Book Overview
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Some Highlights from Selected Chapters
Content is more important than form
- no official font, logo or template was used in this presentation
- a picture is worth a thousand words, except when it's not
Changes
Could you change when change really mattered?
• “If you look at people after coronary-artery bypass grafting two years later,
90% of them have not changed their lifestyle”
Dr. Edward Miller, the dean of the medical school and CEO of the hospital at Johns Hopkins University
Limited to change…
According to the theory of structural inertia, organizations are limited in their capacity to change because they’re selected – in
evolutionary terms – for their highly reproducible behaviours. Stability is rewarded, BUT THIS IS UNSTABLE WORLD – ask
Kodak,…
Larry Page said “There are basically no companies that have good slow decisions.”
…or obsessive change
Top management and their staff pride themselves on their bias for action. So, they introduce changes and initiatives to “make it
happen.”
Fear of missing out (FOMO) - Hype and trends can lead business leaders to invest based on perceptions of what others are doing,
rather than their own business strategy. Consequence example: In 2022, Google announced the shutdown of its consumer gaming
service called Stadia.
Why We Are Not Creative Enough
Creativity is about unleashing the potential of the mind to conceive new ideas.
• Ideas are common, yet game-changing concepts are rare.
• Possible only if you have non-alienated view for your life and environment
• Small corellation for working hours and productivity
• creative achievements result from modest “working” hours and much hiking mountains,
taking naps, going on walks with friends, or just sitting and thinking
We need loose management structure which cares about hiring and keeping bright people and
giving them only general directions without telling anyone what they should be working on.
Visions instead of goals, milestones instead of deadlines.
Cooperation is only possible if you have strong in-house expertise across disciplines.
• One might think that it is unprofitable to keep a highly skilled team of people for a long period of time,
because they certainly cannot report on their activities by the hour or even on a daily basis. Some of them
would rather leave than drown in micromanagement.
Avoid that sales and marketing people run the company (Steve Jobs explanation of why Xerox failed).
Innovations
Innovation is putting ideas to work. This requires persistence, a plan and engaged employees to succeed.
All innovation involves risk. Failure should never be seen as a black mark; it is a learning experience.
Leaders cannot demand innovation from others, they must demonstrate how to drive innovation through their
own personal stories.
Innovations must be aligned with all four pillars of sustainability: human, social, economic, and ecological.
• Example: Hyundai Ultrasonic Rear Warning Reminder (ROA) system that tracks movement inside the
vehicle after you have locked and left it. Each year tragedies occur when drivers inadvertently leave children
or pets in the back seats of vehicles. No more – if ROA detects movement in the back seats after the driver
has left the vehicle, it will sound the siren of the vehicle and send an alert to the driver’s smartphone.
If a company want to become a leader in a field, it must try to get involved early on. It is possible to catch up,
but this comes at tremendous costs. Early investment in emerging areas of research is a key driver of market
dominance.
According to Gartner, The IT industry is caught in a vortex of supervendors who claim that they can purchase
innovation. They claim this is superior to internal R&D. We believe this is not sustainable. Acquiring
innovation is one thing. Maintaining it is impossible. Users will not accept architectural mediocrity. This will
challenge the business models of supervendors.
Innovations
Innovation strategy goes beyond all-too-common generalities, such as “We must innovate to grow,”
“We innovate to create value,” or “We need to innovate to stay ahead of competitors.” For example, a
part of strategy could be that we dedicate 2% of sales revenue to innovation initiatives.
The ISO 56000 family of innovation management standards was created to help organizations capture
the best ideas and continually improve to keep up with the competition. But you couldn’t expect
innovations will appear as a final outcome of creativity by standardizing surrounding things and
processes.
Innovation by its nature can be very different. For example, we can have an innovation in the pricing
model. Steve Ballmer said: “I wish I’d thought about the model of subsidizing phones through the
operators. You know, people like to point to this quote where I said iPhones will never sell because
the price at $600 or $700 was too high. And there was business model innovation by Apple to get it
essentially built into the monthly cell phone bill.”
Innovations
Never be afraid to reach out to people beyond your skill set or industry niche to get a broader view and an
ingenious solution. Think tanks and mastermind groups are a brilliant way to access new ways of thinking.
Everyone brings something unique to the table and by getting involved you could reap the benefits. An
answer could lie in changed perspective brought by other people beyond your skill set or industry niche.
