合理？
• J20130406：再说的具体些，对于换工作这件事情，你应该仔细的列出所有驱使你加入新工作的所有假设，它们真的能让你成功么？比现在成功么？这些假设合理么？按重要度优先级全部列出来。
• J20130406：下一步，最重要的一步，就是证明这些假设是合理的。新的工作能使得你更加快乐么？两因素理论在这里开始派上用场。然后对于所有这些假设要用一些简单的方法证明它们的有效性。这样对于你做出的选择，你已经尽力做到现实判断与思考了。

CHAPTER FOUR Your Strategy Is Not What You Say It Is

Here is a way to frame the investments that we make in the strategy that becomes our lives: we have resources—which include personal time, energy, talent, and wealth—and we are using them to try to grow several “businesses” in our personal lives. These include having a rewarding relationship with our spouse or significant other; raising great children; succeeding in our careers; contributing to our church or community; and so on. Unfortunately, however, our resources are limited and these businesses are competing for them. How should we devote our resources to each of these pursuits?

Unless you manage it mindfully, your personal resource allocation process will decide investments for you according to the “default” criteria that essentially are wired into your brain and your heart. As is true in companies, your resources are not decided and deployed in a single meeting or when you review your calendar for the week ahead. It is a continuous process—and you have, in your brain, a filter for making choices about what to prioritize.

The danger for high-achieving people is that they’ll unconsciously allocate their resources to activities that yield the most immediate, tangible accomplishments. They prioritized things that gave them immediate returns—such as a promotion, a raise, or a bonus—rather than the things that require long-term work, the things that you won’t see a return on for decades, like raising good children.

• J20130406：虽然我们都清楚，我们企图在各个方面获得成就，事业，家庭，友情，社区等等。但是人的资源和精力是有限的，我们虽然说我们更关注家庭方面，但是我们却很少投入其中。真正的优先级不是按你说的来判定，而是按你实际生活中做的来判定。我们花了太多的精力在那些可以马上获得回报的事情上，比如获得升职，获得奖励。而那些长期重要的事情呢？如关心家庭，它们似乎在短期内看不到效果，所以被我们忽略了。
• J20150326：希望自己的欲望马上得到满足是人的天性，而抑制它需要心智的成熟。

SECTION II Finding Happiness in Your Relationships

The happiest moments of my life have been the few which I have passed at home in the bosom of my family. —Thomas Jefferson

Intimate, loving, and enduring relationships with our family and close friends will be among the sources of the deepest joy in our lives. They are worth fighting for.

CHAPTER FIVE The Ticking Clock

A Theory of Good and Bad Capital

At a basic level, there are two goals investors have when they put money into a company: growth and profitability. Neither is easy. Professor Amar Bhide showed in his Origin and Evolution of New Business that 93 percent of all companies that ultimately become successful had to abandon their original strategy—because the original plan proved not to be viable. In other words, successful companies don’t succeed because they have the right strategy at the beginning; but rather, because they have money left over after the original strategy fails, so that they can pivot and try another approach. Most of those that fail, in contrast, spend all their money on their original strategy—which is usually wrong.

The theory of good money and bad money essentially frames Bhide’s work as a simple assertion. When the winning strategy is not yet clear in the initial stages of a new business, good money from investors needs to be patient for growth but impatient for profit. It demands that a new company figures out a viable strategy as fast as and with as little investment as possible—so that the entrepreneurs don’t spend a lot of money in pursuit of the wrong strategy. Given that 93 percent of companies that ended up being successful had to change their initial strategy, any capital that demands that the early company become very big, very fast, will almost always drive the business off a cliff instead.

That is why capital that seeks growth before profits is bad capital.

But the reason why both types of capital appear in the name of the theory is that once a viable strategy has been found, investors need to change what they seek—they should become impatient for growth and patient for profit.

