Set Goals And OKRs That Actually Move

Who it is for

You are building a real capability: Set Strategy And Build Durable, Measurable Advantage.

Challenges

• In practice · Business Performance and Superior Profitability erodes when it is left to instinct instead of method.
• For the reader · You were taught the moves piecemeal, never the whole model.

Starting out

Foundational

Proficient

Expert

Beneath the model sits the practical spine — 101 named, end-to-end processes the source books lay out. Here they are, in sequence, each broken into the steps you actually run.

The sequence — high level first

1. 1

   Register the initial claim notification from the customer.

2. 2

   Apply a predictive model to forecast the likely duration of the handling process and recommend the next best step.

3. 3

   Route the claim based on the skill level required for processing.

4. 4

   Score the claim for fraud likelihood; if high, route to a special investigations unit (SIU).

5. 5

   Fast-track low-risk, simple claims for immediate resolution and payment.

6. 6

   For complex claims, assess damage and liability, gathering additional information as recommended by an analytical model.

7. 7

   Determine the final payment amount.

8. 8

   Use a recommendation engine to identify and suggest cross-selling opportunities to the satisfied customer during or after payment.

1. 1

   Define the specific decision that needs to be made.

2. 2

   Determine the method for making the decision (e.g., unilateral, consultative, majority vote, consensus).

3. 3

   Establish the governance for the decision using RACI (define who is Responsible, Accountable, Consulted, and Informed).

4. 4

   Make the decision using the chosen method and governance structure.

5. 5

   Communicate and implement the decision.

1. 1

   Plan: Define metrics and priorities based on strategic questions like 'What happened?', 'Why did it happen?', and 'What should happen?'.

2. 2

   Build: Develop the analytical tools, models, and data infrastructure required.

3. 3

   Test: Pilot the new capabilities and metrics to validate their effectiveness.

4. 4

   Launch: Roll out the tools and training to business operators (e.g., store managers).

5. 5

   Learn: Gather feedback and measure outcomes to identify what's working and what's not.

6. 6

   Refine: Use the learnings to refine the models and plan the next iteration of improvements.

1. 1

   Engage in mental exercises to 'write off' possessions, imagining they are already lost to reduce the sting of actual loss.

2. 2

   Practice 'negative visualization' by assuming the worst possible thing has already happened each morning, making the rest of the day a bonus.

3. 3

   Periodically practice voluntary hardship, such as traveling with minimal belongings or fasting, to build resilience to discomfort and fortune's whims.

4. 4

   Focus on accumulating what cannot be taken away: virtue, good deeds, and knowledge.

1. 1

   Engage in a high number of small, low-cost, independent experiments or trials.

2. 2

   Cap the downside of each trial, ensuring the maximum possible loss is known, small, and survivable.

3. 3

   Observe the outcomes of all trials without narrative-driven bias.

4. 4

   Exercise rationality by identifying any trial that produces a disproportionately large positive outcome.

5. 5

   Aggressively exploit the positive outcome, dropping all other experiments.

6. 6

   Repeat the process, using the new success as a baseline for further tinkering.

1. 1

   Get your head right. As CEO, you must focus on the future of the company, not become overwhelmed by the failure that led to the layoff.

2. 2

   Don't delay. Execute the layoff as quickly as possible after the decision is made to prevent rumors and anxiety.

3. 3

   Be clear in your mind about the reason. The layoff is due to a company failure to hit its plan, not individual performance issues. This message is critical.

4. 4

   Train your managers. Managers must lay off their own people. Train them to be clear that the decision is final, to explain it's a company failure, and to be prepared with details on severance and benefits.

5. 5

   Address the entire company. The CEO must deliver a message to the entire company before the layoff is executed, framing the context. Remember the message is for the people who are staying.

6. 6

   Be visible and present. After the announcement, the CEO must be available and talk to people, both those leaving and those staying, to show that you care.

1. 1

   Know what you want. Act in the role yourself for a period to understand its challenges and needs. Interview external domain experts to learn what greatness looks like. Write down the specific strengths you need.

2. 2

   Run a process to find the right match. Write down questions that test for your desired criteria. Assemble an interview team of people who can assess the candidate and people whose buy-in you'll need. Conduct rigorous front-door and backdoor reference checks against your criteria.

3. 3

   Make a lonely decision. The CEO must make the final call alone, synthesizing all inputs. Do not default to consensus, as it often optimizes for lack of weakness rather than critical strengths.

1. 1

   Conduct a root cause analysis. Figure out *why* you hired the wrong person. Was the position poorly defined? Did you hire for lack of weakness? You must see it as a system failure, not just an individual failure.

2. 2

   Inform the board. In individual calls, get the board's support, explain the root cause and your remedy, get approval for the severance package, and preserve the fired executive's reputation.

3. 3

   Prepare for the conversation. Script what you will say. Be clear on the reasons. Use decisive language ('I have decided'). Have the severance package approved and ready to present.

4. 4

   Prepare the company communication. Inform the executive's direct reports first, then your staff, then the rest of the company, all on the same day. Have a plan for who will run the department in the interim (usually the CEO).

1. 1

   Hire people with the right kind of ambition (ambition for the company's success, with their own success as a byproduct).

2. 2

   Build strict processes for politically sensitive areas and do not deviate.

3. 3

   For performance and compensation, run a formal, regular, company-wide process. Do not entertain ad-hoc, off-cycle raise requests.

4. 4

   For organizational design and territory, evaluate changes privately and execute them swiftly. Do not signal your thinking or invite lobbying.

5. 5

   For promotions, create a formal, visible, and defensible process, ideally with a cross-functional promotion council, to ensure leveling and fairness.

6. 6

   Manage inter-executive conflict directly. For behavioral complaints, get both parties in a room together. For competency complaints, immediately stop the conversation to avoid bias, and then launch your own investigation.

1. 1

   Create a master list of every property in the city.

2. 2

   Integrate datasets from various agencies, including tax delinquency, foreclosures, utility usage, crime rates, and ambulance visits.

3. 3

   Harmonize messy location data from different systems into a single coordinate-based identifier.

4. 4

   Compare the aggregated property data against five years of fire data to find correlations with severe incidents.

5. 5

   Build a predictive model to score and rank all incoming illegal-conversion complaints by fire risk.

6. 6

   Provide the top 5% of high-risk complaints to inspectors for immediate follow-up.

1. 1

   Collect a massive dataset of historical ticket price observations for specific flight routes.

2. 2

   Analyze all price observations for a given route relative to the number of days before departure.

3. 3

   Calculate the probability of the price increasing or decreasing based on historical patterns.

4. 4

   Recommend 'buy now' if the price is likely to increase, or 'wait' if the price is likely to decrease.

5. 5

   Present a confidence score for the prediction to the user.

1. 1

   Collect a large repository of old, dusty ship logbooks previously considered rubbish.

2. 2

   Extract and tabulate key data points: wind, water, and weather at specific locations on specific dates.

3. 3

   Aggregate the data, dividing the ocean into five-degree blocks of longitude and latitude.

4. 4

   Analyze the aggregated data for each block by month to identify patterns in currents and winds.

5. 5

   Create standardized forms and incentivize merchant captains to log and submit new data in exchange for the new charts.

6. 6

   Incorporate new data streams, such as notes in bottles, to continually refine the charts.

1. 1

   Scale the 'Family' (1-9 employees): The founder personally does everything, focusing on product/market fit with a team of generalists where communication is informal.

2. 2

   Scale the 'Tribe' (10s of employees): The founder transitions to managing the people who do the work. The focus shifts to building out a single functional product and team.

3. 3

   Scale the 'Village' (100s of employees): The founder designs the organization, hiring executives to manage managers. The company begins specializing roles and formalizing communication.

4. 4

   Scale the 'City' (1000s of employees): The founder makes high-level strategic decisions. The organization becomes multi-threaded, launching new product lines and business units to maintain growth.

5. 5

   Scale the 'Nation' (10,000s of employees): The founder focuses on scaling new business lines and transitioning mature ones away from blitzscaling. Defense, M&A, and managing a complex global organization become primary.

6. 6

   Repeat the cycle for new business units to maintain the company's overall growth trajectory.

1. 1

   Conduct a 'Visual Awakening' by having teams draw the 'as-is' strategy canvas of your business compared to competitors to reach a common understanding of the current position.

2. 2

   Engage in 'Visual Exploration' by sending teams into the field to observe how customers and noncustomers use products and services, exploring the six paths to create blue oceans.

3. 3

   Hold a 'Visual Strategy Fair' where teams present multiple 'to-be' strategy canvases to senior managers and external constituents, gathering feedback on which potential strategies are most compelling.

4. 4

   Implement 'Visual Communication' by distributing a one-page picture showing the 'before' and 'after' strategic profiles to all employees, creating a clear reference point for all strategic decisions.

1. 1

   Assess if the idea offers exceptional 'Buyer Utility' by using the Buyer Utility Map to see if it removes major pain points for customers.

2. 2

   Set a 'Strategic Price' that is accessible to the target mass of buyers by analyzing the price points of alternatives and substitutes using the Price Corridor of the Target Mass tool.

3. 3

   Determine the 'Target Cost' by subtracting the desired profit margin from the strategic price, and identify ways to meet this cost through streamlining, partnering, or pricing innovation.

4. 4

   Address 'Adoption Hurdles' by identifying and planning to overcome potential resistance from employees, business partners, and the general public.

