The book of this month is “How Will You Measure Your Life?” by Clayton M. Christensen, James Allworth, and Karen Dillon. I was recommended this book at work, and I really enjoyed reading it. The authors cover a wide range of topics and concepts that can be applied to your career path, personal life, and various decision making processes. Christensen provides a wide range of examples to support his claims. How Will You Measure Your Life? is split up into three sections – 1. Finding Happiness In Your Career, 2. Finding Happiness In Your Relationships, 3. Staying Out Of Jail. In this blog post, I will talk about the wide range of topics covered within each of these sections. Let’s dive in.
Section I: Finding Happiness In Your Career
The authors address the question of whether you should plan something 5 years in advance, or take challenges as they come on? The short answer is that one needs to have a combination of both. The book goes over when to be deliberate (have a plan), emergent (open to the unexpected), and executive (implement strategy). The authors discuss various theories, factors, and strategies:
- Agency (incentive) Theory – The authors discuss the relationship between the business owners (shareholders) and the agents (management). The book goes over how financial incentives for executives are structures in order to align the management’s interest with that of the shareholders’. In order to better understand if the incentive theory would work, the authors dive into motivation theory i.e. understanding why people act/make decisions the way they do.
- Motivation (2 factor) Theory – The idea behind this theory is to understand how to get people to do something. The authors break this theory down into 2 factors : Hygiene factors, and Motivation factors. In other words, the authors are saying that individuals are motivated to make career decisions based on these 2 above mentioned factors. Hygiene factors include things such as status, compensation, job security, supervisors, etc. If these hygiene factors are not done right, they can cause individuals to be dissatisfied with their jobs. On the other hand, motivation factors include challenging work, responsibility, recognition, personal growth, etc. Motivation factors cause individuals to love their jobs because these factors are the intrinsic conditions of work, which make individuals feel that they are making meaningful contributions.
- Deliberate and Emergent Strategies – Deliberate strategy is to go after anticipated opportunities. Emergent strategy is to go after unanticipated opportunities i.e. pivot and go after opportunities that arise while you are executing your deliberate strategy. The authors provide example of how Honda was unsuccessful at selling motorcycles in the United States, however they noticed how people liked their smaller bikes. This lead Honda to pursue an unanticipated opportunity of selling smaller bikes, and eventually establish the strong presence of “super cub” bikes in the United States. Similarly, Walmart had to ditch its deliberate strategy of building large stores in large cities; instead, the emergent strategy was to open large stores in small towns. The authors discuss the importance to have a combination of both deliberate and emergent strategies.
- Paradox of Resource Allocation – The authors provide examples of misaligned incentives. The book goes over how even within a company, salesmen are incentivized differently than the CEO. The CEO might be focused on the right long term decision, whereas the salesman, who is incentivized by commissions, might be focused on the short term decisions that would be detrimental to the company in the long run. The authors recommend to watch where the resources flow. If the resources aren’t flowing into the strategy that you have decided upon, then you aren’t implementing the strategy at all.
Section II. Finding Happiness In Your Relationships
In this section, the authors start off with business cases, and then tie each concept back to personal life and relationships. The book goes over parent-children relationships, family values, culture, and full versus marginal thinking.
- The Ticking Clock – The authors discuss Motorola’s failed attempt to profit from its iridium satellite phone project. The example provided the secret to failure i.e. when a company invests to see a business/project grow big quickly and then later down the line, tries to figure out how to make the venture profitable. The authors tie this concept to the relationship between parents and infants/children. They show how parent’s mentality to spend more time with kids when their kids grow older is flawed, since majority of the kid’s cognitive development happens before the age of 3; authors talk about language dancing – the amount of time spent talking with a kid before age 3 will determine the kid’s success later in life. In conclusion, the writers discuss 2 forces that work against families:
1. Individuals are routinely tempted to invest resources elsewhere (invest time and energy in things that give immediate pay-off).
2. Family and friends rarely shout the loudest for attention as they love you and want to support your career – leading to you neglecting them.
- Resources, Processes, and Priorities – The authors start off this concept with talking about Dell and Asus; how Dell started outsourcing everything to Asus, and come 2005, all Dell was left with its name and a competitor (Asus) who knew everything about Dell’s operations. The book points out that a company’s priority must be in sync with how the company makes money, and employees must prioritize those things that support the company’s strategy (i.e. don’t outsource core business just to cut costs) despite the available resources. The authors tie this “priority concept” to priorities associated with child development. They talk about how there are abundant resources and processes available, but it is up to the parent to prioritize what’s important; Authors discuss how self esteem among individuals comes from achieving something that’s hard to do (not from abundant resources, participation). So, parents need to challenge their kids, and not coddle them.
- Culture – Culture is a unique combination of processes and priorities within an organization. A culture is not developed by visible elements of working environments (such as free soda at work, casual dressing, free lunch, etc.) as there are just artifacts. A culture is developed around how the employees go about solving problems, working together, implementing ideas, reflecting back on results, and creating a self-managing loop. The authors provide example of Pixar’s culture, whose priority of high quality original films has led to its success in movie making. On the other hand, Enron did not live it’s vision and value statement – Respect, Integrity, Communication, and Excellence. So, Enron’s culture was never formed around these values, which led to its eventual downfall. The authors tie the concept of company culture to family culture. It is important not to allow culture of laziness or defiance to creep into the family.
Section III. Staying Out Of Jail
This was a short, yet important, section of the book. The authors introduce the “Just This Once” concept, and the full versus marginal thinking.
- Marginal Thinking – The authors provide various examples of how the “Just This Once” thought process leads to failure. Making exceptions to your values, even once, can derail your life or company. Marginal costs can add up, and take down an entire organization.
- Full Versus Marginal Thinking – Authors talk about traps of marginal thinking by providing examples of Blockbuster – Netflix, and Nucor – US Steel. Blockbuster was too focused on its existing business that it totally disregarded Netflix’s business model at its infancy. Rather than focusing on how to best serve its customers, Blockbuster pursued with its marginal thinking of how to make the best with what’s on hand. Needless to say that failure is always at the end of marginal thinking. Similarly, the CFO of US Steel was a victim of marginal thinking when US Steel tried to replicate the mini mills idea, which made Nucor successful. Authors show how when a company is new to the industry, the full cost is the same as marginal cost. However, a large, established company tries to leverage the marginal costs instead of allocating all the capital to overhaul its infrastructure, resources, etc. As Henry Ford said, “If you need a machine and don’t buy it, you will ultimately find that you have paid for it and don’t have it.” So, in order for companies to succeed, they need to look at the bigger picture and be willing to step outside their comfort zone.
In conclusion, the authors discuss the 3 parts of life’s purpose: 1. Likeness (person you want to become), 2. Deep commitment, 3. Metrics (measure and calibrate work). Overall, I found this book very interesting. It had good examples, research, and I liked how the authors tied success and failures of companies with personal life experiences. I would recommend this 240 page read (5.5 hour audio book) to anyone who wants to be aware of traps that can propel you towards failure.
Hope you learned a little and found this blog post helpful. We reviewed and summarized the key takeaways from the book – How Will You Measure Your Life? by Clayton M. Christensen, James Allworth, and Karen Dillon. As always, you can sign up for our free mailing list here. You can sign up for our paid subscription services here. Like us on our Facebook page here. Thank you!
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