• J20130406：93%的最终获得成功的企业都放弃了它们最初的战略，因为这些战略被证明是不可行的。基于此，我们可以推论：当企业在初创阶段并没有找到制胜的战略时，投资人应该对企业成长保持耐心，而对企业获利表示迫切。当企业找到制胜的战略时，则刚好相反，对企业成长表示迫切，而对企业获利保持耐心。

Planting Saplings When You Decide You Need Shade

Some of the most frequent offenders in failing to abide by this theory are big investors and successful existing businesses looking to invest in new growth businesses. The way in which this happens is through a predictable and simple three-step process, as articulated by Matthew Olson and Derek van Bever in Stall Points.

The first step is that because the probability is so high that the initial plan isn’t viable, the investor needs to invest in the next wave of growth even while the original business is strong and growing—to give the new initiative the time to figure out a viable strategy. Despite this, the owner of the capital postpones the investment because today it seems unwarranted, given the strength of the core business and its incessant appetite for more capital investment and executive bandwidth. Deal with tomorrow tomorrow.

In the next step, tomorrow arrives. The original core business has become mature and stops growing. The owner of the capital suddenly realizes that he should have invested several years earlier in the next growth business, so that when the core business stalled, the next engine of growth and profit would already be taking over as the engine for growth and profit. Instead, the engine just isn’t there.

Third, the owner of the capital demands that any business that he invests in must become very big, very fast. For a venture that generates $40 million of business, to grow at a 25 percent annual rate you’ll need to find $10 million of new growth next year. But if a venture has grown to become a $40 billion business and wants to continue growing 25 percent next year, you’ll need to find $10 billion in new business. The stakes—and pressure—become enormous. To accelerate it faster, shareholders pour lots of capital into these initiatives. But all too often, this abundant capital gives fuel to the entrepreneurs, allowing them to recklessly pursue the wrong strategy aggressively. As these new businesses drive at full speed over the cliff, analysts construct unique stories for why each one failed.

Investing for Future Happiness

It can be all too easy to default to a bad money approach in our lives, too. Many of us thrive on the intensity of a demanding job—one that we believe in and enjoy. We like proving what we can do under pressure. Our projects, our clients, and our colleagues challenge us. We invest ourselves in our jobs. But in order to accomplish all this, we start to think of our jobs as requiring all our attention—and that’s exactly what we give them.

While most of us do have a deliberate strategy of creating deep, love-filled relationships with members of our family and our friends, in reality we invest in a strategy for our lives that we would never have aspired to: having shallow friendships with many but deep friendships with none; becoming divorced, sometimes repeatedly; and having children who feel alienated from us within our own homes, or who are raised by a stepparent sometimes thousands of miles away.

People in their later years in life so often lament that they didn’t keep in better touch with friends and relatives who once mattered profoundly to them. Life just seemed to get in the way. The consequences of letting that happen, however, can be enormous.

The Risk of Sequencing Life Investments

One of the most common versions of this mistake that high-potential young professionals make is believing that investments in life can be sequenced. The logic is, for example, “I can invest in my career during the early years when our children are small and parenting isn’t as critical. When our children are a bit older and begin to be interested in things that adults are interested in, then I can lift my foot off my career accelerator. That’s when I’ll focus on my family.” Guess what. By that time the game is already over. An investment in a child needs to have been made long before then, to provide him with the tools he needs to survive life’s challenges—even earlier than you might realize.

There’s significant research emerging that demonstrates just how important the earliest months of life are to the development of intellectual capacity.

CHAPTER SIX What Job Did You Hire That Milkshake For?

Cheaper? Chocolatier? Chunkier?

The job-to-be-done theory began to coalesce in a project that I worked on with some friends for one of the big fast-food restaurants. The company was trying to ramp up the sales of their milkshakes. The company had spent months studying the issue. They had brought customers in who fit the profile of the quintessential milkshake consumer and peppered them with questions: “Can you tell us how we can improve our milkshake so you’d buy more of them? Do you want it chocolatier? Cheaper? Chunkier?” The company would take all this feedback, then go off and improve the milkshake on those dimensions. They worked and worked on making the milkshake better as a result—but these improvements had no impact on sales or profits whatsoever. The company was stumped.

My colleague Bob Moesta then offered to bring a completely different perspective to the milkshake problem: “I wonder what job arises in people’s lives that causes them to come to this restaurant to ‘hire’ a milkshake?”