1. 1

   Conduct strategic studies to identify a market gap (Ford owners trading up to GM cars).

2. 2

   Form a dedicated committee (Forward Product Planning Committee) to forecast market trends and justify the project.

3. 3

   Create a special division (Special Products Division) to oversee the new car's development.

4. 4

   Design the car's styling based on committee hunches and aesthetic goals, not consumer polling.

5. 5

   Conduct extensive motivational research (the Columbia University studies) to define a target 'personality' for the car, but only for advertising purposes.

6. 6

   Engage in a massive, fraught, and ultimately discarded process to scientifically select a name (culminating in the choice of 'Edsel' by executive fiat).

7. 7

   Recruit a completely new and exclusive dealer network, often by raiding competitors.

8. 8

   Build public anticipation through a prolonged and dramatic 'strip tease' advertising campaign, revealing only glimpses of the car.

9. 9

   Launch the car with tremendous nationwide fanfare on a designated 'E-Day'.

10. 10

    Discover the product is plagued with quality control issues and does not meet public expectations.

11. 11

    Attempt to revive sales with frantic advertising shifts and bonuses, before ultimately discontinuing the car.

1. 1

   Identify a stock that is being heavily sold short by 'bears'.

2. 2

   Secure a massive line of credit to finance large-scale stock purchases.

3. 3

   Systematically and secretly buy up the 'floating supply' of the target stock, along with as many privately held shares as possible.

4. 4

   Run a public relations campaign to build confidence in the stock and attract public buyers.

5. 5

   Devise a method (like an installment plan with delayed certificate delivery) to sell some accumulated shares to the public without returning them to the floating supply, thus locking them up.

6. 6

   Once nearly all available stock is controlled, 'call' for the short sellers to deliver the borrowed shares by a specific deadline.

7. 7

   As the cornered shorts scramble to buy the non-existent supply, driving the price sky-high, offer to sell them shares at an exorbitant, dictated price.

8. 8

   Settle with the cornered shorts and collect profits.

1. 1

   Detect severe currency weakness through market monitoring and direct communication between central banks.

2. 2

   Attempt conventional defenses, such as raising the bank interest rate to attract foreign capital.

3. 3

   When conventional defenses fail and a crisis is imminent, initiate emergency consultations between the heads of major central banks via telephone.

4. 4

   The central bank of the strongest currency (the US Fed) takes the lead in coordinating pledges for a massive credit package.

5. 5

   Key leaders (e.g., Hayes and Lord Cromer) personally call their counterparts to explain the gravity of the situation and request specific, unprecedentedly large credit commitments.

6. 6

   Secure commitments rapidly, overcoming procedural delays and national interests by stressing the systemic risk to all.

7. 7

   Once a sufficiently large credit package (e.g., $3 billion) is assembled, prepare a coordinated, simultaneous public announcement to maximize psychological impact.

8. 8

   Release the announcement during trading hours to dramatically reverse market sentiment.

9. 9

   Use the new credit facility to aggressively buy the embattled currency in the market, 'squeezing' the short-sellers and forcing them to cover their positions, driving the price up.

1. 1

   Identify and define the decision variables that represent the choices to be made (e.g., number of products to make, location to build).

2. 2

   Formulate the objective function as a mathematical expression to be maximized or minimized (e.g., MAX = 50*x1 + 100*x2).

3. 3

   Formulate the constraints as mathematical inequalities or equalities that represent limitations on resources or operational rules (e.g., 4*x1 + 2*x2 <= 100).

4. 4

   Code the mathematical model using specialized software like LINGO.

5. 5

   Solve the model to obtain the optimal values for the decision variables and the objective function.

6. 6

   Analyze the solution report, including values for slack, dual prices, and reduced costs, to understand sensitivities and resource values.

1. 1

   Identify and listen to people who are looking to hire someone with your skillset.

2. 2

   Find their questions and pain points in online forums, social media, or networking events.

3. 3

   Offer to help with their questions for free, in small doses (e.g., a 15-minute call, an email with advice).

4. 4

   Do not pitch your services; focus only on being helpful and solving a small part of their problem.

5. 5

   Repeat this process with many potential customers to spot trends and build a network of people you've helped.

6. 6

   Use the insights to refine your service offering to perfectly match the market's needs.

7. 7

   Allow the goodwill and reciprocity you've built to generate your first inbound client requests.

1. 1

   Define the simplest version of your product that solves one core problem effectively.

2. 2

   Launch this minimum version quickly to start generating cash flow and collecting customer feedback.

3. 3

   Listen intensely to early adopters: what they like, what's missing, and what's confusing.

4. 4

   Analyze sales data, usage metrics, and support requests to identify patterns.

5. 5

   Prioritize feedback and plan the next 'tiny step' for iteration (e.g., a new feature, a design improvement).

6. 6

   Develop and launch the improved version.

7. 7

   Repeat the measure-and-iterate cycle continuously.

1. 1

   Ensure the product and customer service are exceptional, as this is the foundation.

2. 2

   Follow up with customers a set time after purchase to check on their success and satisfaction.

3. 3

   Directly ask satisfied customers if they would be willing to provide a referral or testimonial.

4. 4

   Implement an incentive program, ideally a double-sided one where both the referrer and the new customer benefit.

5. 5

   Provide pre-written copy and easy-to-use sharing links (e.g., for social media, email) to reduce friction.

6. 6

   Automate the initial follow-up and request using email marketing software, segmenting based on customer satisfaction scores if possible.

1. 1

   Ensure foundational prerequisites are in place: some quality data and executives predisposed to fact-based decisions.

2. 2

   Assess the organization's current analytical capabilities across all dimensions (e.g., using the DELTA model) to determine its stage of maturity.

3. 3

   Choose a path based on leadership support: the 'full-steam-ahead' path for strong CEO sponsorship, or the 'prove-it' path for building momentum from the bottom-up.

4. 4

   If on the 'prove-it' path, execute a series of localized projects with measurable benefits, document successes, and build support until gaining executive commitment.

5. 5

   Secure enterprise-wide executive sponsorship and align resources to build a broad analytical capability focused on a distinctive capability.

6. 6

   Develop an enterprise-wide analytics plan and architecture, integrating data and standardizing tools.

7. 7

   Master analytics as a core capability, embedding it into key processes and products, and focus on continuous renewal and innovation.

1. 1

   Formulate a hypothesis about a customer behavior or product feature (e.g., a balance-transfer offer for a credit card).

2. 2

   Design a controlled market experiment, creating thousands of variations of the product offering (e.g., different interest rates, marketing messages, customer segments).

3. 3

   Launch the test to a small, statistically valid segment of the market.

4. 4

   Collect and analyze response data to empirically determine which variations are most successful and profitable.

5. 5

   Roll out the winning product configuration to the broader market.

6. 6

   Continuously repeat the cycle to refine existing products and discover new ones.

1. 1

   Identify a critical people-related business question (e.g., 'What are the defining behaviors of our best managers?').

2. 2

   Gather diverse data sources, such as employee surveys, performance reviews, promotion history, and compensation data.

3. 3

   Use advanced analytics (e.g., regression analysis, clustering) to identify the key variables and behaviors that correlate with desired outcomes (e.g., high-performing teams).

4. 4

   Codify the findings into simple, actionable principles (e.g., Google's 'Eight Rules for Good Management').

5. 5

   Develop and deploy interventions based on the findings, such as targeted training programs for managers.

6. 6

   Measure the impact of the interventions on employee performance and satisfaction to close the loop.

1. 1

   Gather historical data on demand, booking patterns, and seasonality.

2. 2

   Use predictive models to forecast demand for different customer segments.

3. 3

   Set optimal prices in real-time based on forecasts and current capacity.

4. 4

   Monitor performance against revenue opportunity metrics and adjust strategies.

1. 1

   Define non-traditional attributes of successful employees, such as intelligence and character.

2. 2

   Design quantitative and case-based tests to screen candidates' analytical abilities.

3. 3

   Conduct multiple rounds of interviews to assess both skills and cultural fit.

4. 4

   Analyze post-hire performance data to continuously refine selection criteria.

1. 1

   Gather data points on employees, such as tenure, performance history, compensation, and team dynamics.

2. 2

   Build a predictive model to generate an individual 'flight risk' score.

3. 3

   Identify the key drivers of attrition within the organization.

4. 4

   Alert managers of at-risk employees and provide suggestions for intervention.

5. 5

   Measure the impact of interventions on retention rates.

1. 1

   Analyze historical sales data and other factors to predict demand for specific items in a given area.

2. 2

   Proactively ship predicted items to a local distribution hub or a truck in the target region.

3. 3

   Wait for a customer in that region to place an order.

4. 4

   Complete the final leg of the delivery from the pre-positioned inventory.

1. 1

   Develop an initial list of industry participants and determine the industry's SIC code.

2. 2

   Conduct a search for broad industry studies and read through company annual reports for an overview.

3. 3

   Begin field interviews with industry observers (e.g., trade press, analysts) to gain an unbiased overview before tackling direct competitors.

4. 4

   Systematically collect published and field data across key categories like product lines, buyers, technology, costs, and competitors.

5. 5

   Synthesize the collected data using analytical frameworks like the Five Forces to diagnose industry structure.

1. 1

   Identify the current explicit or implicit strategy and its underlying assumptions.