In WW2, mathematician Abraham Wald was given the task of reviewing the
bomber protection. He realised his data came from bombers that survived, but
the planes hit in undamaged areas did not return from their missions. The
armour, said Wald, goes on the engine. Wald saw what the officers, who had
vastly more knowledge and understanding of aerial combat, did not.
The crowdsourcing idea is that rather than relying on a few experts (perhaps your own employees) to
solve specific innovation problems, you open up the process to anyone (the crowd).
Onlyness
Anyone – without preapproval or vetting or criteria – can create and contribute. In fact, it is crucial that they
do. Research from 2013 conducted by Copenhagen Business School and Harvard University analyzed 166
science challenges involving 12,000 scientists and they concluded that novel ideas come from “marginality”
– a source of different perspectives and heuristics, play an important role in performance.
This idea inclusion – across ages, genders, geographies, cultures, sexual orientation, and all the other ways in
which new ways of thinking can manifest – is essential for solving new problems as well as integral in
finding new solutions to old problems. The element starts with celebrating each human and, more
specifically, something Nilofer Merchant recently termed “onlyness.”
That unique point of view is the genesis of new ideas, the ones that challenge the status quo, or improve upon
the existing condition. The more traditional formulation of the source of ideas was considered “talent”, but it
was often credential-dependent. We relied on gates to determine just whose ideas were worth considering as
valid contributions.
More and more companies embrace consumers as “co-creation” partners in their innovation efforts, instead of
as buyers at the end of a value chain.
Leadership
Taking care of the realization of planned goals and fast reacting on unplanned events. Leaders set
direction, build an inspiring vision, and create a space in which people will more easily accept new
beliefs and perform new behaviors.
A leader set direction, build an inspiring vision, influence, love, and has an integrity and charisma - the
ability to attract the attention and admiration of others.
• Jack Welch had charisma, but he could only inspire corporate psychopaths.
In most organizations today, senior executives want to be leaders. They talk about 'vision', 'belief' and
'authenticity' with great verve.
So, how many leaders do you think you know: 20, 2, or less?
Clichés and Decadence
Twenty years ago, nobody would have known what you were talking about:
• synergy, stakeholder, strategic, reaching out, moving forward, drilling down, data mining, pulse
check, value-add, fast track, road map, pain point, benchmark, dashboard, balanced scorecard, low-
hanging fruit …
What do you think about questionnaires with questions like this?
What do you find most meaningful about working here?
Our determination to go the extra mile internally or externally
Our efforts to bridge the digital divide
Working for a company that puts employees first
Our focus on providing value to our customers
Btw, putting people first means focusing on employee development more than product development.
Creating a Culture
A shared set of goals, values, beliefs, and practices that lay the foundation of an organization’s unique social
and psychological environment.
Henry Ford said, "You can take my factories, burn up my buildings, but give me my people and I'll build the
business right back again.„
Toxic corporate culture is 10 times more powerful than compensation in predicting a company’s attrition rate
A human-centered business approach - understanding why people do what they do. A meaningful work leads to
more engaged employees, who thrive and contribute to the well-being of the company in ways that transcend a
job description.
If employees’ ways of working together produce the desired results succeed over and over, consensus begins to
form. MIT’s Edgar Schein has described this process as the mechanism by which a culture is built.
Intelligent Company- a flattened organizational hierarchy with a free flow of information that enables the
permeation of ideas and the advancement of people. A collaborative environment shifts an organization toward
meritocracy, as opposed to a command-and-control structure. In essence, it is a multiplier effect for intelligence.
Watch out for Endofactors
Managers are no longer experts in the job, they have become a generic caste imposing themselves as superior leaders.
A boss’s technical competence is the single strongest predictor of a worker’s well-being.
Dunning-Kruger effect: "Unskilled persons tend to mistakenly assess their own abilities as being much more competent
than they actually are."
Theranos president and COO Sunny Balwani at one meeting didn’t hear “end effector,” which signifies the claws at the
end of a robotic arm, he heard “endofactor.” For the rest of the meeting, he kept referring to the fictional endofactors.
The way to solve this problem was described by Huawei's founder Ren Zhengfei, who said, "we’ve decided that our
managers should do administrative affairs and leave technology-related decisions to experts.„
As Steve Jobs would say, “It doesn't make sense to hire smart people and tell them what to do; we hire smart people so
they can tell us what to do.”
Fight against opportunism – it is motivated by self-interest and takes advantage of relevant knowledge asymmetry to
achieve own gains. Opportunism often leads to a criminal activities in which top management cheats by creating
schemes to hide or misrepresent what the firm does or how the firm does it.