If you understand that there are two different jobs that the milkshake is being hired to do, it becomes obvious how to improve the shake. The morning job needs a more viscous milkshake, which takes even longer to suck up. You might add in chunks of fruit—but not to make it healthy, because that’s not the reason it’s being hired. It’s being hired by morning customers to keep their commute interesting. The unexpected pieces of fruit would do just that. And, finally, you’d wheel the dispensing machine out from behind the counter to the front, and install a prepaid swipe-card, so that commuters could run in, gas up, and go—and never get caught in a line.

The afternoon make-me-feel-good-about-being-a-parent job is fundamentally different. Maybe the afternoon milkshake should come in half sizes; be less thick so it could be finished more quickly; and so on.

There is no one right answer for all circumstances. You have to start by understanding the job the customer is trying to have done.

Every successful product or service, either explicitly or implicitly, was structured around a job to be done. Addressing a job is the causal mechanism behind a purchase. If someone develops a product that is interesting, but which doesn’t intuitively map in customers’ minds on a job that they are trying to do, that product will struggle to succeed—unless the product is adapted and repositioned on an important job.

• J20130406：把产品或者服务当成一种打工，你的客户为啥要雇佣你？

Hiring School for a Job

The conclusion we reached was that going to school is not a job that children are trying to get done. It is something that a child might hire to do the job, but it isn’t the job itself. The two fundamental jobs that children need to do are to feel successful and to have friends—every day. Sure, they could hire school to get these jobs done. Some achieve success and friends in the classroom, the band, the math club, or the basketball team. But to feel successful and have friends, they could also drop out of school and join a gang, or buy a car and cruise the streets. Viewed from the perspective of jobs, it becomes very clear that schools don’t often do these jobs well at all—in fact, all too often, schools are structured to help most students feel like failures. We had assumed going in that those who succeed at school do so because they are motivated. But we concluded that all students are similarly motivated—to succeed. The problem is, only a fraction of students feel successful through school.

Indeed, we learned that just as the fast-food restaurant had been improving the milkshake on dimensions of improvement irrelevant to the jobs that customers were trying to do, our schools were improving themselves on dimensions of improvement irrelevant to the job that students are trying to do. There is no way that we can motivate children to work harder in class by convincing them that they should do this. Rather, we need to offer children experiences in school that help them do these jobs—to feel successful and do it with friends.

• J20130406：站在学校的角度来看，孩子们来你这里读书，也是一种雇佣，孩子们为什么要雇佣你？

What Job Are You Being Hired For?

Like those milkshake buyers, you and your wife can’t always articulate what the fundamental jobs are that you each are personally trying to do, let alone articulate the fundamental jobs that your wife has, for which she might hire a husband to get done. Understanding the job requires the critical ingredients of intuition and empathy. You have to be able to put yourself not just in her shoes, but her chair—and indeed, her life. More important, the jobs that your spouse is trying to do are often very different from the jobs that you think she should want to do.

I suspect that if we studied marriage from the job-to-be-done lens, we would find that the husbands and wives who are most loyal to each other are those who have figured out the jobs that their partner needs to be done—and then they do the job reliably and well. I know for me, this has a profound effect. By working to truly understand the job she needs done, and doing it well, I can cause myself to fall more deeply in love with my spouse, and, I hope, her with me. Divorce, on the other hand, often has its roots when one frames marriage only in terms of whether she is giving me what I want. If she isn’t, then I dispense with her, and find someone else who will.

• J20130406：作为丈夫，你可被雇佣的价值在哪里？

Sacrifice and Commitment

This may sound counterintuitive, but I deeply believe that the path to happiness in a relationship is not just about finding someone who you think is going to make you happy. Rather, the reverse is equally true: the path to happiness is about finding someone who you want to make happy, someone whose happiness is worth devoting yourself to. If what causes us to fall deeply in love is mutually understanding and then doing each other’s job to be done, then I have observed that what cements that commitment is the extent to which I sacrifice myself to help her succeed and for her to be happy.