2. 2

   Analyze the industry environment, including key success factors, opportunities, and threats (industry analysis).

3. 3

   Analyze the capabilities, limitations, and probable moves of existing and potential competitors (competitor analysis).

4. 4

   Assess the company's own strengths and weaknesses relative to present and future competitors.

5. 5

   Test the current strategy and its assumptions against the environmental analysis.

6. 6

   Generate feasible strategic alternatives based on the analysis.

7. 7

   Choose the alternative that best relates the company's situation to external opportunities and threats.

1. 1

   Collect field data from sources like the sales force, distribution channels, and suppliers, and published data from articles, public filings, and speeches.

2. 2

   Compile and catalog the data in a central location, such as a competitor library or computer database.

3. 3

   Perform digestive analysis on the data, creating summaries, comparative financial analyses, and pro-forma statements on competitors.

4. 4

   Communicate the distilled intelligence to strategists through regular newsletters, in-depth reports, or briefings during the planning process.

1. 1

   Identify the Problem: Listen to the prompt, ask clarifying questions, and restate the core problem to ensure you are answering the right question.

2. 2

   Analyze the problem: Use a framework (or a combination) to organize the problem. Talk through your analysis with the interviewer, testing assumptions and gathering more data.

3. 3

   Formulate options: Based on your analysis, summarize the cause(s) of the problem and generate 2-3 potential solutions.

4. 4

   Make a Decision: Evaluate the options against the client's main objective (e.g., profit, market share, social good) and recommend the best solution, justifying your choice.

5. 5

   Summarize the case and make a recommendation: Conclude by cleanly summarizing the problem, your key insights, the options considered, and your final recommendation as if presenting to a CEO.

1. 1

   Plan: Balance demand and supply requirements for sourcing, making, and delivering goods.

2. 2

   Source: Procure necessary goods, services, and raw materials.

3. 3

   Make: Convert inputs into the final product or service.

4. 4

   Deliver: Manage orders, transportation, and distribution to get the product to the customer.

5. 5

   Return: Handle returns, defects, and provide post-delivery customer service.

1. 1

   Develop a comprehensive library of target customer scenarios, capturing potential use cases.

2. 2

   Appoint a small subcommittee with veto power to lead the selection.

3. 3

   Publish and distribute the scenarios for rating.

4. 4

   Have each subcommittee member privately rate each scenario against 'showstopper' factors (target customer, compelling reason to buy, whole product, competition).

5. 5

   Publicly discuss ratings to surface disagreements and build consensus, then rank order and eliminate weak scenarios.

6. 6

   Repeat the private rating and public ranking process with the remaining scenarios against 'nice-to-have' factors (partners, distribution, pricing, positioning, next target).

7. 7

   Commit to the single, top-ranked scenario as the beachhead target.

1. 1

   Develop the claim: reduce the positioning statement to a crisp, two-sentence formula that passes the 'elevator test'.

2. 2

   Gather the evidence: prove the claim is undisputed by demonstrating market share leadership within the niche, or strong support from partners and allies.

3. 3

   Execute communications: address the right audiences (e.g., business press, vertical media) with the claim and evidence, focusing on market-centric messages.

4. 4

   Incorporate feedback and adjustment: monitor competitive responses and market perception, then patch or adjust the positioning as needed.

1. 1

   Develop a thorough understanding of the business problem and objectives (Business Understanding).

2. 2

   Examine the available data, assessing its strengths, limitations, costs, and relevance to the business problem (Data Understanding).

3. 3

   Manipulate and convert raw data into a format suitable for modeling techniques, such as a feature vector representation (Data Preparation).

4. 4

   Apply data mining techniques to the prepared data to extract patterns and build models (Modeling).

5. 5

   Rigorously assess the models to ensure they are valid, reliable, and meet the business goals (Evaluation).

6. 6

   Put the results of data mining into real use to realize a return on investment, for example by integrating a model into an information system (Deployment).

1. 1

   Make sense in the context of the category by researching the existing perceptions of you and your competitors in the customers' minds.

2. 2

   Find the differentiating idea by analyzing your product, history, manufacturing process, or market position to identify a unique and meaningful point of difference.

3. 3

   Establish the credentials to support your idea by gathering proof points, demonstrations, or third-party validation that make your claim believable.

4. 4

   Communicate your difference relentlessly and consistently across all channels, including advertising, PR, website, and internal messaging, to drive the idea into the mind.

1. 1

   Assess the current goal-setting situation by asking managers and employees specific questions about the existing process.

2. 2

   Establish an appropriate 'OKR Cadence' (e.g., quarterly) that balances urgency and feasibility.

3. 3

   Define OKRs collaboratively, starting with high-level Organizational OKRs, then Team OKRs, and finally Individual OKRs if desired.

4. 4

   Appoint a DRI ('OKR Champion') for each team to ensure OKRs are tracked and pursued.

5. 5

   Conduct regular (e.g., weekly) check-ins to monitor progress on Key Results.

6. 6

   Grade the OKRs at the end of the cadence on a 0-10 scale, focusing on learning rather than punishment.

7. 7

   Use feedback and grades from the current cycle to refine and set new OKRs for the next cycle.

1. 1

   Define the meeting's objective and agenda, emailing a concise summary to attendees beforehand.

2. 2

   Invite only the people who absolutely need to be there to keep the group small and focused.

3. 3

   Use a timer to keep the meeting to a predefined, short duration (e.g., 30 minutes).

4. 4

   Discourage the use of distracting technology like laptops and smartphones.

5. 5

   Conclude the meeting by assigning clear, written action steps to specific individuals (DRIs) with deadlines.

6. 6

   Pin the written action steps to a public board to maintain visibility and accountability.

1. 1

   Diagnose the nature of the challenge by identifying the critical factors in the situation, asking 'What's going on here?'. Simplify the complexity of reality into a core issue or obstacle.

2. 2

   Formulate a guiding policy that outlines an overall approach for dealing with the obstacles identified in the diagnosis. This policy rules out a large set of possible actions and channels effort in a specific direction.

3. 3

   Design a set of coherent actions that are feasible and coordinated to carry out the guiding policy. These actions should be mutually reinforcing and focused on a pivotal objective.

1. 1

   Diagnose the system as chain-linked and identify the key weak links or bottlenecks.

2. 2

   Launch a focused campaign to improve the first weak link, making this the sole priority and absorbing the short-term costs of not seeing immediate overall system improvement.

3. 3

   Once the first link is strengthened, launch a second campaign focused on the next weak link, leveraging the improvement in the first.

4. 4

   Continue this sequential process until all the critical weak links have been brought up to a higher standard of performance.

1. 1

   Assemble a 'Council' of the right people, regardless of title, to engage in the process.

2. 2

   Engage in vigorous dialogue and debate, guided by the three circles framework.

3. 3

   Ask what the organization can realistically be the best in the world at, distinguishing it from things it can only be competent at.

4. 4

   Analyze and determine what single denominator (profit per x) most powerfully drives the organization's economic engine.

5. 5

   Identify what the organization and its people are truly and deeply passionate about, including its core purpose.

6. 6

   Make decisions and take actions based on emerging insights, then conduct autopsies on the results to learn and refine understanding.

7. 7

   Repeat this cycle of debate, decision, analysis, and learning until a simple, elegant, and deeply understood Hedgehog Concept emerges.

1. 1

   Analyze data from analytics and user feedback to identify opportunities and problems.

2. 2

   Generate a high volume of specific, testable ideas and add them to a shared idea pipeline.

3. 3

   Prioritize ideas using a quantitative scoring system like ICE (Impact, Confidence, Ease).

4. 4

   Run the highest-priority experiments, ensuring they are designed to produce statistically valid results.

5. 5

   Analyze experiment results, document learnings in a knowledge base, and feed insights back into the next cycle's analysis phase.

1. 1

   Establish environmental demand: Analyze what your customers, competitors, and technology will demand from you in one year.

2. 2

   Determine your present status: Assess what your current activities and projects in the pipeline will yield in one year.

3. 3

   Close the gap: Define a strategy (a set of actions) to reconcile the difference between the future demand and your projected status.

1. 1

   Engage in free and open discussion, encouraging disagreement and debate from all participants, regardless of their position.

2. 2

   Reach a clear and unambiguous decision once all viewpoints have been heard.

3. 3

   Obtain full support and commitment to the decision from all participants, even those who originally disagreed.

1. 1

   Gather all relevant materials (progress reports, MBOs, one-on-one notes).

2. 2

   Brainstorm and write down everything you can think of about the subordinate's performance onto a blank sheet of paper, without editing.

3. 3

   Analyze the raw notes, looking for patterns and relationships between items.

4. 4

   Group related items into a small number of core 'messages' (strengths or weaknesses).

5. 5

   Select specific examples from your notes to support each core message.

6. 6

   Prioritize the messages and drop the less important ones to ensure the subordinate can absorb what you deliver.

1. 1

   Cue the user with an external or internal Trigger.

2. 2

   Facilitate the simplest possible Action in anticipation of a reward.

3. 3

   Deliver a Variable Reward that satisfies the user's need yet leaves them wanting more.

4. 4

   Prompt the user to make a small Investment in the product, which stores value and loads the next trigger.

1. 1

   Identify your habitual users by defining how often they 'should' be using your product and finding the cohort that meets or exceeds this threshold.

