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Reading Notes: The Outsiders

Author:  William N Thorndike Jr

Format: Audible / Kindle

Subject:  Capital Allocation

Rating: 8/10

Summary:

The outsiders is an investigation into what makes a truly great CEO.  The Outsiders is written about eight exceptional CEOs.  These CEOs delivered returns that trounced the S&P500 over the long-term.  These CEOs are in many ways the polar opposite of the household name CEOs we think of today.   The book spends a significant time covering the importance of sound Capital Allocation strategies.

Useful Quotes:

  • CEOs need to do two things well to be successful:  run their operations efficiently and deploy the cash generated by those operations.
  • There are two basic types of resources that any CEO needs to allocate:  financial and human.
  • Stiritz “disdained the false precision of detailed financial models” and instead focused on a handful of key variables:  market growth, competition, potential operating improvements, and cash generation.
  • These CEOs “used leverage selectively, bought back a lot of stock, minimized taxes, ran decentralized organizations, and focused on cash flow over reported net income.”
  • Warren Buffett has proposed a simple test of capital allocation ability:  has a CEO created at least a dollar of value for every dollar of retained earnings over the course of his tenure?
  • Buffett believe the key to long term success is “temperament,” a willingness to be “fearful when others are greedy and greedy when they are fearful.”
  • Buffett upon finally closing Berkshire’s textile business: “Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.”
  • “It is impossible to produce superior performance unless you do something different.” – John Templeton
  • You are not wedded to a particular business or industry

 Capital Allocation Tool Kit

  • Raising Capital:
    1. Tap internal cash flow
    2. Issue debt
    3. Raise Equity
  • Deploying:
    1. Invest in existing operations
    2. Acquire other businesses
    3. Pay down debt
    4. Issue dividends
    5. Repurchase stock

 

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Reading Notes: Exceptional Selling

Author: Jeffrey Thull

Format: Audible / Kindle

Subject:  Sales

Rating: 7/10

I recently told my boss that if I had to do it again, I would have focused my early career in sales.  Great sales people are immensely valuable and incredibly hard to find.   A few weeks later, a member of our board of directors recommended I read Exceptional Selling.  In fact, he was even kind enough to send an electronic copy of the book directly to my Kindle.  But as usual, I opted for an Audible copy as well.

Thull’s research is based on some of the most successful salespeople in the world.  And one key point that stuck out to me is that the most successful salespeople in the world are comfortable talking about pricing.  Their comfort is driven by the understanding of the value they bring into collaborating with the customer in an effort to solve the customer’s problems.  Thull also spends a lot of time covering his four-step sales sequence: “Discover, diagnose, design and deliver.”

Side Note: Hat Tip to Mickey Miller for recommending this book.

Qualities of a good Diagnostic Sales Proposal:

  1. Contain no surprises (good or bad.)
  2. Will have the customer’s fingerprints all over it (uses language and terminology used by the customer.)
  3. Will Solicit feedback (which allows for fine-tuning before the final proposal.)
  4. Will be formally presented, in part by the customers own people.

Quotes:

  • We need to be professionally involved and emotionally detached from our customers.
  • The customer is the judge and the jury in the sell, but you are the expert, the guide.
  • Silence is a sign of wisdom.  It is okay to think.

The Value Triad:

  • Sources of Value
  • Uses of Value
  • Absence of Value

Key Thoughts:

  • When you’re feeling pressure, you’re doing something wrong.
  • Do not answer unasked question.
  • The initial contact with a prospective customer is the most critical.
  • Salespeople are guilty until proven innocent.
  • When in doubt, do the opposite of what a salesperson would do!
  • In absence of quality decision process, the decision will degenerate to the lowest common denominator: price.
  • Diagnosis is something you do with your customer, selling is something you do to your customer.
  • You can’t lose something you don’t have.
  • You are either part of your system or someone else’s.
  • Do Not allow the customer to self diagnose.
  • One opinion does not make a consensus.
  • People never say what they really mean at first.
  • You must always protect the customers self esteem.
  • Needs do not equal expectations.
  • You have competitors;  your customers have alternatives.
  • The purpose of a proposal is to reinforce decisions that have already been made.
  • When you are presenting on a piece of a larger solution, don’t confuse selling with installing.
  • Professionally involved, emotionally detached.
  • If you don’t have a cost of the problem, you don’t have a problem.
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Reading Notes: Secret Powers of Negotiating

Negotiation: discussion aimed at reaching an agreement.

Author:  Roger Dawson

Format: Kindle

Subject:  Negotiations

Rating: 8/10

Summary:

Negotiating is a big part business and everyday life, so I was eager to dive into the details of this book.  Dawson didn’t disappoint me in the least; this is a well written book.   The author intermixes a variety of negotiating tactics with real-life examples.  The chapters and tactics build upon one another in an easily understood manner.  Furthermore, the book does an excellent job of mapping out the negotiation process from beginning to ending.  Dawson also covers strategies for dealing with impasses, stalemates, mediation, and arbitration.

After reading this book, I truly believe that I am an above average negotiator.  As a matter of fact, I have also already used several of these tactics during negotiations in both my personal and professional life.  Lastly, I am completely confident that this book has already paid for itself many times over since I read it last fall.

What I liked Most About the Book:  I gained a ton of insight about the topic of negotiating, and it was an easy read.

Knowledge Nuggets:

  • Be Prepared to Walk Away
  • Never Offer to Split the Difference
  • Always ask for more than you expect to get.
  • Be a Reluctant Buyer or Seller
  • Flinch at Proposals
  • Refer to a Higher Authority
  • Use Bracketing
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Reading Notes: Getting Things Done

Author: David Allen

Format: Audible / Kindle

Narrated By: David Allen

Subject: Productivity

Rating: 8/10

Summary:

Getting Things Done has transformed the way I conduct my life, which really says a lot.  The book itself describes a system for dealing with the immense variety of activities, commitments, and projects we each struggle to juggle in our daily lives.  The system is built around 5 key steps: Capturing, Clarifying, Organizing, Reflecting, and Engaging.  The purpose of the system is to get all of your obligations out of your mind and into a known centralized location in the form of lists, which should allow you to have a “mind like water,” and more capable of being in the moment.  It should also allow you to have the ability to spend your time working on the activities that you can possibly complete in any given situation.  This system is a lot like Chess in the fact that it takes a moment to learn, and a lifetime to master.

In the three or so weeks since I started reading the book I have made the following progress:

  • My Physical In Box at work is habitually empty (this doesn’t mean I have completed all of the work and don’t have any pending action items.)
  • My Email In-Box is also habitually empty (see above.)
  • I have adopted contextual list-taking as a way of life.
  • Actively adopting checklist for repetitive activities in my life.
  • I have noticed an uptick in my productivity and less loose-ends across the full spectrum that is my life.
  • My mind wanders less when I am in meetings and having conversations.

That last bullet point is a substantial benefit.  Having said that, I found my mind constantly wandering to projects, ideas, and activities as I worked my way through the book because I found it very difficult to digest the information without trying to apply it to my life.  So that was a bit of a viscous cycle.  I will definitely keep a copy of this book for reference.

What I liked Most About the Book:  Seeing my empty In-Box, and the focus on defining the “Next Action.”

What I liked Least About the Book:  The information tends to become more and more repetitive as you read through the book.  All in all, Getting Things Done book reads much like a textbook which to be fair, it pretty much is.

Illustrates the Getting Things Done process.