The Diary of a CEO

I have watched many videos from this channel and to be honest I thought the book should be interesting to read:

Pillar 1: The self

1: Fill your 5 buckets in the right order: knowledge (what you know)-> skills (what you can do) -> network (who you know)-> resources (what you have) -> reputation (what they think of you).

You can’t pour from empty buckets.

These 5 buckets and order makes sense to me. It starts within you and then you can’t expand. You have your shit together? Then you can reach out. And the first two are the foundations and must be rock solid.

2: To master it, you must create an obligation to teach it

Based on the Feynman Technique, the author version: 1)Learn, 2) Teach it to a child, 3) Share it and 4) Review.

3: You must never disagree

Key factor for master communications, negotiations, conflicts, etc. Based on studies, disagreement “shuts down” part of your brain.

Even when you are right, if you want to reach to a positive outcome, listen to the other person and be sure he/she feels “heard” and then reply in a way that makes it feel “understood”. So build bridges and not walls. Disagree less, understand more.

4: You don’t get to choose what you believe.

Based on Daniel Kahneman, we dont have evidence from most of our important beliefs, we just trust our environment (family, tribe, etc) And it make sense, if I were born in somewhere else, I am sure I would have different beliefs.

So how to change a belief depends on: 1) Person’s current evidence 2) Their confidence in their current evidence 3) The new evidence 4) The confidence in that new evidence

So we can change belief if the new evidence sounds as good news and it is not a direct attack to the current one.

But thinking of yourself… to change your own-belief you need to get out of your comfort zone (where your existing evidence is believed), and get to the growth zone, where you can find new evidence for changing that believe: ie: afraid of talking to girls…. you will have to talk to one (not a million in one day), rinse and repeat.

Growth happens when you start doing the things you aren’t qualified to do.

5: You must lean in to bizarre behaviour:

“lean out” = being so arrogantly sure you are right that you refuse to listen/learn/read new info. This happens when something (a change) threats your status-quo = cognitive dissonance

So lean in, because change is only going to get faster.

lean-in: study and ask honest questions: why am I believing what i believe? Can be wrong? Do I understand (I am leaning out)? Am I following a trend?

“Shimon Peres solution” = hold two conflictive instances and resist the urge to force two things to make sense

For me this is a bit hard to swallow to be honest:

Don’t block people that you don’t agree with, follow more of them. Don’t run from ideas that make you uncomfortable, run towards them.

If you live avoiding risk, you are risking missing out on life (love, work, etc)

6: Ask, don’t tell.

Questions elicit an active response. They make people think. Use “Will you xxx?” for your questions and get to Yes/No. And this helps to make changes. “Will you go to dance tonight (alone)?” “Will you talk to talk to a girl?”

Ask questions of your actions, and your actions will answer

7: Never compromise your self-story:

You can’t quit when no one is watching (Chris Eubank Jr boxer)

Everything you do – with or without an audience – provides evidence to you about who you are and what you are capable of

You self-story and the mental toughness/grit/resilience that you have is more important than anything else for achieving your goals in business and life.

Choose to make the hard thing. Prove to yourself (in a thousand tiny ways, at every possible chance) that you have what it takes to overcome the challenges of life. If you do, you will have a robust, positive, evidence-based self-story.

8: Never fight a bad habit:

I need to read “Hooked” by Nir Eyal (I read already other book from him). So an habit loop consist of: 1) routine (actual behaviour), 2) cue: the trigger of the routine 3) reward: (result/impact of the routine)

So if you want to change a habit, you need want to change the cue and the reward. And figure it our which one it is. Make a change at the time (willpower is limited so use it wisely)

Your habits are your future (and your base for anything else)

9: Always prioritise your first foundation:

You only get one mind and one body… use/invest/care for them wisely

Pillar 2: The Story

This is very marketing/sales specific pillar. Our decisions are not driven by sense, they are driven by nonsense created by social cues, irrational fear and survival instincts.