Passion and Purpose
A passion is what gets you started, and a purpose is what keeps you going. People are often mistaken in the
belief that in order to be happy, they need to pursue their passion. It has been shown that to be happy, we
need to have a purpose in life. A passion without purpose leads to frustration.
Your purpose might be to help others or make a positive impact on the world. For example, you might want
to become a teacher, a doctor, or a social worker because you believe in the importance of education,
healthcare, or social justice.
The mission of SpaceX is to designs, manufactures, and launches the world’s most advanced rockets and
spacecraft. The purpose is to enable people to live on other planets. The common purpose goes beyond the
mission, it refers to the reason or motivation behind why we do it and often does not translate into day-to-
day activities. It should be the real underlying drive that gives your life meaning and direction, or
company’s deeper sense of fulfillment or contribution to the world. It shouldn’t be described with a series
of meaningless words.
People who find their individual purpose congruent with their jobs tend to get more meaning from their
roles, making them more productive and more likely to outperform their peers. People who have a strong
sense of purpose tend to be more resilient and exhibit better recovery from negative events.
Values
Values are internal and subjective, and they may change over time and thus producing different actions.
Everyone may have different values, for example, you might be highly religious or deeply non-religious.
One person will value happiness above all whereas another will value courage and dedication.
Shared values require cultural work to sustain. Problems arise when there are contradictions between
personal and cultural values.
Leaders have a set of values that set the standard for how they will attain their vision. These values are the
rules that go beyond just descriptive words, such as „integrity“ or „results orientation“. If you were Jack
Welch, you wouldn't talk about values or the human equation, your only duty would be to always enrich
your shareholders by reducing anything of value to a transaction.
The corporate values of Enron were integrity, honesty, innovation, communication, respect, etc. And as
events have shown, they’re not meaningful; they’re meaningless.
A Netflix value system are shown by who gets rewarded or let go and is based on the principle of “keeper
test”. They don’t have bell curves or rankings or quotas like “cut the bottom 10% every year”. Instead, they
focus on manager’s judgment through the “keeper test” for each of their people: if one of the members of
the team was thinking of leaving for another firm, would the manager try hard to keep them from leaving?
Is it worth dealing with all this?
There are more and more studies that suggests that there is indeed a correlation between
an employee's personal purpose and company success.
What happens if customer purpose/principles/values and company purpose/principles/values are
really shared? According to a study conducted in January 2021, 82% of people say they are
willing to pay more money to buy from companies whose purpose/principles/values align with
their own, with 43% of respondents willing to pay twice as much.
Nobel Prize winning Israeli-American psychologist Daniel Kahneman found that people would
rather do business with a person they like and trust rather than someone they don’t, even if that
that person is offering a better product at a lower price.
Gravity - Harvard Business School case study
Gravity Payments CEO Dan Price make a dramatic announcement to his 120-member staff. Over the next three
years, he will phase in a minimum wage of $70,000 at Gravity and immediately cut his own salary from $1.1
million to $70,000 to help fund it.
When he was interviewed on FOX News, he was laughed at and ridiculed. They said his business would fail and
accused him of being a socialist.
Six years later after the decision, the revenue has tripled, the customer base has doubled, 70% of his employees
have paid down debt, many bought homes for the first time.
And then came the COVID pandemic. In a short time, Gravity lost about half of its revenue, which mainly
comes from small businesses, hardest hit by the crisis.
Gravity adopted the solution proposed by the workers, with slight modifications. No employee’s salary was
reduced by more than half, and for those who earned less than $100,000, the maximum reduction was 30%. In
July, Price assessed that the company had returned to stability and announced that workers would get back the
amount deducted from their respective salaries.
Looking Beyond Profit
This example shows that a change of culture can be achieved through a top-down mandate only when the leader
develops desire in people and turns it into a long-standing passion of taking responsibility for achieving the
organization’s purpose — the “why we exist” question. The leader can’t do this if he himself does not have the
passion that drives him - authority can demand compliance, but can’t dictate optimism, trust, conviction,
or creativity.
When CBS News asked Dan Price what drives the corporate stock market today, he replied that it is corporate
greed to try to make most money they can as fast as possible.
But, paradoxically, having a purpose that looks beyond profit will often lead to an increase in profit. When a
business demonstrates a genuine purpose, consumers feel a connection to the brand and its products. They’ll
choose the authentically purposeful company’s product, even though it means paying more. It’s an opportunity
to move the needle on social challenges while creating economic value.
