23. Agree on the limits, rules, expectations, and consequences. These must be clearly established, agreed upon, understood, and enforced. Personal security is largely born of a sense of justice—knowing what is expected, what the limits, rules, and consequences are. Life can be thrown out of kilter with uncertain expectations, shifting limits, or arbitrary rules: one day this, the next day that. No wonder many grow up learning to depend only on their own ability to manipulate people and life. When life becomes a game to be manipulated, the only sin is getting caught.

In 10 succinct pages, Stephen R. Covey’s “30 Methods of Influence” contains some of the greatest wisdom I’ve ever read.

The methods fall into three categories: 1. Example: Who You Are and How You Act, modeling by doing (others see), 2. Relationship: Do you Understand and Care? (others feel), and 3. Instruction: What You Tell Me (others hear).

While I’ve posted a blog on the 30 Methods in their entirety, they are so powerful and have had such a profound impact upon my life and effectiveness that I am now posting them one by one, one each week. Profound thoughts are best if savored, wisdom is gained most thoroughly if absorbed over time.

The stories we choose to tell ourselves, the way we choose to interpret events, powerfully impacts our responses and our effectiveness.

It has been said that stress is not an event, but a chosen reaction to an event. We may have allowed habit to squeeze down the space between stimulus and response so much that our responses are on autopilot, so automatic that we think that is just the way it is and no other response is possible. But that is not so and we can reclaim our responses.

When I am working on reclaiming my response, reestablishing control, I like to think that there is somebody on the other side of the world who doesn’t give a hoot about this event. And if another person can react differently, then it is within my power to do so as well. All I am dealing with is a thought, a reaction, and thoughts can be changed, reactions can be chosen.

Michael Jordan was once asked if the stress of the game ever got to him, the pressure of a must-win playoff game or the expectation of making a game-winning shot at the buzzer. Jordan is supposed to have laughed and said, “No, not at all. You don’t understand. Those are the moments I live for, those moments are the reason I play the game. It is my opportunity to show the world what I can do.”

Now THAT is an incredible re-frame, an amazingly empowering way to choose to view the situation.

Equally powerful opportunities for re-framing, for choosing new ways to view situations, are available to us every day, every moment of our lives.

It is your life. Release your brakes, begin living fully alive and fully aware. Add to your toolbox of mental and emotional skills every day. The life you save may be your own.

One of my goals is to put “old heads on young shoulders,” in essence to convert knowledge into wisdom, to speed the emotional maturity process. Knowledge is to wisdom as fresh grapes are to fine wine.

I tell my students that much of what I will share with them they already know at some level; my task is to move that knowledge from the back corridors of their intellectual consciousness to the forefront of their emotional awareness so that it becomes a meaningful part of their daily lives.

If I can create that emotional connection, I will have succeeded. If I do not, I will have failed and failure is not an acceptable outcome. So I ask for their commitment to help us achieve this mutual goal.

I emphasize that I teach what I most want to learn, that if they emerge from our interactions with a deeper commitment to life-long learning then our time will have been well spent.

Often those of great intellectual prowess are tempted to disdain common sense as too plebeian to hold meaningful solutions to complex issues. I remind my students not to overlook the diligent practice of common sense, because common sense is rarely common practice. And the positive effect of its continuous application is often underestimated.

And over and over again I tell them: To know and not do, is to not know. It’s not what you know that counts. It’s what you DO with what you know!

In the final analysis, it’s performance that counts.

This is a classic from the NSC Blog archive. Originally posted October 19, 2007.

So often I’ve regretted the past and resolved to do better in the future. And then it occurs to me… forget promising to do better in the future, resolve to do better NOW. And don’t just resolve, go DO. Go do now!

The point of power is always in the present moment.

Every moment of life is an unrepeatable miracle. Use each moment to its utmost.

Closing quotes:

“Thinking is easy, acting is difficult, and to put one’s thoughts into action is the most difficult thing in the world.” — Johann Wolfgang von Goethe

“I have been impressed with the urgency of doing. Knowing is not enough; we must apply. Being willing is not enough; we must do.” — Leonardo da Vinci

“Don’t wait. The time will never be just right.” — Napoleon Hill

So, given all this, when a CEO actually confesses to a blunder or two, heck, three or four——well, we are in shock and don’t quite frankly know what to think or how to put it into perspective.

