Intellectual Capital/Stewart 71-74

72 The lesson of the perennial best-seller What Color Is Your Parachute? is that people know more than they realize--that over the years they develop huge repertoires of skill, information, and ways of working that they have internalized to the point of obliviousness. Identify them, name them, package them, and these hitherto tacit capabilities can be the basis of a new career.

73 W. Edward Deming proved that the cost of poor quality--inspections, rework, returns, etc.--greatly exceeds the cost of excellence, no one listened.

Tacit knowledge tends to be local as well as stubborn, because it is not found in manuals, books, databases, or files.

74 First is separating knowledge from noise, which can be done only by means of strategy. Intellectual capital doesn't exist without a purpose and point of view: My knowledge assets are not necessarily useful to you, nor are my company's.
Second, much intellectual capital is tacit--and tacit knowledge cannot be sold no matter how many sous someone is willing to fork over.

Survival is Not Enough/Godin 172-178

173 Companies (usually) respond to the enthusiasm and input of the newly acquired team by shutting them out. The alternative is to put talented new managers in charge.

176 When you expect success and organize entire systems around it, the delay is getting to market can actually diminish your chances of being successful.

177 Low-cost, rapid product development works because it incorporates the power of evolution as well as using fast feedback loops.

178 …excellent leaders help teach their employees to make smart choices.

178 Fast feedback loops are the tactic that will enable the zooming corporation. Fast feedback loops use technology to turn date into information and to give us early warnings of success (and failures).

GOOD TO GREAT/COLLINS 31-35

32 Ten out of eleven gtg CEO's came from inside the company, three of them by family inheritance. The comparison companies turned to outsiders with six times greater frequency--yet failed to produce sustained great results.

35 Level 5 leaders look out the window to apportion credit to factors outside themselves when things go well (and if they cannot find a specific person or event to give credit to, they credit good luck). At the same time, they look in the mirror to apportion responsibility, never blaming bad luck when things go poorly.

SUMMARY: THE TWO SIDES OF LEVEL 5 LEADERSHIP

PROFESSIONAL WILL
Creates superb results, a clear catalyst in the transition from gtg.
Demonstrates an unwavering resolve to do whatever must be done to produce the best long-term results, no matter how difficult.
Sets the standard of building an enduring great company; will settle for nothing less.
Looks in the mirror, not out the window, to apportion responsibility for poor results, never blaming other people, external factors, or bad luck.
PERSONAL HUMILITY
Demonstrates a compelling modesty, shunning public adulation; never boastful.
Acts with quiet, calm determination; relies principally on inspired standards, not inspiring charisma, to motivate.
Channels ambition into the company, not the self; sets up successors for even greater success in the next generation.
Looks out the window, not in the mirror, to apportion credit for the success of the company--to other people, external factors, and good luck.

The first category consists of people who could never in a million years bring themselves to subjugate their egoistic needs to the greater ambition of building something larger and more lasting than themselves.

The great irony is that the animus and personal ambition that often drive people to positions of power stand at odds with the humility required for Level 5 leadership. When you combine that irony with the fact that boards of directors frequently operate under the false belief that they need to hire a larger-than-life, egocentric leader to make an organization great, you can quickly see why Level 5 leaders rarely appear at the top of our institutions.

The Art of the Start/Kawasaki 90-92

91 Positioning against the leaders or standard ways of doing business can save lots of marketing, PR, promotion, and advertising dollars, so pick the gold standard.

By spending millions of dollars and years of effort to establish its brand, your competition has done you a terrific favor—all you have to do is positioned against it.

92 If you are serious about staying in touch with reality, these are the ten most important questions you can ask:
1. When is your product or service going to be ready for market?
2. What are your true, fully loaded costs of operations?
3. When will you run out of money?
4. How much of your sales pipeline is going to convert?
5. How much of your account receivables is collectible?
6. What can your competition’s product or service do that yours can’t?
7. Who are your nonperforming employees?
8. Are you doing all you can to maximize shareholder value?
9. What is your organization doing to change the world and make meaning?
10. How good are you as the leader of the organization

Survival is Not Enough/Godin 165-172

168 Part of the challenge of zooming is that it requires internal initiative to start and run the system and then continue initiative to create new variations. This doesn’t fit easily with the priority list of an already harried executive.

169 How do I get everyone in the company aligned, focused on the same tactics and willing to take risks in order to find success?

Find people who want to contribute, who read the right books and magazines, who are eager to make a difference. Offer them a chance to join a team that’s going to drive one process or another. And then get out of the way.

170 Don’t let the others hold you back.

171 You’re not stuck if you don’t want to be.

172 The easiest way to get to the runaway is to signal to zoomers that your company is a great place to work—and then to keep that promise by doing everything you can to hire zoomers.