2. 2

   Codify the 'Habit Path' by analyzing the user flow of your most devoted users to find common, sequential behaviors they performed.

3. 3

   Modify the product to guide new users down the same Habit Path, then measure the results and continue iterating.

1. 1

   Cultivate a new 'Mindset' by challenging existing process assumptions and focusing on reimagining work around the 'missing middle' of human-machine collaboration.

2. 2

   Establish a culture of 'Experimentation' by identifying areas to test AI, running pilots, learning from both successes and failures, and scaling up what works.

3. 3

   Exercise responsible 'Leadership' by addressing the ethical and legal implications of AI, building trust with employees and customers, and committing to reskilling the workforce.

4. 4

   Build a 'Data' supply chain by breaking down silos and creating a dynamic flow of high-quality, varied data to train and fuel AI systems.

5. 5

   Develop new 'Skills' by identifying and investing in training for the eight 'fusion skills' that enable employees to work effectively with AI.

1. 1

   Make an initial large request that the target is likely to refuse.

2. 2

   After the refusal, make the smaller, desired request.

3. 3

   Frame the second request as a concession, which pressures the target to reciprocate with their own concession (agreement).

1. 1

   Start by asking for a small, almost trivial commitment that is easy to obtain.

2. 2

   Once the person has agreed, their self-image begins to shift to be consistent with that action.

3. 3

   Later, make the larger, related request you truly wanted. The person is now more likely to accept to remain consistent with their new self-image.

1. 1

   Offer an initial, highly attractive inducement to get the person to make a purchase decision.

2. 2

   Encourage the person to develop their own reasons to support their choice (e.g., filling out forms, taking a test drive).

3. 3

   Before the deal is finalized, remove the initial inducement, citing an 'error' or policy change.

4. 4

   Present the final, less attractive deal, expecting the customer to proceed with the purchase because their commitment has 'grown its own legs'.

1. 1

   Identify the disruptive potential of the technology using trajectory maps to see if its performance improvement pace exceeds the market's absorption rate.

2. 2

   Assign responsibility for the project to an autonomous organization, such as a spin-out or a new, independent division.

3. 3

   Ensure the new organization is small enough that small market opportunities and wins will be motivating and viewed as success.

4. 4

   Staff the new organization with people whose skills align with the new challenge and empower them to create new processes.

5. 5

   Create a plan for learning by identifying critical assumptions and testing them through fast, inexpensive market probes rather than executing a detailed, long-term strategy.

6. 6

   Find an initial market that values the specific attributes of the disruptive product as it currently exists.

7. 7

   Allow the independent organization to develop its own unique cost structure and values (profit model) suited for the new market.

1. 1

   Initiate a questioning phase to deeply understand the problem and identify extreme users.

2. 2

   Conduct intense field observation and network with users to gather data and build empathy.

3. 3

   Hold a 'Deep Dive' brainstorming session where the team shares all gathered insights and associates ideas freely.

4. 4

   Engage in rapid prototyping, building and testing multiple low-fidelity models to get user feedback and refine the best ideas.

1. 1

   Obtain a green light for a project of personal interest.

2. 2

   Allocate up to 20% of work time to develop the project.

3. 3

   Use internal forums to share progress, gather feedback, and collaborate with other interested employees.

4. 4

   Present successful projects to management for potential launch as official Google products.

1. 1

   Assess if the idea can target a large population of nonconsumers, creating a new market.

2. 2

   Alternatively, assess if the idea can target overserved customers at the low end of an existing market with a 'good enough' product.

3. 3

   Design a business model that can be profitable at the low price points required for the disruptive foothold.

4. 4

   Verify that the strategy is disruptive to all significant incumbents, ensuring they are motivated to flee rather than fight.

5. 5

   Plan to launch the venture in an autonomous organization whose values and processes fit the disruptive task.

1. 1

   Articulate the required financial performance (e.g., target income statement and ROI) for the venture to be considered a success.

2. 2

   List all assumptions that must prove true for those financial projections to be realized, then rank them by importance.

3. 3

   Design and implement a plan to learn by quickly and inexpensively testing the most critical assumptions.

4. 4

   Adapt the strategy based on what is learned from the tests.

5. 5

   Invest in full-scale implementation of the strategy only after the most critical assumptions have been validated.

1. 1

   Secure an open-ended engagement with the CEO based on a monthly retainer rather than a fixed project fee.

2. 2

   Conduct an excruciatingly detailed competitive cost analysis, often using reverse-engineering and extensive data gathering to understand competitors' cost structures.

3. 3

   Perform a deep analysis of customer segments and their needs through direct interviews and research.

4. 4

   Develop a comprehensive picture of the competitive landscape, often using tools like the growth-share matrix for all major players.

5. 5

   Formulate an integrated strategy that connects financial policy (e.g., debt), pricing, operations, and competitive moves.

6. 6

   Work collaboratively with the client in an ongoing relationship to implement the strategy, drive results, and continuously adapt to the market.

1. 1

   Conduct a comprehensive Marketing Audit of the external environment (market, competition) and the internal situation (sales, market share, marketing mix effectiveness).

2. 2

   Summarize the audit findings into a concise SWOT analysis, identifying key differential Strengths, Weaknesses, Opportunities, and Threats.

3. 3

   State the key Assumptions about the planning environment (e.g., market growth rate, competitive actions) upon which the plan will be based.

4. 4

   Set measurable and quantified Marketing Objectives for the planning period, focusing on products and markets (e.g., 'achieve 15% market share in segment X with product Y').

5. 5

   Formulate Marketing Strategies that define the broad approach to achieving the objectives, covering the 4Ps: Product, Price, Place, and Promotion.

6. 6

   Develop detailed Programs (or tactical plans) for the first year, specifying actions, responsibilities, timing, and costs for each part of the marketing mix.

7. 7

   Consolidate all costs into a Budget and finalize sales forecasts based on the objectives and strategies.

8. 8

   Establish procedures for Measurement and Review to monitor progress against the plan and make adjustments as needed.

1. 1

   Declare the starting node to be at distance 0, forming the first layer.

2. 2

   Find all neighbors of nodes in the first layer that have not yet been discovered; these form the second layer, at distance 1.

3. 3

   Continue this process, forming layer `i+1` from all undiscovered neighbors of nodes in layer `i`.

4. 4

   Stop when no new nodes can be discovered.

1. 1

   Calculate the 'betweenness' of every edge in the graph, which measures how many shortest paths pass through it.

2. 2

   Remove the edge (or edges) with the highest betweenness.

3. 3

   Recalculate the betweenness for all remaining edges.

4. 4

   Repeat the removal and recalculation steps until the desired number of components is achieved or no edges remain.

1. 1

   Start with all sellers setting their prices to 0.

2. 2

   Construct the 'preferred-seller graph' where each buyer has an edge to the seller(s) offering them the highest payoff (valuation minus price).

3. 3

   Check if a perfect matching exists. If so, stop; the current prices are market-clearing.

4. 4

   If no perfect matching exists, find a constricted set of buyers S (a group of buyers who collectively prefer a smaller set of sellers N(S)).

5. 5

   Have every seller in N(S) raise their price by one unit.

6. 6

   Repeat the process from step 2.

1. 1

   Initialize all pages with a hub score and an authority score of 1.

2. 2

   Repeatedly apply two update rules for a fixed number of steps.

3. 3

   First, update each page's authority score to be the sum of the hub scores of pages linking to it.

4. 4

   Second, update each page's hub score to be the sum of the authority scores of pages it links to.

5. 5

   After the iterations, the pages with the highest scores are the top hubs and authorities.

1. 1

   Understand the Customers Who Love Your Product: Make a list of your best-fit, happiest customers to use as a reference point.

2. 2

   Form a Positioning Team: Assemble a cross-functional group of leaders who can represent different perspectives on the customer and product.

3. 3

   Align Your Positioning Vocabulary and Let Go of Your Positioning Baggage: Ensure the team shares a common understanding of positioning and agrees to suspend preconceived notions.

4. 4

   List Your True Competitive Alternatives: Determine what your best customers would do or use if your solution didn't exist.

5. 5

   Isolate Your Unique Attributes or Features: Based on the alternatives, list the capabilities your product has that the competition lacks.

6. 6

   Map the Attributes to Value 'Themes': Translate your unique features into the quantifiable benefits and value they provide to customers.

7. 7

   Determine Who Cares a Lot: Identify the characteristics of a target segment that makes them value your unique capabilities more than anyone else.

8. 8

   Find a Market Frame of Reference: Deliberately choose a market category that makes your unique value obvious to your target segment and decide on a positioning 'style' (e.g., Head to Head).

9. 9

   Layer On a Trend: If applicable, connect your positioning to a relevant market trend to create urgency and reinforce relevance.

10. 10

    Capture Your Positioning so It Can Be Shared: Document the output in a shareable format like a positioning canvas and sales story.

1. 1

   Enter the Planning phase by setting company-level OKRs for the cycle.

2. 2

   Unfold and align team and individual OKRs to the company OKRs, creating hypotheses and action plans for achievement.

3. 3

   Enter the Monitoring phase by conducting regularly scheduled 'Results Meetings' to track progress and solve problems for off-track items.

4. 4

   Enter the Debriefing phase at the end of the cycle by grading OKR achievement and having teams reflect on learnings.

5. 5

   Use the debriefing outputs to inform the Planning phase of the next cycle.