10: Useless absurdity will define you more than useful practicalities

This mainly for marketing and reminds me to the pickup artists trying to differentiate from the rest of guys, or football players to tattoos, etc.

Your public story will be defined not by all the useful practical things that you do, in many cases, not even by the products that you sell, but by the useless absurdity that your brand is associated with.

I think that help at the beginning but still you need to have a good product, if not, that hype will wear off sooner or later. And this is not for the risk-averse people.

Normality is ignored. Absurdity sells.

11: Avoid wallpaper (neutral/blunt) at all costs:

Habituation: in-built neurological capability that helps us to focus on what matters and ignore the things that our brain doesn’t consider important (concentration camps, ghettos, etc)

Semantic satiation: Related to the above, the more something is repeated, the quicker lose its meaning. There are exceptions like terms related to survival.

Optimal level of exposure: Based on the above points, too much exposure reduces the attention but you need some to get some liking. So this is used in marketing, music businesses to get you.

In order to be heard, tell stories in an unrepetitive, unfiltered and unconventional way.

12: You must piss people off

Related to 11). Indifference (people dont love or hate you) is the least profitable outcome for a marketer. But be aware of the “wallpaper effect”

13: Shoot your psychological moonshots first

This is the scariest law of all as it is how we are manipulated by the big companies (ie Uber)

A psychological moonshot is a relatively small investment that drastically improves the perception of something.

So these are five of them:

Customers will judge their entire experience on just two moments: the best (or worst) part and the end (driver kindness).

Idleness aversion: Keeping waiting customer busy by giving them something to watch or engage with, they would be significantly happier and less likely to cancel.

Operational transparency: explain each step going on behind the scenes to show the rate of progress during the wait.

Uncertainty anxiety: Customers dont want faster delivery, they want less uncertainty about the delivery. It is less stressful psychologically to know something negative is going to happen (pizza delayed 30 minutes) than to be left in uncertainty (no idea when the pizza is coming)

Goal-gradient effect: Speeding up near the finish lane. What motivates us most is how close we are to achieving a goal: we work faster the closer we are to success (ie. cafe’s reward programs, linkedin profile, etc)

It is nearly always cheaper, easier and more effective to invest in perception than reality.

Biggest progress in the next 50 years won’t come from improvements in technology, but in psychology and design thinking.

Invest in shaping perceptions. Our truth is the story we choose to believe.

A lot of references to Rory Sutherland.

Another example of Moonshot is the ordering screens from McDonals, reported to increase sales 10% and customer satisfaction without changing anything else.

14: Friction can create value

Sometimes your customers will want your product more if you make their experience at certain level, worse (ie: Cocacola (sweet) vs redbul (bitter but give you wings… search engine taking some time but showing what is doing.. cook your meat in a stone) Making things easier isn’t necessarily the path to a psychological moonshot (law 13)

Value doesn’t exist. It’s a perception we reach with expectations we meet.

15: The frame matters more than the picture:

Framing: How something is framed affects how consumers perceive and value the brand (iphone, luxury clothing, etc) Reality is nothing more than perception and context is king. Context creates THE value

16: Use Goldilocks to your advantage

Goldilocks is a type of anchoring: cognitive bias where individuals rely too heavily on seemingly irrelevant information (anchor) when making a decision: ie presenting two extreme options next to the option you want to sell (properties, flight tickets (economy, standard, premium), etc) = Never show people only one option.

17: Let them try and they will buy

Based on “endowment effect”: cognitive bias that causes people to overvalue an item simply because they own it, regardless of its objective value (Apple stores)

18: Fight for the first 5 sec

For the author, this is the most important part of his marketing company success: we told the most captivating, surprising and emotional stories.

When a storyteller understands that absolutely nobody cares about them as much as they do, they tell captivating, emotional, punchy stories that you have no choice than paying attention.

In a world where our attention spans is shrinking, attention might just be the most generous gift that anyone can give.