Intellectual Capital/Stewart 67-71

68 GE/Jack Wech...We get 6% and 7% productivity increases routinely now, mostly because of 'small i' ideas...An idea is not necessarily a bio tech idea. That's the wrong view of what an idea is. An idea is an error-free billing system. An idea is taking a process that used to require six days to do and getting it done in one day. Everyone can contribute. Every single person.

69 The idea that knowledge can be slotted into a data-to-wisdom hierarchy is bogus, for the simple reason that one man's knowledge is another man's data.

70 Knowledge assets, like money or equipment exist and are worth cultivating only in the context of strategy.

71 First, there's the semi permanent body of knowledge, the expertise, that grows up around a task, a person, or an organization. The second kind of knowledge assets are tools that augment the body of knowledge, either by bringing in facts, data, information---call them what you will--or by delivering expertise and augmentation of others who need them when they need them, that is, leveraging them. Phone numbers are not intellectual capital; phone books are.

GOOD TO GREAT/COLLINS 27-31

28 The gtg leaders never wanted to become larger-than-life heroes. They never aspired to be put on a pedestal or become unreachable icons. They were seemingly ordinary people quietly producing extra ordinary results.

30 It is very important to grasp that Level 5 leadership is not just about humility and modesty. It is equally about ferocious resolve, an almost stoic determination to do whatever needs to be done to made the company great.

Level 5 leaders are fanatically driven, infected with an incurable need to produce results.

31...inspired standards. He could not stand mediocrity in any form and was utterly intolerant of anyone who would accept the idea that good is good enough.

The Art of the Start/Kawasaki 82-90

89 Don’t try to make money doing the things anyone can do. Make money from your magic:


1) What is the crucial “magic” that we’re creating?
2) Are customers buying from us because of the “parts” in our product or service—or because of how we integrate them to create a solution?
3) How can we tap into the efforts of other organizations to get market better, faster, and cheaper?
4) How many processes can we do well? Are there other organizations that can do them better for us?

90 …sell directly to customers. Once you’ve debugged your product or service and establish sales, use resellers to accelerate, expand, or supplement your efforts.

…utilize the existing brand awareness of the competition.

Survival is Not Enough/Godin 161-165

163 You learn to evolve your winning strategy so you can succeed at your new job.

164 In order to build a zooming organization, we need to deprogram ourselves.

165 The challenge is no longer for the company to figure out how to use people the best
possible way—instead, it’s up to the employee to find a great boss and figure out how to use the company the best possible way.

If you’re in a company that treats you like a serf, your first step ought to be to try to persuade your organization that zooming is a better strategy. If that fails, leave. Find a company that wants you to farm, to develop, to find better memes and to spread your own.

Every job you take, every project you lead and every person you interact with affects your career mDNA, building an asset you own, you control and you profit from.

…that this job is going to affect your opportunities and benefits at the next ten jobs you take.

Intellectual Capital/Stewart 63-67

66 ...the sum of an organization's patents, processes, employees' skills, technologies, information about customers and suppliers, and old-fashion experience...is an illustration, not a definition.

67 ...accumulated knowledge and know-how [that] is the source of innovation and regeneration; ability, skill, and expertise..embedded in human brains.

...knowledge that exists in an organization that can be used to create differential advantage.

...to account for intellectual capital more formally, to nurture its development more deliberately, and to invest it more wisely.

Intellectual material that has been formalized, captured, and leverage to produce a higher-valued asset.

Intelligence becomes an asset when some useful order is created out of free floating brainpower--that is, when it is give coherent form (a mailing list, a database, an agenda for a meeting, a description of a process); when it is captured in a way that allows it to be described, shared, and exploited; and when it can be deployed to do something that could not be done if it remained scattered around like so many coins in a gutter. Intellectual capital is packaged useful knowledge.

The Art of the Start/Kawasaki 74-82

80 Bootstrappable business model:
1) low up-front capital requirements
2) short (under a month) sales cycles
3) short (under a month) payment terms
4) recurring revenue
5) word-of-mouth advertising

81 Managing for cash flow, not profitability, isn’t a long-term practice, but until you are sitting on a pile of cash, it’s the way to go for a bootstrapper.

82 Bootstrappers don’t build top-down models. For them, top down = belly up! Instead, they build bottom-up models, starting with real-world variables.

Survival is Not Enough/Godin 157-161

158 When the posture of the company changes and the act of introducing a new idea is not big deal (because the act of canceling that idea is no big deal either), the number of ideas that get launch increase dramatically.

Responsibility comes with flexibility.

159 Establishing the status quo and then setting time frames to beat the status quo is the smart way to manage this evolutionary process. It’s not about waiting for a miracle. It’s about expecting an evolutionary solution that works.

161 The employee is the basic indivisible building block of the organization.

Truly talented individuals are worth more, because when they move from one organization to another, they bring more value with them.