1. 1

   Define the problem by understanding the discrepancy between actual and desired outcomes.

2. 2

   Identify all possible choices or alternative solutions to the problem.

3. 3

   Select measurable criteria to evaluate the alternatives.

4. 4

   Develop a mathematical model to represent the problem and evaluate the alternatives based on the selected criteria.

5. 5

   Solve the model to find the optimal and feasible alternative, thereby making a decision.

1. 1

   Construct the standard form of the model by adding slack variables to convert inequalities into equalities.

2. 2

   Find the Initial Basic Feasible Solution (IBFS) by setting decision variables to zero.

3. 3

   Construct the initial simplex tableau.

4. 4

   Identify the key column (incoming variable) by selecting the most positive value in the net evaluation (cj – zj) row.

5. 5

   Identify the key row (outgoing variable) by selecting the minimum non-negative ratio of the resource column to the key column.

6. 6

   Perform row operations to create a new simplex tableau with the new basic variable.

7. 7

   Repeat the process from step 4 until all values in the net evaluation row are zero or negative.

1. 1

   Draw the network diagram and determine the critical path under normal times.

2. 2

   Calculate the cost slope (cost to crash per unit of time) for each activity.

3. 3

   Select the activity on the critical path with the least cost slope.

4. 4

   Reduce the duration of the selected activity by the maximum amount possible without it becoming non-critical or exceeding its crash limit.

5. 5

   Update the project network, recalculate path lengths, and determine the new total cost.

6. 6

   Repeat the process from step 3 until the desired project duration is achieved or no further economical crashing is possible.

1. 1

   Frame the choice by articulating at least two mutually exclusive options to resolve an issue.

2. 2

   Generate a broad list of strategic possibilities, encouraging creative and unexpected ideas.

3. 3

   Specify the conditions that would have to be true for each possibility to be a winning choice, without judging their validity.

4. 4

   Identify the barriers by pinpointing which of the necessary conditions the team believes are least likely to hold true.

5. 5

   Design valid tests for the barrier conditions, often empowering the biggest skeptic to design the test.

6. 6

   Conduct the tests, starting with the biggest barrier first to efficiently eliminate non-viable options.

7. 7

   Make the choice based on the test results, which should make the best path forward clear.

1. 1

   Submit a written summary of strategic issues in advance of the meeting.

2. 2

   Receive a note from the senior leadership team selecting a few critical issues for discussion.

3. 3

   Engage in a dialogue-focused meeting with no formal presentation and a limited number of participants.

4. 4

   Focus the conversation on fundamental questions about winning, consumer needs, and competitive threats.

5. 5

   Come to a shared understanding and refined set of strategic choices.

1. 1

   Identify a measure of system size (e.g., body mass, population) and a key metric of interest (e.g., metabolic rate, number of patents).

2. 2

   Collect data for these variables across a wide range of system sizes, preferably spanning several orders of magnitude.

3. 3

   Plot the metric versus size on a log-log graph.

4. 4

   Observe whether the data points approximate a straight line, which indicates a power-law relationship.

5. 5

   Calculate the slope of the best-fit line to determine the scaling exponent.

6. 6

   Interpret the exponent's value: less than 1 (sublinear, economies of scale), equal to 1 (linear), or greater than 1 (superlinear, increasing returns).

1. 1

   Start with existing internal capabilities and resources.

2. 2

   Identify an opportunity created by flux in external conditions, such as a technological shift.

3. 3

   Create an 'invention' (a new product, business model, etc.) that delivers 'compelling value' to customers.

4. 4

   During the invention and adoption phases, use the 7 Powers framework as a 'compass' to actively build a Barrier against future competition.

1. 1

   On Monday, map the problem and agree on a long-term goal and a specific target for the week.

2. 2

   On Tuesday, individually sketch detailed, competing solutions to the target problem.

3. 3

   On Wednesday, critique the solutions and use a structured decision process to choose the strongest ones to prototype.

4. 4

   On Wednesday afternoon, create a detailed storyboard to plan the prototype.

5. 5

   On Thursday, build a high-fidelity, realistic prototype of the chosen solution(s) in a single day.

6. 6

   On Friday, show the prototype to five target customers in one-on-one interviews and observe their reactions.

1. 1

   Display all solution sketches on a wall as if in an 'Art Museum'.

2. 2

   Conduct a 'Heat Map' review, where team members silently place dot stickers on interesting ideas.

3. 3

   Hold a 'Speed Critique' of each sketch (3 minutes each) to discuss highlights without the creator pitching their own idea.

4. 4

   Run a 'Straw Poll' where each team member casts one non-binding vote for their preferred solution.

5. 5

   The Decider makes the final call by placing multiple 'Supervotes' on the solution(s) to be prototyped.

1. 1

   On Monday, start at the end by setting a long-term goal and listing sprint questions. Make a map of the customer journey. Interview experts and organize insights using 'How Might We' notes. Pick a specific target for the sprint.

2. 2

   On Tuesday, gather inspiration with 'Lightning Demos' of existing solutions. Sketch detailed, competing solutions individually using a four-step process (Notes, Ideas, Crazy 8s, Solution Sketch).

3. 3

   On Wednesday, critique the sketches using the 'Sticky Decision' process. Decide on the winning solutions with Decider 'supervotes'. Create a detailed, step-by-step storyboard to plan the prototype.

4. 4

   On Thursday, adopt a 'prototype mindset' to build a realistic façade. Divide the work among the team (Makers, Stitcher, Writer, etc.) and create a 'Goldilocks quality' prototype in just seven hours.

5. 5

   On Friday, conduct five one-on-one interviews with target customers. Observe their reactions to the prototype as a team, take notes, and identify patterns to determine the next steps.

1. 1

   Look backward into your or your organization's past, not forward to future goals.

2. 2

   Identify the origin stories and moments of greatest pride or passion to find recurring themes.

3. 3

   Synthesize these themes into a core purpose, cause, or belief that has consistently driven behavior.

4. 4

   Articulate this discovery as a simple, clear statement of purpose that is distinct from WHAT you do.

1. 1

   Identify your largest and most strategic clients.

2. 2

   Assign a senior executive from your leadership team to each of these focus accounts.

3. 3

   Mandate that the executive meets with their counterpart at the client company at least quarterly.

4. 4

   Act as the client's champion inside your organization, resolving issues and communicating progress.

5. 5

   Use insights from these meetings to drive improvements in service, billing, or product development.

1. 1

   Stop and listen actively to the entire objection without interrupting.

2. 2

   Clarify the objection by restating it to show empathy and ensure you understand the real issue ('So, what I'm hearing is...').

3. 3

   Isolate the objection to confirm it's the primary barrier to moving forward ('If we can resolve this, are you ready to proceed?').

4. 4

   Provide a concise, prepared response that directly addresses their clarified concern.

5. 5

   Confirm that their concern has been answered ('Does that answer your concern?') and then stop talking to avoid raising new issues.

1. 1

   Analyze the organization's business strategy to determine the key behaviors and outcomes needed for success.

2. 2

   Set strategic objectives for the pay system across six impact areas: motivation, skill development, attraction/retention, structure, culture, and cost.

3. 3

   Establish a set of core principles to guide all pay decisions, covering issues like pay for performance, market position, and internal vs. external equity.

4. 4

   Select specific pay structures and practices for performance pay, base pay, and compensation mix that are consistent with the principles and objectives.

5. 5

   Design and manage the communication and decision-making processes to ensure the system is understood, trusted, and effectively administered.

1. 1

   Establish a 'performance contract' at the beginning of the period, with the appraiser and appraisee agreeing on goals and measures.

2. 2

   Conduct a mid-course review to adjust goals if necessary and provide ongoing feedback.

3. 3

   Allow the employee to present their perception of their own performance at the end of the period before a final rating is determined.

4. 4

   Hold a final discussion where the supervisor presents the final appraisal and specifies the resulting pay action.

1. 1

   IDENTIFY the system's constraint(s).

2. 2

   Decide how to EXPLOIT the system's constraint(s), getting the most out of it with existing resources.

3. 3

   SUBORDINATE everything else to the exploitation decision, making all other resources support the constraint.

4. 4

   ELEVATE the system's constraint(s) by finding ways to increase its capacity, if necessary.

5. 5

   If a constraint has been broken in a previous step, return to Step 1, but do not let INERTIA become the system's constraint.

1. 1

   Formulate a hypothesis about what will create value for customers.

2. 2

   Build a Minimum Viable Product (MVP) as the experiment to test the hypothesis.

3. 3

   Expose the MVP to customers and measure their actual behavior using actionable metrics.

4. 4

   Analyze the data and compare it to the hypothesis to generate validated learning.

5. 5

   Decide whether to pivot (change the strategy) or persevere (continue with the current strategy and optimize).

1. 1

   Begin with one or more initial entities.

2. 2

   Introduce a new entity.

3. 3

   With a small probability, have the new entity stand alone.

4. 4

   With a large probability, have the new entity connect to an existing entity, with the chance of connecting to any given entity being proportional to that entity's current size (or number of connections).

5. 5

   Repeat the process with more new entities.

1. 1

   Assign initial weights to all possible actions.

2. 2

   Select an action probabilistically, with higher-weighted actions being more likely.

3. 3

   Observe the reward from the chosen action.

4. 4

   Compare the reward to an internal 'aspiration level' (e.g., the average reward so far).