This principle—that sacrifice deepens our commitment—doesn’t just work in marriages. It applies to members of our family and close friends, as well as organizations and even cultures and nations.

It’s natural to want the people you love to be happy. What can often be difficult is understanding what your role is in that. Thinking about your relationships from the perspective of the job to be done is the best way to understand what’s important to the people who mean the most to you. It allows you to develop true empathy. Asking yourself “What job does my spouse most need me to do?” gives you the ability to think about it in the right unit of analysis. When you approach your relationships from this perspective, the answers will become much more clear than they would by simply speculating about what might be the right thing to do.

But you have to go beyond understanding what job your spouse needs you to do. You have to do that job. You’ll have to devote your time and energy to the effort, be willing to suppress your own priorities and desires, and focus on doing what is required to make the other person happy. Nor should we be timid in giving our children and our spouses the same opportunities to give of themselves to others. You might think this approach would actually cause resentment in relationships because one person is so clearly giving up something for the other. But I have found that it has the opposite effect. In sacrificing for something worthwhile, you deeply strengthen your commitment to it.

• J20130406：如何快乐？要找到那些你期望他快乐的人，他的快乐就是你的快乐。

CHAPTER SEVEN Sailing Your Kids on Theseus’s Ship

Understand Your Capabilities

The factors that determine what a company can and cannot do—its capabilities—fall into one of three buckets: resources, processes, and priorities. These offer an accurate snapshot of a company at any given time, because they are mutually exclusive (a part of a business cannot fit into more than one of the categories) and are collectively exhaustive (together, the three categories account for everything inside of the business). Together, these capabilities are crucial in order to assess what a company can and, perhaps more important, cannot accomplish.

Capabilities are dynamic and built over time; no company starts out with its capabilities fully developed. The most tangible of the three factors is resources, which include people, equipment, technology, product designs, brands, information, cash, and relationships with suppliers, distributors, and customers. Resources are usually people or things—they can be hired and fired, bought and sold, depreciated or built. Many resources are visible and often are measurable, so managers can readily assess their value.

But resources are only one of three critical factors driving a business. Organizations create value as employees transform resources into products and services of greater worth. The ways in which those employees interact, coordinate, communicate, and make decisions are known as processes. These enable the resources to solve more and more complicated problems.Processes include the ways that products are developed and made, and the methods by which market research, budgeting, employee development, compensation, and resource allocation are accomplished. Unlike resources, which are often easily seen and measured, processes can’t be seen on a balance sheet.

The third—and perhaps most significant—capability is an organization’s priorities. This set of factors defines how a company makes decisions; it can give clear guidance about what a company is likely to invest in, and what it will not. Employees at every level will make prioritization decisions—what they will focus on today, and what they’ll put at the bottom of their list.

Never Outsource the Future

The theory of capabilities gives companies the framework to determine when outsourcing makes sense, and when it does not. There are two important considerations. First, you must take a dynamic view of your suppliers’ capabilities. Assume that they can and will change. You should not focus on what the suppliers are doing now, but, rather, focus on what they are striving to be able to do in the future. Second, and most critical of all: figure out what capabilities you will need to succeed in the future. These must stay in-house—otherwise, you are handing over the future of your business.

What Your Child Can and Cannot Do

The Resources, Processes, and Priorities model of capabilities can help us gauge what our children will need to be able to do, given the types of challenges and problems that we know they will confront in their future.

The first of the factors that determine what a child can and cannot do is his resources. These include the financial and material resources he has been given or has earned, his time and energy, what he knows, what his talents are, what relationships he has built, and what he has learned from the past.

The second group of factors that determine a child’s capabilities are processes. Processes are what your child does with the resources he has, to accomplish and create new things for himself. Just as within a business, they are relatively intangible, but are a large part of what makes each child unique. These include the way he thinks, how he asks insightful questions, how and whether he can solve problems of various types, how he works with others, and so on.

