Intentionally dedicate time to identifying and understanding major trends, as getting the main trend right is paramount for significant financial success in business. Failing to align with major trends means working against the current.
Maintain a profound curiosity and a student mindset throughout life, shamelessly asking for opinions and picking people’s brains, rather than assuming you know everything. This approach fosters continuous learning and helps identify trends that others might miss.
Invest time in understanding your own thought processes, including automatic thoughts, biases, and cognitive distortions, through self-reflection and potentially therapy (e.g., CBT, DBT, positive psychology). This helps you think more rationally, constructively, and accurately, which is crucial for business and life.
Avoid rigid business plans and thinking, as markets, economies, and life constantly change. Instead, remain flexible and adaptable to capitalize on new opportunities that arise, even if they deviate from initial plans.
Apply analytical thought and mathematical principles to business by carefully analyzing numbers, making order out of disorder, and reducing complex situations to their simplest, most elegant forms. This clarity helps identify patterns and relationships for better decision-making.
To achieve outsized financial returns, be contrarian and think differently from the mainstream. Conforming to popular opinion will only yield average results.
When you have high conviction and a deep understanding of complex, but organized, opportunities (even if they appear risky to others), be courageous and bet significantly on yourself and your ideas. This can lead to outsized returns.
When seeking to make a significant impact or solve problems, prioritize solutions related to people and technology, as these are consistently the two biggest ’needle movers’ and categories that drive substantial change.
Professionally, define success unequivocally by generating superlative shareholder returns, measured by share price performance against benchmarks in both relative and absolute terms. All other stakeholder considerations contribute to this ultimate report card.
Focus on achieving tremendous business growth, both organically (by taking market share from less well-managed competitors) and through strategic mergers and acquisitions, as this is the primary method for creating massive shareholder value.
Before engaging in M&A, thoroughly research and select an industry by evaluating its size, fragmentation, M&A potential, economies of scale, competitive advantages of being larger, technological readiness, and cultural fit for your business approach.
Be highly selective in acquisitions, ensuring each target company has a compelling strategic reason for purchase, benefits customers, improves the overall business, integrates well with existing assets, and aligns with your long-term vision.
Understand that the two primary levers for creating shareholder value through M&A are the spread between your cost of capital and the acquisition multiples you pay, and your ability to significantly improve the acquired businesses.
Recognize that successful M&A hinges on rigorous post-acquisition integration, not just the purchase itself. After selecting the right industry and companies at the right price, dedicate significant effort to combining them effectively.
Implement a strong appetite for standardization across acquired businesses, including ERP, HRIS, CRM, and internal social media systems. This creates a unified company culture, enables benchmarking, transparency, and efficient identification of synergies, avoiding fragmented ‘mishmash’ operations.
Begin the integration process the moment an agreement to acquire a company is made, and on closing day, immediately standardize everything possible while communicating extensively. This proactive approach ensures a smooth and effective transition.
In M&A, prioritize forming strong relationships with people from the outset to retain great talent. Simultaneously, identify weaker performers and exit them gracefully and generously to optimize the team.
For M&A diligence, conduct one-on-one interviews with top personnel, asking critical questions like, ‘If this were your money, would you buy this company, and what would you change/not change?’ This uncovers opportunities, blind spots, and strengths.
Empower Financial Planning & Analysis (FP&A) to translate ideas into numbers, forecasts, and probabilities, attaching realistic chances of success to projects. Implement constant, iterative daily budgeting to track progress against plans and ensure accountability.
Utilize FP&A to identify and adjust for ‘sandbagging’ (understating potential) or overconfidence in managers’ forecasts, using historical performance to predict future likelihoods. This ensures more accurate and realistic planning.
Senior executives must focus on two key responsibilities: allocating finite capital to its highest and best uses, and managing organizational time to ensure everyone focuses on high-impact activities that create massive shareholder value, guided by FP&A.
Even for highly inspiring and creative projects, always analyze the numbers to ensure they offer a good return on time and capital. Avoid over-investing in projects that, despite their appeal, lack strong financial justification.
Rely daily on FP&A to continuously track internal project performance and external commitments to investors. Proactively adjust strategies and communicate with stakeholders if performance significantly deviates from forecasts, whether above or below.
Regardless of capital-raising needs, maintain a relentless and rigorous focus on delivering promised financial and operating results, customer satisfaction, and employee satisfaction. This is a core duty of management, driven by conscious intention and a sense of honor.
Actively recruit individuals who are ‘raw capitalists’ and highly motivated by money for themselves and their families. Structure the company so their drive to earn more directly contributes to making money for shareholders, creating a win-win.
Design executive compensation plans with a significant equity component tied directly to Total Shareholder Return (TSR) relative to benchmarks like the S&P 500. Implement vesting schedules that heavily reward outperformance (e.g., top percentiles) and potentially withhold vesting for average or below-average returns, ensuring complete alignment with shareholder interests.
Implement compensation plans that financially reward employees, including frontline and mid-level management, for actively helping colleagues achieve their goals, fostering a collaborative ‘super organism’ culture.
Strive for complete alignment where both shareholders and employees win or lose together, ensuring neither group profits at the expense of the other. This fosters fairness and shared success.
Achieve the ‘golden mean’ by moving fast intelligently, without sacrificing quality; ideally, improving quality while increasing speed. This requires careful planning, engineering, and a deep understanding of inefficiencies to be removed.
In business, remain calm, cool, and collected when facing unplanned circumstances. The goal is to capitalize on these changes rather than being overwhelmed, using them to create value.
While leveraging research teams, also personally ‘roll up your sleeves’ and delve into the details of what you’re studying, such as how successful companies achieved growth. This hands-on approach provides deeper understanding and allows for more effective brain-picking.