5. 5

   Increase the weight of the chosen action if the reward was better than the aspiration level, and decrease it if it was worse.

6. 6

   Repeat the process.

1. 1

   Identify and focus on industries with attractive economic characteristics, like broadcasting and newspapers.

2. 2

   Selectively use leverage to acquire occasional large properties, sourced through direct relationships rather than auctions.

3. 3

   Apply rigorous operational discipline to newly acquired businesses to significantly improve their margins and cash flow.

4. 4

   Use the enhanced cash flow to rapidly pay down acquisition-related debt.

5. 5

   Repeat the cycle by leveraging the improved assets to make another large, opportunistic acquisition.

1. 1

   Wait until the company's stock is trading at a low multiple of cash flow or book value.

2. 2

   Announce a large tender offer for a significant percentage of the company's shares, sometimes funded with debt.

3. 3

   If the tender is oversubscribed, make the bold decision to purchase all shares offered, exceeding the initial target.

4. 4

   Absorb the massive reduction in shares, concentrating future earnings and value among a smaller shareholder base.

1. 1

   Write each planned change on a physical index card, noting who is making the change, what system is affected, and a brief summary.

2. 2

   Submit all change cards to a central location before the scheduled CAB meeting.

3. 3

   In the meeting, categorize changes as high-risk (requiring full CAB discussion), standard (pre-approved), or medium-risk (requiring peer review).

4. 4

   Discuss risks, dependencies, and timing for all high-risk changes as a group.

5. 5

   Post approved changes on a large wall calendar to visualize the weekly schedule and identify potential collision points, like on deployment days.

1. 1

   Start with an estimate of the average outcome for the relevant category (this is the baseline).

2. 2

   Determine the outcome that matches the intensity of your impression of the evidence (this is your intuitive prediction).

3. 3

   Estimate the correlation between your evidence and the outcome (on a scale of 0 to 1).

4. 4

   Move from the baseline toward your intuitive prediction by the percentage of your correlation estimate (e.g., if correlation is 0.3, move 30% of the distance).

1. 1

   Identify a few traits (around six) that are prerequisites for success in the position, ensuring they are as independent as possible.

2. 2

   Create a list of factual, past-behavior questions for each trait.

3. 3

   Design a 1-5 rating scale for each trait with specific anchors for what constitutes 'very weak' or 'very strong'.

4. 4

   Conduct the interview by assessing each trait in a fixed sequence, scoring one before moving to the next to prevent halo effects.

5. 5

   Sum the six scores for each candidate to get a total score.

6. 6

   Select the candidate with the highest total score, even if another candidate made a better intuitive impression.

1. 1

   Gather a group of individuals knowledgeable about the decision.

2. 2

   Announce the premise: 'Imagine that we are a year into the future. We implemented the plan as it now exists. The outcome was a disaster.'

3. 3

   Ask everyone to spend a few minutes independently writing a brief history of that disaster.

4. 4

   Have each individual read their story of the disaster, starting with known supporters of the decision.

5. 5

   Collect the identified threats and use them to review and strengthen the plan.

1. 1

   Identify the real issue by digging beneath the symptoms, often asking 'why' multiple times until the root cause is clear.

2. 2

   Discuss the issue openly and honestly, with all team members contributing their perspectives once, without politicking or tangents.

3. 3

   Solve the issue by agreeing on a specific action plan. The solution becomes a to-do item assigned to one person, ensuring it gets done.

1. 1

   Brainstorm and list everything that could or should be accomplished in the next 90 days.

2. 2

   Debate and decide which items are the most critical priorities, combining and eliminating until only 3-7 company Rocks remain.

3. 3

   Define each Rock to be specific, measurable, and attainable (SMART).

4. 4

   Assign a single owner from the leadership team to be accountable for the completion of each company Rock.

5. 5

   Have each leadership team member set their own 3-7 individual Rocks, including any company Rocks they own.

6. 6

   Share the company Rocks with the entire organization.

7. 7

   Cascade the process down, with each department and employee setting their own Rocks (1-3 for non-leaders).

1. 1

   Identify your handful of core processes (e.g., The HR Process, The Sales Process, The Delivery Process).

2. 2

   Document each process following the 20/80 rule, capturing the 20% of steps that yield 80% of the results. Keep it high-level.

3. 3

   Ensure the documented processes are followed by all through training and ongoing management.

1. 1

   Start the meeting on time with a 5-minute 'Segue' of personal and professional good news.

2. 2

   Review the weekly Scorecard for 5 minutes to see if any numbers are off-track.

3. 3

   Conduct a Rock Review for 5 minutes, where each person states if their quarterly Rocks are 'on track' or 'off track'.

4. 4

   Share customer and employee headlines for 5 minutes.

5. 5

   Review the previous week's to-do list for 5 minutes to ensure completion.

6. 6

   Spend 60 minutes on IDS (Identify, Discuss, Solve) the most important issues.

7. 7

   Conclude the meeting by recapping the new to-do list and rating the meeting on a scale of 1-10.

1. 1

   The leadership team meets to review the past quarter and identify the most important priorities for the company for the next 90 days.

2. 2

   The team debates and agrees on 3-7 company-wide Rocks.

3. 3

   The leadership team shares the new company Rocks with the entire organization in a 'state-of-the-company' meeting.

4. 4

   Each department meets and follows the same process to set their own 3-7 departmental Rocks that support the company Rocks.

5. 5

   Individual Rocks are then set, aligning with departmental and company priorities.

1. 1

   Review the Vision/Traction Organizer (V/TO) to ensure everyone is on the same page.

2. 2

   Brainstorm a comprehensive list of everything that needs to be accomplished in the next 90 days.

3. 3

   Debate and prioritize the list, deciding to keep, kill, or combine items until only the top 3-7 company-level Rocks remain.

4. 4

   Define each Rock to be specific, measurable, and attainable (SMART).

5. 5

   Assign a single owner from the leadership team to be accountable for each company Rock.

6. 6

   Have each leadership team member set their own 3-7 individual Rocks, including any company Rocks they own.

7. 7

   Compile all Rocks onto a single Rock Sheet for weekly review.

1. 1

   Prioritize the Issues List and select the single most important issue to tackle first.

2. 2

   Identify the real, underlying issue, digging past the surface-level symptoms.

3. 3

   Discuss all aspects of the issue, allowing every team member to contribute their perspective once, avoiding politicking or repetition.

4. 4

   Propose solutions and debate until the best course of action is agreed upon.

5. 5

   Solve the issue by creating a clear action item (a 'To-Do') and assigning it to a single person for completion within 7 days.

1. 1

   Create a central orchestration team with stakeholders from relevant functions (HR, procurement, finance) and business units to develop a working plan, goals, and metrics.

2. 2

   Promote local experimentation by introducing pilot programs to test new configurations of internal and external workers on projects.

3. 3

   Institute coordinated learning and resourcing, where the central team identifies and addresses structural impediments (e.g., outdated policies) revealed by local experiments.

4. 4

   Expand the workforce ecosystem by institutionalizing successful new practices, systems, and tools, and consider connecting with other organizations' ecosystems.

1. 1

   Define the measurement architecture by selecting the appropriate organizational unit and identifying its linkages to the corporation.

2. 2

   Conduct a first round of interviews with the senior management team to get input on strategic objectives for each of the four perspectives.

3. 3

   Hold a first executive workshop to synthesize interview findings, debate the strategy, and build consensus on a preliminary set of strategic objectives.

4. 4

   Form subgroups for each perspective to refine objectives and select specific performance driver and outcome measures.

5. 5

   Hold a second executive workshop for the management team to review the subgroups' work and link the measures in cause-and-effect chains.

6. 6

   Develop a final implementation plan, including stretch targets, communication strategies, and linkages to information systems and management processes.

1. 1

   Clarify and translate the vision and strategy into a communicable Balanced Scorecard.

2. 2

   Communicate the scorecard throughout the organization and use it to align departmental, team, and personal goals to the strategy.

3. 3

   Use the gaps between stretch targets and current performance to plan, set targets, and align strategic initiatives and resource allocation (including the annual budget).

4. 4

   Establish a feedback and learning process through regular, separate strategic review meetings to test the hypotheses of the strategy and adapt it as necessary.

Assumption 1

“Leaders, even if not quantitatively oriented themselves, will appreciate and champion data-driven approaches if the business case is made correctly.”

Assumption 2

“The necessary data for analysis either exists or can be obtained, cleaned, and integrated with reasonable effort and investment.”

Assumption 3

“'Industrializing' analytics by embedding them in automated processes is almost always superior to a 'craft' approach for recurring decisions.”

Assumption 4

“It is both possible and desirable to create a single 'enterprise' perspective and 'one version of the truth' for key data.”

Assumption 5

“Analytical work is inherently engaging and motivating for the people who perform it.”

Assumption 6

“Survival is the ultimate and most rational metric for judging the success of an idea, system, or heuristic.”

Assumption 7

“A clear, qualitative distinction exists between the 'artisanal' or 'natural' and the 'industrial' or 'modernistic,' with the former being inherently superior in terms of robustness and antifragility.”

Assumption 8

“The world of human, socioeconomic interaction belongs almost entirely to Extremistan, where randomness is wild and unpredictable.”

Assumption 9

“There is a clean separation and hierarchy between 'doers' (traders, engineers) and 'talkers' (academics, journalists), with doers possessing a superior, tacit, non-narrative form of knowledge.”