Social Awareness
If the industrial era was about building things, the social era is about connecting things, people, and ideas.
Instead of merely having a few meaningless words on a page, the next wave of purpose led businesses are
understanding the role of their business in society. We call this ‘social awareness.’
When you become socially aware, you are better able to empathize with others’ emotions, as well as the intent
behind their actions. You are also better able to understand your environment and recognize the factors that
influence people and impact outcomes.
This isn’t just corporate philanthropy or even traditional corporate social responsibility (CSR) that looks like an
effective marketing tool. This is about having an environmental or humanitarian mission woven into the fabric of
a business.
Every company in every industry needs to procure. We all need soap in our washrooms, landscaping for our
offices, food and drink in our cafeterias, marketing services, and office supplies. Why not source from suppliers
who are delivering certified social impact as well?
SAP were able to direct 2.5 percent of their addressable spend to social enterprises, including Change Please, a
coffee provider that reinvests its profits to train the homeless as professional baristas. The purchasing decisions
have a direct impact on improving lives and helping the environment.
Blockchain
A distributed decentralized transaction records organized in connected unchangeable blocks. Blockchain structure
makes data tamper-evident and verifiable, making it easy to implement multi-party business process, such as
supply chain systems, and can also streamline compliance audits.
The Mobility Open Blockchain Initiative (MOBI), a consortium that includes automakers like Ford, BMW, Honda,
and GM, has been working on a vehicle and parts tracking initiative. Its Vehicle Identity (VID) Standard initiative
provides “birth certificates” for vehicles, tracing maintenance history and vehicle registration even across borders
in a shared ledger. With a record of where parts have gone, from the supplier to the individual vehicle, blockchain
could enable targeted recalls.
Medical devices will be able to store the data generated on a healthcare blockchain and append it to personal
medical records. A key issue currently facing connected medical devices is the soloing of the data they generate —
but blockchain could be the link that bridges those silos.
By capturing votes as transactions through a Blockchain, governments and voters would have a verifiable audit
trail, ensuring no votes are changed or removed and no illegitimate votes are added.
LLMs Democratization
Fine-tuning is the further training of a previously trained model with a specific data set.
Instruction-tuning — fine-tuning with specific dataset of task instructions.
• More efficient - Instead of having to learn from vast amounts of general text, the model can learn more
quickly from a smaller, more focused set of training data.
• More affordable (e.g., LLaMA fine-tuned using LoRA runs on an M1 Mac or a lesser Nvidia
consumer GPU)
The danger of uncontrolled LLMs with incredible abilities that can be used by an
authoritarian regime, or an identity theft operation, or a spammer, or any number of other
devious individuals.
Activities that should be regulated and recorded in the blockchain:
• hash value of user created or LLM generated instructions
• every import hash value consisting of timestamp+instructions hash
Self-aware AI
According to Integrated Information Theory, any system exhibits consciousness if it possesses a high level of
integrated information. Current artificial neural networks are far below sufficiently high level of integrated
information to be considered conscious. To achieve this, a system would need much greater complexity and
organization, similar to the human brain.
None of our current theories of consciousness state can be considered definitively proven or universally accepted.
In the meantime, LLMs are beginning to acquire a surprising ability to solve problems for which they were not
trained (if it does not hallucinate).
In February 2023, an intriguing scientific paper by Michal Kosinski from Stanford appeared on arXiv called
Theory of Mind May Have Spontaneously Emerged in Large Language Models. The author hypothesize that ToM-
like ability does not have to be explicitly engineered into AI systems. Instead, it could emerge spontaneously as a
byproduct of AI being trained to achieve other goals.
Quantum Computing is Real
At the Port of Los Angeles QC solved cranes optimization problem is container shipping
choreography. Each crane did twice as many deliveries each day while dropping the distance
traveled by a third.
In 2018, Patrick Rebentrost and Seth Lloyd present quantum algorithm for portfolio
optimization and risk analysis. Given quantum access to the historical record of returns, the
algorithm determines the optimal risk return tradeoff curve and allows one to sample from the
optimal portfolio.
The Volkswagen team optimized traffic flow between the city centre and the Beijing airport.
The success of their initial quantum computing project served as a launchpad for Volkswagen to
explore a wide range of potential applications. Projects currently underway at Volkswagen
include the optimization of assembly lines at vehicle plants and addressing packing and
distribution logistics.
Thank you