Case in point is the recent book “Facebook Effect,” by David Kirkpatrick, chronicling the story of, well, Facebook and Mark Zuckerberg, its founder. A reviewer in the Wall Street Journal (June 8, 2010) remarked that the author was fortunate since it appeared Zuckerberg was “generous with his time” and “honest about his mistakes.” The reviewer felt compelled to continue, “some anecdotes make you wonder how Mr. Zuckerberg still has a job.”

Wait! Zuckerberg has created an unprecedented cultural phenomenon, has a net worth easily over a billion dollars, his company continues to grow by leaps and bounds, and a reviewer in the nation’s major business newspaper wonders why he still has a job? Because he took a wrong turn here and there? Blew off steam now and then?

We are so used to seeing polished productions, staged and well rehearsed, scripted to the nth degree, that when someone pulls back the curtain and shows us the messy workings going on behind, well, we find it hard to comprehend. Truth is, most of the time, people behind the curtain are a lot like us, just pedaling as hard as they can, trying to make it all come out right.

All of us will be better off when we insist that we are given the unvarnished truth, unpolished facts, full transparency, including making “the rest of the story” part of every story.

22. Recognize and take time to teach. With differences come supreme teaching moments. But there’s a time to teach and a time not to teach. It’s time to teach when 1) people are not threatened (efforts to teach when people feel threatened will only increase resentment, so wait for or create a new situation in which the person feels more secure and receptive); 2) you’re not angry or frustrated, when you have feelings of affection, respect, and inward security; and 3) when the other person needs help and support (to rush in with success formulas when someone is emotionally low or fatigued or under a lot of pressure is comparable to trying to teach a drowning man to swim). Remember: We are teaching one thing or another all of the time, because we are constantly radiating what we are.

In 10 succinct pages, Covey’s “30 Methods of Influence” contains some of the greatest wisdom I’ve ever read.

The methods fall into three categories: 1. Example: Who You Are and How You Act, modeling by doing (others see), 2. Relationship: Do you Understand and Care? (others feel), and 3. Instruction: What You Tell Me (others hear).

While I’ve posted a blog on the 30 Methods in their entirety, they are so powerful and have had such a profound impact upon my life and effectiveness that I am now posting them one by one, one each week. Profound thoughts are best if savored, wisdom is gained most thoroughly if absorbed over time.

Diminishers underutilize people, leaving creativity and talent on the table. They view intelligence as a scarce item: “You won’t find high levels of brainpower everywhere, in everyone.” They tend to drive results primarily through their personal involvement and make decisions by consulting only a few trusted intimates.

On the other hand, Multipliers foster a culture of intelligence; employees don’t just feel smarter, they become smarter. Multipliers have a flexible view of intelligence: “Smarts are ever evolving and can be cultivated.” Multipliers don’t ask, “Is this person smart?” They ask, “How is this person smart?”

Multipliers recognize that “deep smarts” are manifested in countless ways so they focus on finding talent at all levels of the organization chart. Multipliers acknowledge people’s “native genius,” the things people instinctively do well, often without being asked, simply because it comes naturally to them.

Multipliers create an environment where it is safe for people to speak their thoughts in a constructive manner. Multipliers broadcast an intensity that demands high-level work. But they also have a high tolerance for mistakes, understand the importance of learning as an iterative process, thus creating the mental space in which people can blossom.

While working for a Multiplier may feel great, Multipliers aren’t feel-good types. They have a hard edge, they expect stellar performance, and they drive individuals to achieve extraordinary results.

Key traits that separate Multipliers and Diminishers are dominating vs. facilitating and holding on vs. letting go.

It takes faith and trust to let go; it also takes wisdom. Let go too soon and the baton can be dropped, hold on too long and capacity is diminished and potential lost. The challenge for the best of bosses is that the dropped baton usually can be clearly seen, while the opportunity cost of diminished capacity and stunted human growth requires vision to comprehend and value.

Leadership is the art of bringing out the best in people, sometimes potential even they don’t see themselves. At the same time, followers can facilitate the process by affirmatively committing to their leader that they are ready, mirroring a deep understanding of the desired result and the resources available. In doing so they can become 360-degree leaders and convincingly demonstrate their readiness to become higher-level leaders.