Assumption 10

“An individual's personal risk-taking posture (having 'skin in the game') is a reliable proxy for the truth-value or ethical soundness of their public pronouncements.”

Assumption 11

“The primary context is a high-growth, venture-backed technology company in a hypercompetitive market.”

Assumption 12

“The ultimate goal is to 'win,' often defined as achieving market leadership and a massive financial outcome.”

Assumption 13

“The founder-CEO is the best person to run the company, provided they can learn the necessary skills.”

Assumption 14

“A CEO's personal psychology is a critical variable in the company's success or failure.”

Assumption 15

“Aggressive, 'wartime' leadership tactics, including profanity and public confrontation, are not only acceptable but necessary tools for survival.”

Assumption 16

“The cost of data storage and processing will continue to plummet.”

Assumption 17

“Data can be a neutral and objective reflection of reality.”

Assumption 18

“Unlocking data's value is an inherent good for society.”

Assumption 19

“The technical skill to analyze data will become democratized and commoditized over time.”

Assumption 20

“Winner-take-all or winner-take-most markets are the default and most valuable type of market in the modern, networked economy.”

Assumption 21

“Access to large amounts of financial and human capital is readily available for promising ventures.”

Assumption 22

“The benefits of speed almost always outweigh the costs of the resulting inefficiency, 'bad' management, and imperfect products.”

Assumption 23

“The patterns of hypergrowth observed in software and internet companies are increasingly applicable to all industries.”

Assumption 24

“Managers and organizations can systematically break free from their industry's dominant logic and their own cognitive biases.”

Assumption 25

“The 'mass of noncustomers' shares powerful commonalities that can be readily identified and aggregated into a new market offering.”

Assumption 26

“Imitation of a blue ocean strategy is inherently difficult and slow due to various barriers like brand image conflict, organizational politics, and scale advantages.”

Assumption 27

“It is always possible to find a way to simultaneously raise buyer value while lowering the cost structure.”

Assumption 28

“The character of individuals is a primary determinant of business outcomes.”

Assumption 29

“Wall Street and the 'real' economy are often two separate worlds, operating on different principles.”

Assumption 30

“Corporate life is inherently theatrical and contains elements of high drama, farce, and tragedy.”

Assumption 31

“True innovation is often resisted by established, 'rational' corporate structures.”

Assumption 32

“Public relations and corporate image-making are often deeply at odds with corporate reality.”

Assumption 33

“Complex business relationships and constraints can be accurately represented by quantitative mathematical expressions.”

Assumption 34

“The parameters of the model (costs, demands, capacities, etc.) are known with certainty and are static for the planning period.”

Assumption 35

“The objective is to optimize a single, well-defined goal (e.g., maximize profit, minimize cost).”

Assumption 36

“The founder possesses a marketable and remote-friendly skillset.”

Assumption 37

“A sufficient niche market exists and is reachable.”

Assumption 38

“The founder has a high degree of self-discipline and is a capable generalist.”

Assumption 39

“Success is primarily determined by mindset and strategy, not external market forces.”

Assumption 40

“Superior business performance is primarily a function of making better, more rational decisions.”

Assumption 41

“It is both possible and desirable to quantify most important aspects of business.”

Assumption 42

“Organizational culture and politics are difficult but ultimately tractable problems that can be overcome by committed leadership and demonstrated results.”

Assumption 43

“The tools and talent for advanced analytics, while scarce, are ultimately attainable resources for any sufficiently committed organization.”

Assumption 44

“More data and more sophisticated analysis are inherently better and lead to superior business performance.”

Assumption 45

“Organizational transformation towards an analytical culture can be achieved by following a systematic, stage-based roadmap.”

Assumption 46

“Companies can successfully hire and manage the scarce, specialized talent (data scientists, PhDs) required for advanced analytics.”

Assumption 47

“Business competition is primarily a rational exercise that can be optimized.”

Assumption 48

“Firms and their managers generally act as rational economic agents seeking to maximize long-run profitability.”

Assumption 49

“Industry structure, while subject to evolution, is sufficiently stable to be a valid basis for strategy formulation.”

Assumption 50

“Sufficient information to conduct the analyses is available or can be obtained through diligent effort.”

Assumption 51

“The business unit is the correct level for the application of competitive strategy analysis.”

Assumption 52

“The primary goal of consulting interviews is to correctly apply a known framework.”

Assumption 53

“Business problems fit neatly into predefined frameworks.”

Assumption 54

“The 'big three' consulting firms (McKinsey, BCG, Bain) and their methods are the universal standard for business analysis.”

Assumption 55

“Quantitative analysis and structured communication are more important than the content of personal experiences.”

Assumption 56

“Knowing the name of the framework is less important than listing its components.”

Assumption 57

“The model is primarily designed for business-to-business (B2B) markets.”

Assumption 58

“The product being marketed is a 'discontinuous' or 'disruptive' innovation.”

Assumption 59

“The ultimate goal is rapid growth and market leadership, reflecting a venture-capital funded mindset.”

Assumption 60

“Pragmatist buyers are highly reference-oriented and risk-averse.”

Assumption 61

“Business problems can be effectively decomposed into the canonical data mining tasks presented (classification, regression, clustering, etc.).”

Assumption 62

“Better predictive performance on historical data (evaluated properly) will lead to better business outcomes when the model is deployed.”

Assumption 63

“It is possible and practical to obtain a cost-benefit matrix that accurately reflects business values.”

Assumption 64

“The reader, whether a manager or aspiring data scientist, operates within an organization that is rational and receptive to data-analytic thinking.”

Assumption 65

“The benefits of data mining for business decision-making generally outweigh the associated ethical and privacy risks, or that these risks can be managed.”

Assumption 66

“The consumer mind primarily operates on logic when making purchasing decisions.”

Assumption 67

“A single, simple differentiating idea is always the most effective strategy.”

Assumption 68

“The CEO has the ultimate power and insight to direct and maintain the differentiation strategy.”

Assumption 69

“Being 'first' in the mind is a nearly insurmountable advantage.”

Assumption 70

“The reader holds a management or leadership position with the authority to implement company-wide or team-wide systems like OKRs.”

Assumption 71

“All meaningful work can be distilled into quantifiable Key Results.”

Assumption 72

“Organizational transparency is both achievable and universally beneficial.”

Assumption 73

“Employees are primarily motivated by contributing to a larger purpose and will embrace ambitious goals.”

Assumption 74

“A single, coherent strategy designed by a leader or a small group is the primary vehicle for organizational success.”

Assumption 75

“Leaders can and should be able to perform a rational, objective diagnosis of a situation, setting aside their own cognitive biases and political pressures.”

Assumption 76

“The primary purpose of strategy is to solve a problem or overcome a challenge.”

Assumption 77

“Sustained, superior stock market performance is the most accurate and objective measure of corporate 'greatness.'”

Assumption 78

“The principles derived from studying large, US-based, publicly-traded corporations are universal and can be applied to any organization, including non-profits and governmental agencies.”

Assumption 79

“Greatness is primarily a result of internal factors and conscious choices, rather than external circumstances or luck.”

Assumption 80

“Rapid, quantitative testing is superior to other forms of strategy development, such as qualitative research or long-term brand building.”

Assumption 81

“The necessary data for analysis can be easily collected and unified.”

Assumption 82

“Organizations are willing and able to break down departmental silos to form cross-functional teams.”

Assumption 83

“Growth is the most important objective for a business, particularly in its early stages.”

Assumption 84

“Critical, probabilistic thinking leads to better business outcomes on average.”

Assumption 85

“Managers are capable of recognizing and overcoming the powerful cognitive biases (delusions) the book describes.”

Assumption 86

“Strategy and execution are the two primary, and largely separable, drivers of performance.”

Assumption 87

“Data sources like financial statements are 'objective,' whereas sources like press articles or interviews are 'subjective' and prone to Halos.”

Assumption 88

“All forms of work, including creative and managerial work, can be productively analyzed and improved by applying manufacturing/production principles.”

Assumption 89

“Rational, data-driven, and logical analysis is the superior method for solving business and managerial problems.”

Assumption 90

“The ultimate goal and measure of a manager is the output of their organization; other factors like employee happiness or personal relationships are means to that end, not ends in themselves.”

Assumption 91

“A merit-based, competitive environment is the most effective way to elicit peak performance.”

Assumption 92

“The Intel corporate culture, characterized by egalitarianism (partitions, not offices), constructive confrontation, and dual reporting, is a highly effective, if not superior, model for managing a modern technology company.”

Assumption 93

“User engagement and habit formation are the most important drivers of economic value for modern technology companies.”

Assumption 94

“Human behavior can be reliably engineered through a systematic, repeatable model.”

Assumption 95

“Negative emotions (pain, boredom, loneliness, fear) are the most powerful internal triggers for forming habits.”

Assumption 96

“Companies will have both the financial incentive and the ethical motivation to invest heavily in reskilling their workforce rather than simply automating jobs for cost savings.”

Assumption 97

“The complexity and ethical challenges of AI can be effectively managed through new human roles like 'sustainers' and 'explainers'.”

Assumption 98

“Workers will be willing and able to learn the new, often more abstract, 'fusion skills' required to collaborate with AI.”

Assumption 99

“Human behavior is largely reducible to a few universal psychological principles.”

