The book is divided in 4 priorities: People, Strategy, Execution, Cash

In dealing with PEOPLE: Establish few rules. Behave like a parent- repeat yourself a lot & act consistently with the rules. This will establish your core values.

Learn to delegate. Most entrepreneurs prefer to operate alone. Jokingly, I can say that most business owners would love their companies even more if they did not have to deal with employees or customers; It’s the idea-the dream- of their business that they love the most.

Letting go & trusting others to do things well is one of the challenging aspects of being  a leader in a growing company. The leader delegates but does not delegate the one thing that sets an example.

Are your people happy? Would you enthusiastically rehire everyone, knowing what you know today?

There is a little story about four people named Everybody, Somebody, Anybody & Nobody.

There was an important job to be done & Everybody was sure that Somebody would do it.

Anybody could have done it, but Nobody did it.

Somebody got angry about that because it was Everybody’s job.

Everybody thought that Anybody could do it, but Nobody realised that Everybody wouldn’t do it.

It ended up that Everybody blamed Somebody when Nobody did what Anybody could have done.

Teams sizes should follow the “two-pizza rule”- no team should be so big that it can’t be fed with 2 pizzas. Divide teams around projects, product-lines, customer segments, geographical locations etc.

The best managers are less concerned with motivating their people & more concerned about NOT demotivating them.

By defining the what & not the how, great companies give their employees the freedom to find their own way of achieving goals.

The only way to grow a company is to grow the people first. Great companies are actually “training companies.” One-on-one coaching is the best.

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In setting STRATEGY: This must pass two tests- what you are planning to do really matters to enough customers & second, it differentiates you from your competition.(A true differentiator can only be defined as something your competitor won’t do or can’t do without great effort or expense.)

Examples: Domino’s Pizza- delivered in 30 minutes or less, or it’s free.

Preservation & control of the Disney magic

To keep things flowing, an organisation needs a scalable structure (similar to the blood supply & nervous system). When you add more employees you need better phone/lan systems & more structured space. You will need information-flows like ERP.

Pricing is part of strategy.

A vision is a dream with a plan.

Build a predictable revenue & profit engine.

What word do you own in the minds of your targeted customers? (Volvo has safety; BMW has driving experience; one water bottle company has “enhanced waters)

Who are your core customers?

What is your brand promise guarantee?

What is your X-Factor?

What is your profit per X?

Define your core values.

Example of core values of a company:

  • Integrity is necessary
  • Think like a customer
  • Be quick, but don’t hurry
  • Employees are critical, respect them
  • Small details are huge
  • Take care of each other
  • Enjoy your job

Define your Mission (Substitute word may be Purpose) : What I make? For who I make? How I make? Examples: 3M- Innovation; Disney-Happiness; Starbucks- A third place between work & home.

Define (regularly) your core competence  (your strengths)(only for internal purposes). Three attributes define core competences:

  • It is not easy for competitors to imitate
  • It can be reused widely for many products  & markets
  • It must be of value to the customer

Dominate search engines.

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In driving EXECUTION: Set a handful of priorities (the fewer the better)

Create meeting rhythms. Pre-schedule meetings. Start at odd times like 11.20 am. People take this more seriously.

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In managing CASH: Don’t run out of it. Pay attention to every decision that affects cash.

Great companies by choice keep 3-10 times more cash reserves than their competitors. Many accounting departments are short-handed. Accounting is often under-appreciated. Most leaders don’t like accounts. Any data more than a week old is history & not useful for making fast decisions. Propriety companies should ensure that the salaries of partners are as per market value or else the PBT will be over or understated.

If you have not paid any taxes, you either have not created any wealth or you have cheated & both scenarios are bad.

Working without margins is stupid. Remember: Revenue is vanity, profit is sanity & cash is king.

Increasing margins is the best way to improve cash flow.

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Good concepts:

  • Most people overestimate what they can do in one year & underestimate what they can do on ten years.
  • Routine sets you free.
  • One management guru believes that the fundamental job of a leader is prediction.
  • Executives in great companies talk about their responsibility & not job titles.
  • Lean describes waste as anything that happens in a company that a customer would not want to pay for.
  • He who chases two rabbits catches neither.
  • Looking forward is great management. Looking backward is micromanagement.