Let me give you some examples to highlight the difference between the resources and processes of a child. Take a young man sitting in class. Teachers and scholars can create knowledge, and our young man can sit in class and passively absorb the knowledge that others have created. That knowledge now becomes a resource for him; he might use it to get a better score on a test that simply measures how much information he has acquired. But it doesn’t necessarily mean he has acquired the ability to create new knowledge. If he were able to take the information he absorbed in class and use it to, say, create an application for a tablet computer, like an iPad, or conduct his own scientific experiment—that capability is a process.

Priorities determine how a child will make decisions in his life—which things in his mind and life he will put to the top of the list, which he will procrastinate doing, and which he will have no interest in doing at all.

To understand how all three work together, let’s continue the example of a child developing an iPad app. If your child has a computer on which to program, and knowledge of how to program an iPad app, he has resources. The way in which he pulls these resources together to create something novel, something that he hasn’t been taught explicitly how to do, to learn as he goes along—these are his processes. And the desire he has to spend his precious free time creating the app, the problem he cares about enough to create the app to solve, the idea of creating something unique, or the fact that he cares that his friends will be impressed—those are the priorities leading him to do it. Resources are what he uses to do it, processes are how he does it, and priorities are why he does it.

What My Parents Didn’t Do for Me

The end result of these good intentions for our children is that too few reach adulthood having been given the opportunity to shoulder onerous responsibility and solve complicated problems for themselves and for others. Self-esteem—the sense that “I’m not afraid to confront this problem and I think I can solve it”—doesn’t come from abundant resources. Rather, self-esteem comes from achieving something important when it’s hard to do.

Children Learn When They Are Ready to Learn

Denying children the opportunity to develop their processes is not the only way outsourcing has damaged their capabilities, either. There is something far more important at risk when we outsource too much of our lives: our values.

” And when I ask them about the times when Jim and I sat them down specifically to share what we thought were foundationally important values of our family, well, the kids have no memory of any of them. I guess the thing to learn from this is that children will learn when they are ready to learn, not when we’re ready to teach them.”

CHAPTER EIGHT The Schools of Experience

Is It Really the Right Stuff?

Many companies looking to make top staffing decisions tend to replicate the same kind of thinking: that somehow there is a definitive way to identify the difference between the good and the great. In business, the “test” is what a résumé shows; you can tell by this whether a candidate is likely to thrive in a challenging new position. Underlying this is a belief that top candidates achieved what they did because of innate talent; that all these talents were qualities the candidate was born with, lying dormant, waiting to be used and honed. Recruiters search for those candidates who have gone from success to success to success, a kind of business version of the fighter-pilot tests. On paper, top candidates always seem to stand out. They have Wolfe’s term, “the right stuff.”

Several years ago, in a major executive education program for over a thousand senior leaders from a variety of companies, I asked by survey this question: “Of all of the people that you hired or promoted into positions of (defined) responsibility in your company since you’ve had your current responsibility, what percentage of them turned out to be a superb choice? What percentage is performing adequately? And what percentage turned out to have been the wrong person for the job they were hired or promoted to do?” By their own reckoning, about a third were superb choices; 40 percent were adequate choices; and about 25 percent turned out to be mistakes.

The Right Stuff Isn’t Right at All

When we compared the candidates’ résumés, Candidate A won hands-down. He had the “right stuff”—the adjectives about him just blew Candidate B out of the water. But that didn’t make him right for us. Had we looked for the past-tense verbs on their résumés, however, Candidate B would have won hands-down—because the résumé would have shown that he had taken the right courses in the schools of experience—including a field graduate seminar called “Scaling up process technology from the lab, through pilot scale, and then full scale.” He had wrestled with problems that the rest of us did not even know we were going to face.

Or, in other words, he had the right processes to do the job. In expressing a preference for the more polished candidate, we biased ourselves toward resources over the processes. It is what I described in the previous chapter as something parents do, and it’s an easy mistake to make.

Planning Your Courses at the Schools of Experience

One of the CEOs I have most admired, Nolan Archibald, has spoken to my students on this theory. Archibald has had a stellar career, including having been the youngest-ever CEO of a Fortune 500 company—Black & Decker.

Instead of taking jobs or assignments because they looked like a fast-track to the C-suite, he chose his options very deliberately for the experience they would provide. “I wouldn’t ever make the decision based upon how much it paid or the prestige,” he told my students “Instead, it was always: is it going to give me the experiences I need to wrestle with?”