Pillar 3: The Philosophy

19: You must sweat the small stuff

The easiest way to do big things is by focusing in the small things (that others ignore). The base here is “kaizen” = continuous improvement (Toyota) But this is not an overnight success, it takes time (a lot), investment (ideas coach) and belief. But dont pay for creating suggestions, if you attach a financial reward to ideas, it can eliminate people’s genuine creative energy and ambition. And when a hobby becomes a job, motivation drops (being a baker???)

20: A small miss now creates a big miss later

Related to the above but in the negative way. +1% improvement compounds a lot in the long rung, but -1% does too. And the idea is keizen is not just for business, you can use it in your personal and sentimental life.

Pursuit of perfection is a matter of discipline, not heroism.

21: You must out-fail the competition

From the world of IT, this is the new normal. Fail fast and often.

From my lovely JB: Failure and invention are inseparable twins. To invent you have to experiment. Big winners pay for so many experiments (kind of investing I guess)

The biggest cost is not failing, it is missing an opportunity to grow and wasting time to learn a new lesson regardless of the outcome.

Get to the 51% certainty and make the decision. Perfect decisions exist only in hindsight. The real cost of indecision in business is wasted time, that could have been used failing your way to knowledge.

Ideas to introduce this pro-failure culture: 1) Remove bureaucracy: small teams, with authority, trust, resources and no sign-offs 2) Fix the incentives: words need evidence, incentives and examples to bring them to life (you need to prove that you want to implement a pro-failure culture) 3) Promote and fire: clear, people who play ball with the culture, promote. The mood-hoovers, out. 4) Measure accurately: establish visible KPI and clear goals and make everybody responsible. 5) Share the failure: evident

22: You must become a Plan-A thinker

Maybe you should put all your eggs in one basket. Having a back-up plan has been shown to potentially hinder your performance by making your less driven to hit your primary goal.

Yes, this can ge difficult to swallow. But being risky doesnt mean being reckless.

23: Don’t be an ostrich = don’t hid from Problems/Reality in business and life.

We are motivated (too) by avoiding discomfort. Most people dont want to acknowledge that uncomfortable truth that distraction is always an unhealthy escape from reality.

Pain in life is unavoidable, but the pain that we create by trying to avoid pain is avoidable.

How to deal with discomfort and avoiding procrastination: 1) pause and acknowledge (that something is not right). 2) review yourself: feelings, behaviour and emotions. 3) speak your truth: talking about our disconnections, create more connectedness. 4) seek the truth: listen to understand.

When you refuse to accept an uncomfortable truth, you are choosing to accept an uncomfortable future.

24: You must make pressure your privilege

This is another pill difficult to swallow, but I get the point. Pressure can be good if it is at certain level and your relationship with it. It is like the tension for that exam, futsal game, combat, etc. There is where you grow and show your value. As well, too much comfort, is not good for your mind, body and emotions. I dont want a job that stress me out everyday, where I lose sleep, appetite, joy of sport, etc. I want to improve and like building muscle or learning anything you need to put effort and that needs some kind of pressure on it. If you believe stress is all bad, then it will be bad. If you find value, you grow (and survive). And to be clear, pressure as privilege is when it is viewed as something voluntary, meaningful and high autonomy. The contrary: compulsory, meaningless and low autonomy is psychological pain.

So how to make your pressure your privilege: 1) see it: dont deny it, acknowledge it. 2) share it: it is a way to create resilience. 3) frame it: recognize the positive role and powerful signal it represents. 4) use it: dont fight it, use it.

If you are looking for growth, choose the challenge.

25: The power of negative manifestation:

Key question: “Why will this idea fail?” This fight the following bias: 1) Optimism bias: you focus only in good things and ignore bad ones 2) confirmation bias: you only pay attention to information that supports your ideas. 3) self-serving bias: it leads us to believe that our success or failure is a result of our own skill and effort. 4) sunk-cost fallacy bias: this makes us stick with a decision – even when evidence suggest that is was a bad one. The is the law to know to cut your loses short. 5) groupthinking bias: this prevents a group fro asking “why will this fail?” because they dont want to disagree with the group.