Before asking probing questions, establish a safe and non-judgmental environment where individuals feel comfortable being vulnerable, sharing their true feelings, and taking off their ‘mask.’ This fosters genuine communication and openness.
In any relationship, personal or professional, give the other person 100% of your undivided attention, actively listening and focusing solely on them. This powerful technique makes the speaker feel valued and encourages openness.
Listen non-judgmentally, first seeking to understand and validate the other person’s perspective (‘joining’) before attempting to lead, dispute, or suggest alternative ways of thinking. This ensures the message is received and fosters trust.
Apply ’non-judgmental concentration’ by fully dedicating your consciousness to another person, not only understanding their thoughts but also empathizing with their underlying emotions. This deep engagement is valuable in various interactions.
Approach conversations with the goal of truly understanding another person’s perspective, seeing the world through their eyes without needing to agree or disagree. This deep empathy helps prevent miscommunication.
To run ’electric meetings’ where everyone leaves exhilarated and with actionable tasks, ensure all participants turn off devices and practice non-judgmental concentration on the single speaker, avoiding side conversations or talking over others.
As a leader, intentionally train yourself to see the good in people and express genuine appreciation and positive feedback first. Deliver constructive criticism or areas for improvement only after validating their strengths and contributions.
In performance reviews, always begin with sincere, specific, and concrete positive feedback, highlighting what you genuinely appreciate and admire about the person’s contributions, before addressing areas for improvement.
When conducting performance appraisals, aim for a balanced approach by having individuals identify three accomplishments they are proud of and three areas where they could have done better or plan to improve.
Structure meetings like an ‘Oreo cookie,’ starting with positive aspects, addressing negative or challenging topics in the middle, and always ending on a positive note. The meeting’s conclusion significantly impacts how participants feel afterward.
At the end of a challenging meeting, ask each participant to identify whose ‘star went up’ and why, recognizing specific contributions, elegant expressions, innovative thinking, or kind-hearted conflict resolution. This fosters positive regard and appreciation among team members.
At the end of long, intense meetings, have the team stand in a circle in silence for five minutes, looking at each person. Internally, think of reasons for respect, admiration, and gratitude, and genuinely wish each colleague great success. This practice fosters positive feelings and strengthens team bonds.
Intentionally cultivate a positive ’love vibe’ within the company, ensuring people feel good about themselves, their colleagues, the company, customers, and vendors. This requires conscious effort, intentionality, and skill to foster a harmonious and productive environment.
Supplement financial incentives with non-financial recognition programs, such as awards, trips, and ’employee of the month,’ to make people feel good and appreciated for going above and beyond.
Prioritize working with a trusted team with whom you’ve shared successes and challenges, as deep familiarity, mutual respect, and shared history enable seamless collaboration and a strong collective bond.
Target industries where you can introduce transformative elements, such as advanced technology, to significantly improve industry quality and gain a competitive advantage. Inspire others by sharing a clear vision for technological investment.
Personally, define success by maximizing the quality of relationships with family and friends. In limited time, intentionally create enriching experiences filled with love, positive vibes, and symbiotic support, where you help others and they help you.
Explore and integrate various mental wellness practices like meditation, self-hypnosis, mindfulness, positive psychology, and cognitive therapy. Customize these schools of thought to fit your own personality and background for optimal personal development.
Embrace and go with the reality of the present moment, whatever it may be, rather than resisting it. This mindset, likened to a musician embracing all sounds, helps you stay in tune with your current situation.
Develop the ability to be spontaneous and improvise in business, adapting to unexpected changes and ‘going with the flow’ rather than rigidly adhering to a plan. This flexibility allows you to capitalize on new opportunities.
Look for situations, like a ‘messed up’ organizational chart, that are inefficient or disorganized but are also ’easy to un-mess up.’ These represent significant opportunities to create value and profit.
Actively simplify complex systems, like organizational charts, because bad ideas and inefficiencies can hide in complexity. Simplicity, with clear KPIs and metrics, makes it difficult for flaws to remain hidden.
Adopt a ‘Zen Buddhist’ approach to debt, using a moderate amount of leverage (e.g., 1-2 turns of EBITDA) to optimize returns without excessive risk. Avoid too much debt, especially in volatile times, to maintain flexibility and prevent bankruptcy.
Actively manage leverage by either improving profits (increasing EBITDA) or paying down gross debt. This proactive approach helps maintain financial health and control risk.
Leverage your personal need for appreciation as a powerful motivator to serve others, such as investors, friends, and family. Aim to please them by delivering strong results, which in turn brings personal satisfaction and purpose.
Actively engage employees through surveys, town halls, and interviews, asking questions about how to win, what’s going wrong, what can be improved, and what’s working well. This yields a high return on time and capital by involving those closest to the work.
Encourage deep board engagement by allowing directors unrestricted access to any employee and all company data, including customer and employee surveys, good and bad. Invite them to operating reviews to ensure they are highly informed and can contribute effectively.
Avoid scripted, rehearsed board meetings that waste time; instead, ensure directors read materials beforehand and are deeply involved between meetings. During meetings, bring in diverse managers and employees for unscripted, spontaneous, and honest Q&A sessions with directors.
Instead of micromanaging board agendas, collaborate with lead directors and the CEO to identify key personnel to present. Distribute the proposed agenda to the entire board for input, allowing directors to shape the discussion and ask questions they deem most relevant.
Avoid using the term ‘committee’ due to its negative connotations of bureaucracy and slowness. Opt for alternative nomenclature to foster a more dynamic and efficient perception of group decision-making.
For big, impactful decisions requiring multiple disciplines, assemble a group of relevant C-level executives (e.g., COO, CFO, CHRO) to ensure all perspectives are considered. Avoid wasting their time on minor decisions.