His first job after business school was not a glamorous consulting position. Instead, he worked in Northern Quebec, operating an asbestos mine. He thought that particular experience, of managing and leading people in difficult conditions, would be important to have mastered on his route to the C-suite. It was the first of many such decisions he made.

A Course for Just Five Players

Does that mean that we should never hire or promote an inexperienced manager who had not already learned to do what needs to be done in this assignment? The answer: it depends. In a start-up company where there are no processes in place to get things done, then everything that is done must be done by individual people—resources. In this circumstance, it would be risky to draft someone with no experience to do the job—because in the absence of processes that can guide people, experienced people need to lead. But in established companies where much of the guidance to employees is provided by processes, and is less dependent upon managers with detailed, hands-on experience, then it makes sense to hire or promote someone who needs to learn from experience.

The value of giving people experiences before they need them plays out in many fields other than business. The coach of one of my favorite basketball teams while I was growing up was always just driven to win and to win big. The coach kept playing the five best players right down to the end when he was confident that no one could blow the wide lead. This often meant that we won by thirty-five rather than twenty-five points

The players further down the bench did occasionally log “garbage time”—one or two minutes at the end when it didn’t matter what anybody did. My friends and I referred to them as “scrubs.”

I remember, however, a particular game when I realized the limitations to the coach’s drive to always win big. As usual, they’d made it all the way to the championship game. But this year, the team they were competing against was playing particularly well. Our starting team had to work harder than ever to try to get the lead the coach expected. By the end of the third quarter, the starters were exhausted. This time, however, he needed someone to put into the game at that critical moment. But there was a problem: he didn’t see anyone on the bench whom he trusted—because he had never before put them into tight situations where they could have honed their abilities to perform under pressure. So he had to keep playing his weary starters. They lost that game—and the league championship.

The coach’s school of experience didn’t offer open enrollment in a course on “How to deal with pressure.” It was closed for everyone except his five starting players. And the team paid the price.

Sending Your Kids to the Right School

Thinking back on your own life, I bet you had many visits to various schools of experience, some—like the basketball team’s course on dealing with pressure—more painful than others. Obviously, it will help a lot if you can work out which courses will be important for you to master before you need them.

As a parent, you can find small opportunities for your child to take important courses early on. You’re doing what Nolan Archibald did, working out what courses your child will need to be successful and then reverse engineering the right experiences. Encourage them to stretch—to aim for lofty goals. If they don’t succeed, make sure you’re there to help them learn the right lesson: that when you aim to achieve great things, it is inevitable that sometimes you’re not going to make it. Urge them to pick themselves up, dust themselves off, and try again. Tell them that if they’re not occasionally failing, then they’re not aiming high enough. Everyone knows how to celebrate success, but you should also celebrate failure if it’s as a result of a child striving for an out-of-reach goal.

CHAPTER NINE The Invisible Hand Inside Your Family

How Does Culture Form in a Company?

Culture is a way of working together toward common goals that have been followed so frequently and so successfully that people don’t even think about trying to do things another way. If a culture has formed, people will autonomously do what they need to do to be successful.

This Is the Way Our Family Behaves

The parallels between a business and a family should be clear. Just like a manager who wants to count on employees using the right priorities to solve problems, parents want to set those priorities, too, so that family members will solve problems and confront dilemmas instinctively, whether or not the parents are there guiding or observing. Kids won’t have to stop and think about what Mom or Dad wants them to do—they’ll just go about it because their family culture has dictated, “This is the way our family behaves.”

SECTION III Staying Out of Jail

The Trap of Marginal Thinking

Blockbuster followed a principle that is taught in every fundamental course in finance and economics: that in evaluating alternative investments, we should ignore sunk and fixed costs (costs that have already been incurred), and instead base decisions on the marginal costs and marginal revenues (the new costs and revenues) that each alternative entails.