Books and courses and public speaking all increase the value of you mDNA, as does the chance to lead projects, make sales, calls or learn a new skill on the job.

Intellectual Capital/Stewart 59-63

60 Most of the value of the company was human capital.

61 When a company is bought for more that its book value, that premium usually consists of intellectual assets--anticipated revenues from patents, customers relationships, brand equity, etc., plus a premium for obtaining management control.

...goodwill..accounts for more than half the purchase price.

63 The long-range goal is to extend the work of knowledge management into less defined, and more valuable areas of intellectual capital--"art and know-how," trade secrets and technical expertise.

...calculated that for most organizations the ratio of the value of intellectual capital to the value of physical and financial capital is between five-to-one and sixteen-to-one. The inevitable metaphor is the iceberg. Above the surface, the financial and physical resources, glittering in the sum, visible, sometimes even awesome. Beneath, unseen, something vastly larger, whose importance everyone recognizes but whose contours no one knows.

GOOD TO GREAT/COLLINS 20-27

21 Level 5 Leaders channel their ego needs away from themselves and into the larger goal of building a great company. It's not that Level 5 leaders have no ego or self-interest. Indeed, they are incredibly ambitious--but their ambition is first and foremost for the institution, not themselves.

22 The gtg executives were all cut from the same cloth. All the gtg companies had Level 5 leadership at the time of transition.

Level 5 leaders are a study in duality: modest and willful, humble and fearless.

25 Level 5 leaders: ambition first and foremost for the company and concern for its success rather than for one's own riches and personal renown.

27 gtg leaders didn't talk about themselves...they'd talk about the company and the contributions of other executives...

gtg leaders...quiet, humble, modest, reserved, shy, gracious, mild-mannered, self-effacing, understated, did not believe his own clippings.

The Art of the Start/Kawasaki 70-74

73 The worst thing to do is to write a deliberate plan and then stick to it simply because it is the plan.

74 Biz Plans…Arial font for headings and Palatino font for text are just fine.

Make plans stand out…First, have credible referral source bring it to the attention of the reader. Second, provide a list of customers the reader can call to discuss how much they need your product or service—or, even better, how much they are already using your product or service. Third, ensure the plan is infused with real-world knowledge about and experience with the market. Fourth, include diagrams and graphics to explain complex points.

The usefulness of a business plan rapidly declines after the first six month or so. At that point, your business plan will be deliberate: focusing on budgeting and forecasting with quick summarizations of goals (what) and strategies (how).

Survival is Not Enough/Godin 155-157

156 Alas, in tough times, it’s the new memes that are going to save the company, not the old ones.

Slack is the unallocated time in you working day. If a company ties its people as parts of the machine, there should be no unallocated time. Maximum efficiency occurs when everyone is busy all the time. But what does busy mean? If a group of knowledge workers have slack in their day, they’re more likely to farm more frequently, or to create the interpersonal connections that lead to new efficiencies.

If your company is nothing but a factory, then shouldn’t we be blaming the architect—the person who designed the system—not the cogs in the wheel?

157 Organizations are different. We provide our wizards and hunters the opportunity to develop the next generation of memes that will generate the huge profits we’ll need during the next cycle and the cycle after that one. There are two caveats: 1-Be obsessed with low overhead. 2-Don’t confuse a desire to zoom with a lack of responsibility.

Intellectual Capital/Stewart 55-59

56 When you have knowledge no one else has access to -- that's dynamite.

We manage the forms rather than the substance, which is like a viticulturist playing more attention to the bottle than to the wine.

57 The management of intellectual capital is likely a newly discovered still-unchanged ocean, and few executives understand its dimensions or how to navigate it.

58 In a knowledge based company...the accounting system doesn't capture anything really.

59 But time is simply a proxy for costs, and all costs tell nothing about the value of what an enterprise produces, and tell managers only a small part of what they need to know to run the business.

One reason people give intellectual capital short shrift is that they can't see the brain gain--the returns on their investment

GOOD TO GREAT/COLLINS 12-20

17 You can accomplish anything is life, provided that you do not mind who gets the credit. Harry S. Truman.

20 Hierarchy of Manager/Leaders

Level 1: Highly Capable Individuals...Makes productive contributions through talent, knowledge, skills, and good work habits.

Level 2: Contributing Team Member...Contributes individual capabilities to the achievement of group objectives and works effectively with others in the group setting.

Level 3: Competent Manager...Organizes people and resources toward effective and efficient pursuit of predetermined objectives.

Level 4: Effective Leader...Catalyzes commitment to and vigorous pursuit of a clear and compelling vision, stimulating higher performance standards.

Level 5: Level 5 Executive...Builds enduring greatness through a paradoxical blend of personal humility and professional will.

..."I never stopped trying to become qualified for the job"