Assumption 100

“The increasing complexity and pace of modern life necessitates a greater reliance on mental shortcuts.”

Assumption 101

“There is a clear distinction between ethical use and unethical exploitation of influence principles.”

Assumption 102

“Technological progress within a given paradigm follows a somewhat predictable trajectory of improvement over time.”

Assumption 103

“Firms (and their managers) are predominantly rational actors aiming to maximize profitability within their existing business models.”

Assumption 104

“The processes and values of successful firms become deeply embedded and resistant to change over time.”

Assumption 105

“Innovation is an inherent good, and its primary outputs (wealth generation, new products) are universally positive.”

Assumption 106

“The five discovery skills are equally applicable and valuable across all industries and contexts.”

Assumption 107

“Commercial success and market valuation are the most reliable indicators of innovative capability.”

Assumption 108

“Rational, profit-maximizing behavior is the dominant and predictable driver of managerial decisions in established firms.”

Assumption 109

“The pace of technological progress within a product class systematically outstrips the ability of customers in a given market tier to utilize it.”

Assumption 110

“Efficient capital markets price in expected future growth, creating a relentless pressure for managers to deliver *unexpected* growth to increase shareholder value.”

Assumption 111

“Strategy is primarily a rational, analytical exercise.”

Assumption 112

“The proper locus of strategy formulation is at the top of the organization.”

Assumption 113

“The corporation is the primary and stable unit of analysis.”

Assumption 114

“Economic and competitive factors are more important than 'human' factors.”

Assumption 115

“A rational, analytical, and systematic approach to marketing is superior to an intuitive or purely reactive one.”

Assumption 116

“Market share is a primary driver of long-term profitability, largely through the 'experience effect' which leads to lower costs.”

Assumption 117

“Managers within an organization are capable and willing to conduct the rigorous analysis required, and will do so objectively.”

Assumption 118

“It is possible to neatly separate 'objectives' (what) from 'strategies' (how) in a clear hierarchy.”

Assumption 119

“Agents are rational and aim to maximize their personal payoffs.”

Assumption 120

“The underlying network structure is static during dynamic processes.”

Assumption 121

“Simple models can capture the essence of complex real-world phenomena.”

Assumption 122

“There is common knowledge of the game's rules and players' rationality.”

Assumption 123

“The product already has at least a small group of 'super-happy customers' whose experience can be analyzed.”

Assumption 124

“The reader is in a B2B (business-to-business) context, often involving technology and a direct sales force.”

Assumption 125

“Positioning is a rational, team-based, strategic choice that can be determined in a workshop setting.”

Assumption 126

“The business leader (CEO, founder) is willing and able to lead the positioning exercise.”

Assumption 127

“A culture of psychological safety and rational problem-solving exists or can be easily created.”

Assumption 128

“Managers and employees possess the necessary skills for high-quality goal setting and alignment discussions.”

Assumption 129

“Partial decoupling from compensation is sufficient to foster ambition and prevent gaming the system.”

Assumption 130

“Complex business problems can be accurately represented by simplified mathematical models.”

Assumption 131

“The relationships between variables are linear (proportional and additive).”

Assumption 132

“Accurate and certain numerical data (costs, times, capacities) for the model is available.”

Assumption 133

“The primary goal of a for-profit enterprise is, or should be, to 'win,' defined as achieving market leadership and superior value creation relative to competitors.”

Assumption 134

“Strategic frameworks and lessons from the consumer packaged goods (CPG) industry are broadly applicable to most other industries.”

Assumption 135

“A structured, rational process can overcome ingrained organizational politics and cultural resistance to change.”

Assumption 136

“Coarse-graining reveals the essential truth of a system.”

Assumption 137

“Optimization is a dominant force in the evolution of complex systems.”

Assumption 138

“Socioeconomic activity can be modeled as a quantifiable flow.”

Assumption 139

“Publicly traded companies are representative of all businesses.”

Assumption 140

“Market participants (customers, competitors, incumbents) are fundamentally rational economic actors.”

Assumption 141

“The primary and overarching goal of a business strategy is to maximize fundamental shareholder value.”

Assumption 142

“In the absence of a Power, competitive forces will eventually arbitrage away all excess profits.”

Assumption 143

“The 7 Powers are an exhaustive list of the sources of durable competitive advantage.”

Assumption 144

“A co-located, multidisciplinary team with a Decider can effectively tackle any major business problem in just five days.”

Assumption 145

“A realistic-looking but non-functional 'façade' prototype is sufficient to get valid user feedback.”

Assumption 146

“The Decider's authority is the best mechanism for efficient and effective decision-making.”

Assumption 147

“Five users are always sufficient to reveal the most important patterns.”

Assumption 148

“A single, empowered 'Decider' is the most effective way to make business decisions under time pressure.”

Assumption 149

“A realistic-looking façade is sufficient to elicit genuine user reactions to a new product or service.”

Assumption 150

“Key team members and a Decider can realistically clear their calendars for an entire, uninterrupted week.”

Assumption 151

“An organization's WHY is singular, static, and established at its founding.”

Assumption 152

“Inspiration is inherently superior to and mutually exclusive from manipulation for long-term success.”

Assumption 153

“A simplified model of brain biology (limbic brain = WHY, neocortex = WHAT) provides a scientific basis for the Golden Circle.”

Assumption 154

“The target reader is the CEO or senior leader of a mid-market B2B company.”

Assumption 155

“Most mid-market companies are traditionally sales-led and have underdeveloped marketing functions.”

Assumption 156

“Best practices from large, well-resourced corporations like Xerox can be effectively 'right-sized' and applied to mid-market businesses.”

Assumption 157

“Pay is a powerful, primary driver of employee behavior and can be precisely tuned to achieve strategic objectives.”

Assumption 158

“Organizations possess, or can develop, a clear and stable business strategy that can be translated into specific, measurable behaviors to be rewarded.”

Assumption 159

“It is possible to accurately and fairly measure performance, whether at the individual, group, or organizational level.”

Assumption 160

“Managers and organizations will act rationally to create effective systems, even if it means changing established power structures or cultural norms.”

Assumption 161

“Maximizing the efficiency and utilization of every resource is necessary to be a low-cost producer and profitable.”

Assumption 162

“The 'cost' of a product can be accurately determined by summing material, direct labor, and an allocated overhead burden.”

Assumption 163

“Inventory is an asset and is recorded as such on the balance sheet.”

Assumption 164

“Entrepreneurs are (or can learn to be) rational actors who will make data-driven decisions to pivot or persevere.”

Assumption 165

“The cost and time required to build an MVP and run an experiment are relatively low.”

Assumption 166

“Early adopters are accessible and their feedback is a reliable indicator for future mainstream market success.”

Assumption 167

“The benefit of tractability outweighs the cost of sacrificing realism in a model.”

Assumption 168

“Mechanisms from one domain can be fruitfully applied as analogies to other, very different domains (the 'one-to-many' principle).”

Assumption 169

“A collection of simple, 'wrong' models can collectively produce a 'useful' or 'wise' understanding of a complex system.”

Assumption 170

“The CEO's primary and most important job is capital allocation, not operational management.”

Assumption 171

“Maximizing long-term shareholder value is the single, ultimate measure of a CEO's success.”

Assumption 172

“A rational, analytical approach is transferable and more critical than deep, industry-specific operational experience.”

Assumption 173

“Markets are frequently inefficient, creating significant discrepancies between a company's stock price and its intrinsic value.”

Assumption 174

“The principles of physical manufacturing, like Theory of Constraints and Lean, are directly applicable to the invisible, knowledge-based work of IT.”

Assumption 175

“A single individual (Brent) can be the primary, overarching bottleneck for an entire, complex IT organization.”

Assumption 176

“With sufficient executive sponsorship (from the CEO), rational process improvements and transparency can overcome deeply entrenched political dysfunction.”

Assumption 177

“Technology and process changes (like automated deployment pipelines) can be a primary driver of cultural change.”

Assumption 178

“The two-system model, while acknowledged as a metaphor, is a sufficiently accurate and powerful framework for explaining the vast majority of cognitive phenomena.”

Assumption 179

“Findings from highly controlled, often artificial, laboratory experiments (e.g., involving gambles for small stakes) generalize to complex, high-stakes, real-world decisions.”

Assumption 180

“A normatively 'correct' or 'rational' choice is one that would be made by a logically consistent agent (an Econ), and deviations from this standard are typically 'errors' or 'biases'.”

Assumption 181

“It is better to maximize the cumulative well-being of the 'experiencing self' than to satisfy the narrative preferences of the 'remembering self'.”

Assumption 182

“A hierarchical organizational structure is universally optimal for entrepreneurial businesses.”

Assumption 183

“Business growth is the primary and most desirable goal for all entrepreneurs.”

Assumption 184

“All key business functions can be neatly divided into Sales/Marketing, Operations, and Finance/Admin.”

Assumption 185

“Leaders will act rationally for the 'greater good' once provided with a clear system.”

Assumption 186

“All businesses, regardless of industry, size, or culture, are fundamentally the same and can be mastered by focusing on Six Key Components.”

Assumption 187

“A structured, disciplined, and logical approach is the primary solution to most business problems.”

Assumption 188

“Clear accountability and metrics will naturally lead to high performance.”

Assumption 189

“The leadership team is unified in its desire for disciplined growth and is willing to be vulnerable and make tough decisions.”