Similar technique is the “pre-morten” analysis: thinking of failures before a project has started. This is different from “what could go wrong?” How to setup this: 1) set the state: gather relevant team members and explain the goal of this analysis 2) fast-forward to failure: imagine a failed scenario with all its details 3) brainstorm reasons for failure: each one individually and on paper. 4) share and discuss: foster an open and non-judgemental discussion. 5) develop contingency plans: based on identified risks and challenges.

You can apply this not just to business: career path, partner and investing.

26: Your skills are worthless, but your context is valuable

Lessons: 1) our skills hold no intrinsic value: value is what someone is willing to pay. 2) The value of any skill is determined by the context in which it is required (amen). 3) The perception of a skill’s rarity influences how much people value it 4) people will asses the worth of your skill based on how much value they believe it can generate for them.

27: The discipline equation: death, time and discipline

We have a limited time, acknowledge your mortality, then you can prioritise what truly matters.

Discipline is the ongoing commitment to pursuing a goal, independent of motivation fluctuations, by consistently exercising self-control, delayed gratification and perseverance.

discipline = value of the goal + reward of pursuing – cost of pursuing.

We don’t have to be smarter than the rest. We have to be more disciplined than the rest.

Warren Buffet

Pillar 4: The Team

28: Ask who, not how

Richard Branson, dyslexic, created business with $24B annual sales. “I am just good with people. Being dyslexic. I had no choice but to delegate”

“I’ve long given up hope of becoming an expert in the things I am not good at” you find who is the best for that and you focus in your best. Everybody wins.

Every company is simply a recruitment company (the CEO can’t do everything well)

Your ego will insist that you do. Your potential will insist that you delegate.

But if you are the last link in the chain????

29: Create a cult mentality

This one touched a fiber on me… I can’t tolerate companies that try to brainwash you with their culture. But I get the point for this law.

In my first job, I enjoyed the team, we had our culture, although our management and company culture were horrendous.

And honestly, this is what I am looking for in a job. I had a bit for a bit in my longest spell, because the CTO was the smartest guy I ever met and he set the bar for everybody else.

The most important decision you will make when you create a company is hiring the first ten people.

Steve Jobs: Just get A players. Then they will only want A players, etc etc

Ingredients of a cult: 1) Sense of community and belonging. 2) Shared vision. 3) An inspirational leader. 4) An “us vs them” mentality.

But, cults are not sustainable long term. So create a culture that is sustainable: 1) people are authentically engaged 2) with a mission they care about 3) trusted with a high degree of autonomy 4) sufficiently challenged in their work 5) given a sense of forward motion and progress and 6) surrounded by a caring, supportive group of people that they love to work with.

30: The three bars for building great teams

They are: fire, hire and train. Fire the bar lowers, hire/promote bar raisers, train the rest.

Hesitating to fire someone that is negative for the company, can be the biggest regret in a business. Nobody is above the “culture/team” (Sir Alex Ferguson at MU)

The definition of the word “company” is just a group of people.

31: Leverage the power of progress

Based on Sir David Brailsford’s theory of “marginal gains” for British Cycling team.

People want a feeling of progression, and if we aim for perfection, we will fail, because perfection is so far away

it is quite easy to make small incremental changes and make them stick (atomic habits) and that produces leverage.

The key to overcoming that discomfort and preventing procrastination is to split the task into easy, achievable micro-goals (I feel that)

How to create the perspective of progress: 1) create meaning 2) set clear and actionable goals 3) providing autonomy 4) removing friction 5) broadcasting the progress

32: You must be an inconsistent leader

Every person is different so you need to be able to treat each one in a different way (motivation wise) (ie Sir Alex Ferguson again, he was a emotional savant) So one-size-fits-all, doesnt work.

Great leaders are fluid, flexible and full of fluctuation. They are whatever shape they need to be to complete your motivation.

33: Learning never ends:

This is cristal clear. Keep learning, keep growing and be happy.