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Entrepreneurs do exactly the opposite of what is taught in most management courses and business schools.
The problem in most hierarchical organizations is that the majority of the focus is on measuring explicit knowledge — things that are easily counted and quantified.
When people don’t have time to socialize and reflect, their knowledge ends up trapped in pockets and silos.
Another example of a small-world network is a shopping district, where each store is densely connected internally, because employees see each other every day, but loosely-connected with other stores — for example, because the owners meet once a month to discuss their shared interests in the maintenance and development of the district.
the most powerful person or organization in any network is one that has a high number of potential connections, all of which are relatively close and thus easily accessible, while at the same time enjoying a position within the network such that it can choose to block or grant access to other nodes.
More connections create more opportunities to bypass these control nodes, reducing the degree to which the control nodes can limit the flow of information and connection, thus limiting their power.
Network power is about detection and response, as well as the ability to influence the overall network itself.
Connected companies are living, learning networks that live within larger networks. Power in networks comes from awareness and influence, not control. Leaders must create an environment of clarity, trust, and shared purpose, while management focuses on designing and tuning the system that supports learning and performance.
The best executive is the one who has sense enough to pick good men to do what he wants done, and self-restraint to keep from meddling with them while they do it. — Theodore Roosevelt
Out of 1,000 crazy ideas, only 100 will merit a small-scale experiment. Of those, only 10 will be worth serious investment, and out of that bundle, only 1 or 2 will have the power to transform a business or spawn a new one.
Imagine what would happen to innovation in Silicon Valley if there were only one venture capital firm. It’s not unusual for a would-be entrepreneur to get turned down half a dozen times before finding a willing investor — yet in most companies, it takes only one nyet to kill a project stone dead.
If someone has an idea, they attempt to recruit another person to help them work on a prototype or to help convince others.
profit per employee at Valve is higher than Google, Amazon, and Microsoft.
The primary task of leadership is to communicate the vision and the values of an organization. Second, leaders must win support for the vision and the values they articulate. And third, leaders have to reinforce the vision and the values. — Frederick Smith
Leaders should focus on creating an environment of clarity, trust, and common purpose so members know what the company stands for and how it intends to fulfill its promise to customers. And then leaders should get out of the way.
“Management is doing things right. Leadership is doing the right things.”
The better your people, the better your performance will be.
As a leader, if you attract and hire good people in the first place, half of your leadership problems are solved right out of the gate.
The problem in many companies is that the workers in the company are insulated from these adaptive tensions. Many people just don’t feel them, and they don’t have any sense of urgency about them. The job of the leader is to bring these adaptive tensions front and center in the company to make them the topic of ongoing conversations,
Without diversity, there can be no mutation, no variation, no real learning. If everyone is the same, a network offers no real advantage.
As a senior leader, it’s all too easy to be blinded by past successes.
Reputations take a long time to build, but they can be destroyed overnight.
Principles are liberating, whereas policies are constraining. Principles are rules of thumb that can help people make decisions in all kinds of situations. Principles make use of human judgment. Policies, on the other hand, restrict and constrain and reduce the human element.
In the early days, Rackspace was organized by function, like most companies. Based on customer feedback, the company has reorganized into small, cross-functional pods made up of 10–12 people.
When principles are at the core of your competitive strategy, you must hire for attitude first. You can train people on skills, but you can’t train them on attitude. Employees must be a good fit. Hire for attitude, orient for values, and train for skills.
Life is like riding a bicycle — in order to keep your balance, you must keep moving. — Albert Einstein
when Apple first launched the iPhone, they did not plan to support outside developers right away. But within weeks of the iPhone’s launch, outside developers had hacked the iPhone and were developing apps.
the more efficiently you utilize resources, the longer the wait times will become. This is mathematically inevitable.
Google examined their expense policy and realized that enforcing the policy would cost more than the few people who abused it. So Google has no formal rules about expenses.
Second Life founder Philip Rosedale let employees distribute the company’s bonuses to each other. Here’s how it worked: each employee got a thousand dollars and had 24 hours to decide how to distribute that money to fellow employees. They could distribute it evenly or give the whole amount to a single worker. But it had to be anonymous, and they couldn’t give any money to themselves. He found that the money always was distributed in the most equitable way. Workers are good at recognizing value in their co-workers when given the chance.
Oscillating systems like this can be the most difficult to change.
Rules that people can keep in their heads are easier to follow and easier to share.
Not every idea should be implemented, but every idea should be heard and recognized.
History is a race between education and catastrophe. — H. G. Wells
Highly connected systems spread ideas faster, but they also spread viruses faster. Risky behavior in networks can have cascading effects that can’t always be anticipated in advance,
Too much freedom, and the network will lose cohesion and may overexpose the company to risk. Too little freedom, and you will defeat the purpose of distributing control, and pods will be unable to learn or innovate.
“When you do innovation in a large company, the immune system will come and attack you. A large company is basically an organism, and it has antibodies and an immune system, and those things will come and attack.”
Profits are not a purpose. They are a result. Profits accrue when a company consistently does a good job for customers, building relationships and loyalty.
You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life. — Steve Jobs
four ways your company can start that journey today: organic growth; top-down, leader-driven change; pilot pods; and network weaving.
She needed leaders who saw their roles as support, rather than control, and who could help individuals grow:
They ask less for functional expertise and started treating her group more like a strategic partner, asking for advice rather than demanding tasks.
A pilot is an experiment. A proof of concept is an experiment in which the conclusion is determined in advance. And as any scientist will tell you, if you already know the conclusion you want to reach, you will probably introduce bias into the experiment.