But it’s a dangerous way of thinking. Almost always, such analysis shows that the marginal costs are lower, and marginal profits are higher, than the full cost. This doctrine biases companies to leverage what they have put in place to succeed in the past, instead of guiding them to create the capabilities they’ll need in the future. If we knew the future would be exactly the same as the past, that approach would be fine. But if the future’s different—and it almost always is—then it’s the wrong thing to do.

You End Up Paying the Full Price Anyway

As Nucor began to eat into U.S. Steel’s market, a group of engineers at U.S. Steel got together and concluded that if U.S. Steel was going to survive, it had to build the kind of steel mills that Nucor had. That way, it could create steel products at a much lower cost, remaining competitive against Nucor. So the engineers put together a business plan, which showed that U.S. Steel’s profit per ton would increase sixfold in the new plant.

Everybody agreed this was a promising plan … everybody except the chief financial officer. When he saw that the plan involved spending money to build new mills, he put the brakes on. “Why should we build a new mill? We have 30 percent excess capacity in our existing mills. If you want to sell an extra ton of steel, make it in our existing mills. The marginal cost of producing an additional ton in our existing mills is so low that the marginal profit is four times greater than if we build a completely new mini-mill.”

The CFO made the marginal-thinking mistake. He didn’t see that by utilizing the existing plant, they were not changing their fundamental cost of making steel at all. Building a completely new mill would have had an up-front cost, but then given the company a new and important capability for the future.

Hence, the paradox: Why is it that the big, established companies that have so much capital find these initiatives to be so costly? And why do the small entrants with much less capital find them to be straightforward?

The answer is in the theory of marginal versus full costs. Every time an executive in an established company needs to make an investment decision, there are two alternatives on the menu. The first is the full cost of making something completely new. The second is to leverage what already exists, so that you only need to incur the marginal cost and revenue. Almost always, the marginal-cost argument overwhelms the full-cost. For the entrant, in contrast, there is no marginal-cost item on the menu. If it makes sense, then you do the full-cost alternative. Because they are new to the scene, in fact, the full cost is the marginal cost.

When there is competition, and this theory causes established companies to continue to use what they already have in place, they pay far more than the full cost—because the company loses its competitiveness.

As Henry Ford once put it, “If you need a machine and don’t buy it, then you will ultimately find that you have paid for it and don’t have it.”

An Unending Stream of Extenuating Circumstances

This marginal-cost argument applies the same way in choosing right and wrong: it addresses the third question I discuss with my students, of how to live a life of integrity—and stay out of jail. The marginal cost of doing something “just this once” always seems to be negligible, but the full cost will typically be much higher. Yet unconsciously, we will naturally employ the marginal-cost doctrine in our personal lives. A voice in our head says, “Look, I know that as a general rule, most people shouldn’t do this. But in this particular extenuating circumstance, just this once, it’s okay.” And the voice in our head seems to be right; the price of doing something wrong “just this once” usually appears alluringly low. It suckers you in, and you don’t see where that path is ultimately headed or the full cost that the choice entails.

100 Percent of the Time Is Easier Than 98 Percent of the Time

Many of us have convinced ourselves that we are able to break our own personal rules “just this once.” In our minds, we can justify these small choices. None of those things, when they first happen, feels like a life-changing decision. The marginal costs are almost always low. But each of those decisions can roll up into a much bigger picture, turning you into the kind of person you never wanted to be. That instinct to just use the marginal costs hides from us the true cost of our actions.

The first step down that path is taken with a small decision. You justify all the small decisions that lead up to the big one and then you get to the big one and it doesn’t seem so enormous anymore. You don’t realize the road you are on until you look up and see you’ve arrived at a destination you would have once considered unthinkable.

If you give in to “just this once,” based on a marginal-cost analysis, you’ll regret where you end up. That’s the lesson I learned: it’s easier to hold to your principles 100 percent of the time than it is to hold to them 98 percent of the time. The boundary—your personal moral line—is powerful, because you don’t cross it; if you have justified doing it once, there’s nothing to stop you doing it again.

Decide what you stand for. And then stand for it all the time.

EPILOGUE

You must have a purpose in your life. For that reason, I want to describe to you the best process I know to develop a purpose, and illustrate it with the example of how I used this process in my own life. Mine was a rigorous process, and I recommend it to you as well.