Closing quotes:

“A leader is best when people barely know he exists, when his work is done, his aim fulfilled, they will say: we did it ourselves.” – Lao Tzu, founder of Taoism, 600 BC-531 BC

“A good leader inspires people to have confidence in the leader, a great leader inspires people to have confidence in themselves.” – Unknown

“If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” – John Quincy Adams, 6th U.S. President

One fertile ground for miscommunication is the annual budget creation process. Budget setting can easily deteriorate into gamesmanship. One one hand, the field office sets an artificially high number knowing that it will be cut, and on the other, headquarters starts with an artificially low number knowing it will rise.

Much of this occurs because budgets are asked to fulfill many, often conflicting, roles:

- Forecasting: Budgets are a financial plan designed to predict many variables including production or sales or revenue levels, expenses or cash investment needs, and expected cash flow proceeds.

- Control: Often organizations operate on a “management by exception” basis, were budgets are kinds of tripwires to call management’s attention to variations from expected or predicted or historical norms.

- Aspiration: At times budgets are asked to be “stretch goals,” a form of raising the bar another level higher to spur effort.

Jack Welch touched on the pitfalls of the budgeting process in his book “Straight from the Gut.” I am indebted to him for much of what follows:

I tell my team members that I have three requirements for them in the financial plan:
1. Beat the competition (this should be the easiest).
2. Beat last year (difficulty varies according to economic circumstances).
3. Leave nothing major on the table.

The last–to leave no significant upside uncollected–is the most challenging. It requires the ability to adapt to changing circumstances, to have an in-depth understanding of the nuances and subtleties of the marketplace.

I tell my managers and my direct reports that I expect them to be able to look me in the eye at the end of each quarter, at the end of each operational cycle, and tell me they left nothing on the table. No excuses.

In many ways this may be a subjective standard and its effective deployment depends to a large degree on having a strong culture of excellence, integrity, and mutual respect. When those exist, it can be remarkably effective.

This is a classic from the NSC Blog archive. Originally posted December 3, 2007.

“Today, in our schools, the manual trades are given little honor. The egalitarian worry that has always attended tracking students into ‘college prep’ and ‘vocational ed’ is overlaid with another: the fear that acquiring a specific skill set means that one’s life is determined.” “…any high school principal who doesn’t claim as his goal one hundred percent college attendance is likely to be accused of harboring low expectations and run out of town by indigent parents. This indignation is hard to stand against, since it carries all the moral weight of egalitarianism. Yet it is also snobbish, since it evidently regards the trades as something ‘low’.”

My father was an engineer and when something broke, he taught me to take it apart and see if I could fix it. As a teenager, I was a “shade tree mechanic.” I replaced the rings and valves on my ancient MG Midget and replaced the brake shoes as well. My dad taught me basic plumbing and electrical, the kind of do-it-yourself skills that I grew up thinking all kids learned from their dads and every homeowner should know. That apprenticeship served me well in the first decade of my real estate business when I was a one man operation, bootstrapping for capital, and keeping costs down by doing a lot of my own maintenance work.

I have always believed no honest task was beneath the dignity of anyone. I am the chair of The Collier Companies, which owns and manages almost 10,000 apartments, and to this day I pick up litter when I am on site.

America would be well served to end its infatuation with “college degrees for all,” which has resulted in significant degree inflation. Instead, we should more deeply value and appreciate the training and education based on the practical know-how that keeps the vital infrastructure of our country operating. Once lost, the tacit knowledge that comes from years of hands-on experience and decades of tinkering will be difficult to recover.

Closing quotes:

“All labor that uplifts humanity has dignity and importance and should be undertaken with painstaking excellence. Any necessary work that pays an honest wage carries its own honor and dignity.” — Martin Luther King, Jr.

“We all do everything, share the work——there’s no room around here for someone to think they are above others. You’re expected to pitch in on whatever needs doing. Nothing is beneath your dignity. But on the other hand, nothing is beyond your reach.” — Frances Hesselbein, former CEO, Girls Scouts of America

“Let me tell you in 1980 a CEO made 40 times the average worker; today CEOs make about 400 times. This is wrong.” — Rep. Keith Ellison (D-MN)

“You are never safe”? That’s a downer.