The Three Parts of Purpose

A useful statement of purpose for a company needs three parts. The first is what I will call a likeness. By analogy, a master painter often will create a pencil likeness that he has seen in his mind, before he attempts to create it in oils. A likeness of a company is what the key leaders and employees want the enterprise to have become at the end of the path that they are on. The word likeness is important here, because it isn’t something that employees will excitedly “discover” that the company has become at some point in the future. Rather, the likeness is what the managers and employees hope they will have actually built when they reach each critical milestone in their journey.

Second, for a purpose to be useful, employees and executives need to have a deep commitment—almost a conversion—to the likeness that they are trying to create. The purpose can’t begin and end on paper. Because issues demanding answers about priorities will repeatedly emerge in unpredictable ways, employees without this deep conversion will find that the world will compromise the likeness by wave after wave of extenuating circumstances.

The third part of a company’s purpose is one or a few metrics by which managers and employees can measure their progress. These metrics enable everyone associated with the enterprise to calibrate their work, keeping them moving together in a coherent way.

The same is true for leaders outside of the business sphere, too. People who have led movements for change, such as Mahatma Gandhi, Martin Luther King, and the Dalai Lama, have had an extraordinarily clear sense of purpose. So, too, have social organizations that have fought to make the world a better place, such as Médecins Sans Frontiers, the World Wildlife Fund, and Amnesty International.

Finally, please remember that this is a process, not an event. It took me years to fully understand my own purpose. But the journey has been worthwhile. With that as background, I will share how I have come to understand my purpose.

The Person I Want to Become

• A man who is dedicated to helping improve the lives of other people
• A kind, honest, forgiving, and selfless husband, father, and friend
• A man who just doesn’t just believe in God, but who believes God Each of us may have a different process for committing to our likeness. But what is universal is that your intent must be to answer this question: who do I truly want to become?

If you begin to feel that the likeness you have sketched out for yourself is not right—that this is not the person you want to become—then you must revisit your likeness. But if it becomes clear that it is the person you want to become, then you must devote your life to becoming that person.

Finding the Right Metric

The third part of my life’s purpose was to understand the metric by which my life will be measured. For me, this took the longest. I didn’t come to understand that until about fifteen years after the experience at Oxford.

I was driving to work early one morning when I got a sudden and very strong impression that I was going to receive an important new assignment from my church, which has no professional clergy and asks every member to shoulder important duties. A couple of weeks later I learned that a particular church leader in the area was going to leave. I put two and two together and concluded that this was the opportunity that I received the impression about.

But that’s not what happened. I learned that another man was asked to serve in this position. I was just crushed—not because I had ever aspired to a hierarchical position, but because I always have aspired to play an important role in strengthening our church. Somehow I felt that if I had been given this role, I would have been in a position to do more good for more people than if I weren’t in the role.

This threw me into a two-month period of crisis; I had believed I could have done a very good job.

As has been so often the case in the most difficult parts of my life, this personal confusion precipitated an insight that became the third element of my purpose—the metric by which my life will be measured. I realized that, constrained by the capacities of our minds, we cannot always see the big picture.

In short, we need to aggregate to help us see the big picture. This is far from an accurate way to measure things, but this is the best that we can do.

Now let me explain in religious terms: I realized that God, in contrast to us, does not need the tools of statisticians or accountants. So far as I know, He has no organization charts. There is no need to aggregate anything beyond the level of an individual person in order to comprehend completely what is going on among humankind. His only measure of achievement is the individual.

Somehow, after all of this, I came to understand that while many of us might default to measuring our lives by summary statistics, such as number of people presided over, number of awards, or dollars accumulated in a bank, and so on, the only metrics that will truly matter to my life are the individuals whom I have been able to help, one by one, to become better people. When I have my interview with God, our conversation will focus on the individuals whose self-esteem I was able to strengthen, whose faith I was able to reinforce, and whose discomfort I was able to assuage—a doer of good, regardless of what assignment I had. These are the metrics that matter in measuring my life.