“You are never safe” is a quotation on business success from an entrepreneur named Chris Mittelstaedt, CEO of FruitGuys, a $6 million company (Reader’s Digest, June/July 2010, p. 80; see ending comment*).

Asked what keeps him up at night, Mittelstaedt replied, “I am constantly questioning my judgment and decisions. Is the business stable? Are we capable of change? Are we responding to our customers?”

Asked what makes him an entrepreneur, he gave the classic entrepreneur’s answer: “… working harder than anyone else. Whatever the problem is, I always feel there has to be a solution and I will keep at it until I find it.”

It has been said that security can be a person’s worst enemy, as it can quickly lead to complacency. The very nature of an entrepreneur is that you are pushing the edge, always advancing. The minute you have conquered one mountain, you are setting your sights on another, even bigger mountain, one that will stretch and strain your talents, abilities, and resources. Anything less and you wouldn’t be an entrepreneur, you wouldn’t be the person who could have conquered the previous mountain.

Complete, total, perfect safety is an illusion, albeit a comforting one. Beware anyone who promises an outcome that is “100 percent guaranteed.”

Sometimes the riskiest thing we can do is seek an unreasonable, unattainable level of security. If nothing else, the opportunity costs are frequently too great. The road less traveled may hold more unknowns but also greater rewards.

* Reader’s Digest calls FruitGuys a “$6 million company,” but like so many publications it does not explain $6 million of what? As an accountant and person fond of accuracy, transparency, and the full story, I want to know. Six million dollars in profits? Net worth/market capitalization? Revenue? I generally presume revenue since it is often the biggest number that can be thrown out and, hey, this is America, we love to impress, we thrive on big numbers.

21. Avoid fight or flight, talk through differences. Many people either fight or flee when they disagree. Fighting takes many forms, ranging from violence and open expressions of anger and hate to subtle sarcasm, sharp answers, clever comebacks, belittling humor, judgments, and reactions. Fleeing also takes various forms. One is simply to withdraw, feeling sorry for oneself. Such sulking often feeds the fires of revenge and future retaliation. People also flee by growing cold and indifferent, by escaping involvement and responsibility.

In 10 succinct pages, Covey’s “30 Methods of Influence” contains some of the greatest wisdom I’ve ever read.

The methods fall into three categories: 1. Example: Who You Are and How You Act, modeling by doing (others see), 2. Relationship: Do you Understand and Care? (others feel), and 3. Instruction: What You Tell Me (others hear).

While I’ve posted a blog on the 30 Methods in their entirety, they are so powerful and have had such a profound impact upon my life and effectiveness that I am now posting them one by one, one each week. Profound thoughts are best if savored, wisdom is gained most thoroughly if absorbed over time.

How do you do stay on top of your game on those days (weeks? months? years?) when the challenges seem to come at you fast and furious? When you feel you are doing all the right things and yet the results are coming in and life is just not cooperating?

My personal secret is the mind game, being the best at the mind game. Focusing and directing my thoughts to maximize my energies and thus the positive impact on myself and those around me. Just like your body, to stay in top shape, your mind needs regular exercise, frequent visits to a mental gym, some brain aerobics, some cerebral yoga.

Inspirational and spiritual literature, books or CDs in the car, work wonders for me in clearing my mind of negative thoughts, doubts, and fears.

“Personal Power Through Awareness” by Sanaya Roman, is a short, easy to read book (196 pages, 16 stand alone chapters) that I found very instructive, very powerful. As with most sources of wisdom, not everything spoke to me. In my younger years, if I ran across something I disagreed with in a book I discounted the entire book. Now I simply read on and use what works for me and lay aside the rest.

Thoughts from “Personal Power Through Awareness”:

- You cannot grow without challenges.

- The more you dislike problems, the more you rebel against things not going your way, the longer your problems will stay with you.

- Your deepest truth is that you are beautiful, wise and powerful.

- You are not a victim. You deny your truth when you do not acknowledge your strength and choose to imagine yourself as helpless.

- Honoring your deepest truth is the greatest gift you can give to yourself and the world.

- Learn to recognize when you have picked up others’ energy and release it if it does not serve you.

- Talk of the qualities you aspire to as if you already have them.

- The mind can be trained to create calm and inner peace.

- If any area of your life is not working, one of your beliefs in that area needs to be changed.

Hedge funds are a case in point: Generally privately held, lightly regulated, often based offshore, and frequently dealing in lightly-traded securities and hard-to-price illiquid investments, they provide a Petri dish for human weakness, particularly when it comes time to divvy up the pie.

Case in point: “Pricing Tactics of Hedge Funds Put to Question,” in The Wall Street Journal on October 9, 2007, Heard on the Street. Seems that when it comes time to do the monthly valuations of the performance of the fund, “’Hedge fund managers purposefully avoid reporting losses by marking up the value of their portfolios,’ according to new academic research by Nicolas P.B. Bolton of Vanderbilt University and Veronika K. Pool of Indiana University.”

The naked pursuit of profit at all cost can quickly lead one down an unethical, if not immoral, path. Business must acknowledge the social contract, its obligations to the community as a whole if not as a direct legal obligation (for god only knows how the lawyers would twist that), then certainly as a heartfelt ethical and moral obligation, to be held accountable via the bully pulpit and the court of public opinion.

Ethics should be a required course in every business school and the goal of every economic enterprise should only be “principled profit.”

This is a classic from the NSC Blog archive. Originally posted October 22 , 2007.

“Yes, totally. I believe that sport—and life in general—is all about controlling your mind. It’s about thinking positively all the time—negative things can get you down. It’s hard because sometimes negative things happen and it’s difficult to not let them stick in your mind but if they keep sticking in your mind they will be there and they will have an effect upon your performance… You have to believe in yourself….” – A.P. McCoy, jockey

“Yes, you can certainly control your mind. You can go through barriers that you put in front of yourself—and the hardest one is controlling your mind. A lot of people fall down because they put their own barriers up around themselves. What you have to do is deconstruct those barriers and set yourself realistic goals. I’ve always been a big believer in goal setting. I write down my biggest goal on a piece of paper and then write maybe 20 smaller goals underneath. You then start chipping away until you reach that big goal.” – Scott Quinnel, rugby player

Closing Quote:
“You have to have the will and the skill but the will must be stronger than the skill.” — Muhammad Ali

Quite frank, sometimes to the extreme (if you are of gentle heart or sensitive soul, do not read the third from the last star point), and occasionally rambling, Dennis writes about the attributes required and the true cost of obtaining great wealth: obsession, compulsive work habits, high personal cost (read hard on family). This book lacks “Rich Dad, Poor Dad” sugar coating.

Some quasi-random points and bits of advice:

* You gotta really, really want to make money, more than you want to be happy if need be.

* Many paths can lead to riches, few in sunlight, most in ditches.

* The follow-through…is a thousand times more important than a “great idea.”

* If execution is perfect, it sometimes barely matters what the idea is. Just go do it.

* Money, it turns out, was exactly like sex. You thought of nothing else if you didn’t have it, and thought of other things if you did.

* Nearly all the great fortunes acquired by entrepreneurs arose because they had nothing to lose.

* Timing is very important, as much as talent.

* Regular, even obsessive, monitoring is the key.

* Be compulsively determined.

* Making money is a drug. Not the money itself. The making of the money is.

* Prompt decisions and orders, right or wrong, are far healthier than endless debate and prevarication.

* Ultimately, time is your most important resource.

* You may not necessarily want to be in a glamorous sector of any market, and they are often very crowded.

* How do you judge your own aptitude? Trial and error is the only way.

* Your credit rating is extremely precious. It is your reputation in business.

* While it may not look like it to you, too much…capital is seeking too few investment opportunities.

* Obtaining capital…is the worst part of the whole business of getting rich…(but) there is no avoiding it.

* Self-belief is priceless. Confront doubts by delivering.

* Delegate. Hire smarter people than you, and pay them very well, but keep ownership.

* Once you lose control of a business, then no bank, white knight, investor or new owner is likely to permit you to gain control again.

* Cash flow is the heartbeat of your company.

* If it flies, floats or fornicates, always rent it——it’s cheaper in the long run.

* J. Paul Getty: If you can actually count your money, you are not really a rich man.

* Conventional wisdom is often right. But when it is wrong, it can offer quite extraordinary opportunities.

(I ran across this book while flying British Airways. Many of these points are drawn from amazon.com reviews.)