Charlie Munger, speaking at the 2000 annual meeting for Wesco Financial, explains:

There are two lines of thought … A whole bunch of management gurus say you need B-HAGs — bold, hairy, audacious goals. That’s a technique of management — to give the troops a goal that looks unattainable and flog them heavily. And according to that line of thought, you will do better chasing a B-HAG than you will a reasonable objective.

And there’s some logic in that — because if you tell your kid A-minuses are fine and he likes partying around the beer keg and can easily get A-minuses, you may well get a lower result than you would if you gave him a different goal.

Then there’s another group that says that if you make the goals unreasonable enough, human nature being what it is, people will cheat. And you see that in the public schools — where they say you’ve got to have the reading scores better so we’re going to pay the teachers based on the reading scores getting better. So the teachers start helping students cheat to pass the reading tests. So human nature being what it is, if the goals are unreasonable enough, you will cause some cheating in your corporation — or even within your top management.

Each organization has to find its own way.

I can’t solve that problem. There are two factors that are at war. You don’t want the cheating — which is bad long term and bad for the people who are doing the cheating. However, you do want to maximize the real performance. And the two techniques are at war.

What people generally do is give people the unreasonable goal and tell ’em, “You can’t cheat.” That’s basically the goal at General Electric. They say, “We don’t want any excuses. … But don’t cheat. … If you can’t handle those two messages, why, perhaps you’d be happier flourishing somewhere else.” That is the American system in many places.

I’ve got no answer to that tension. Low goals do cause lower performance and high goals increase the percentage of cheating. Each organization has to find its own way.

Still curious? Learn how to create effective incentive systems with Ken Iverson on the Principles that Unleash Human Potential

Produce More by Removing More: The Disciplined Pursuit of Essentialism

Aristotle talked about three kinds of work: theoretical, practical, and poetical. The first searches for truth. The second is practical with an objective around action. The third, however, is lost in our modern culture. The philosopher Martin Heidegger called this “bringing-forth.”

In his book Essentialism: The Disciplined Pursuit of Less, Greg McKeown describes this as an essentialist trait.

This is how the essentialist approaches execution: “An Essentialist produces more—brings forth more— by removing more instead of doing more.”

We rarely have the time to think through what we’re doing. And there is a lot of organizational pressure to be seen as doing something new.

The problem is that we think of execution in terms of addition rather than subtraction. The way to increase the production speed is to add more people. The way to get more sales is to add more salespeople. The way to do more, you need more — people, money, power. And there is a lot of evidence to support this type of thinking. At least, at first. Eventually, you add add add until your organization seeps with bureaucracy, slows to an inevitable crawl, centralizes even the smallest decisions, and loses market share. The road to hell is paved with good intentions with curbs of ego.

Rather than focusing on what to add, McKeown argues that we should focus on “constraints or obstacles” that need to be removed. It isn’t about adding, it’s about subtracting. I found this interesting to think about in the context of Ben Horowitz’s distinction between good and bad organizations.

But how can we re-orient around what to remove? Essentialism: The Disciplined Pursuit of Less offers three ways:

1. Be Clear About The Essential Intent

We can’t know what obstacles to remove until we are clear on the desired outcome. When we don’t know what we’re really trying to achieve, all change is arbitrary. So ask yourself, “How will we know when we are done?”

2. Identify the “Slowest Hiker”

Instead of just jumping into the project, take a few minutes to think. Ask yourself, “What are all the obstacles standing between me and getting this done?” and “What is keeping me from completing this?” Make a list of these obstacles. They might include: not having the information you need, your energy level, your desire for perfection. Prioritize the list using the question, “What is the obstacle that, if removed, would make the majority of other obstacles disappear?”

When identifying your “slowest hiker,” one important thing to keep in mind is that even activities that are “productive”— like doing research, or e-mailing people for information, or rewriting the report in order to get it perfect the first time around— can be obstacles. Remember, the desired goal is to get a draft of the report finished. Anything slowing down the execution of that goal should be questioned.

(The slowest hiker is a reference to Herbie in the business parable The Goal by Eliyahu Goldratt. More generally it can be thought of as the question what is keeping you back from achieving what you want? “By systematically identifying and removing this constraint,” McKeown writes, “you’ll be able to significantly reduce the friction keeping you from executing what is essential.”)

3. Remove the Obstacle

… The “slowest hiker” could even be another person— whether it’s a boss who won’t give the green light on a project, the finance department who won’t approve the budget, or a client who won’t sign on the dotted line. To reduce the friction with another person, apply the “catch more flies with honey” approach. Send him an e-mail, but instead of asking if he has done the work for you (which obviously he hasn’t), go and see him. Ask him, “What obstacles or bottlenecks are holding you back from achieving X, and how can I help remove these?” Instead of pestering him, offer sincerely to support him. You will get a warmer reply than you would by just e-mailing him another demand.

If you’re a manager or team lead, another thing starts to happen when you start removing obstacles. Not only does the output of the team increase but you’ll find that people like working with you a lot more.

Essentialism: The Disciplined Pursuit of Less will help you sift the signal from the noise and focus on what really matters.

Vincent van Gogh on Color

In a letter to his brother Theo, dated July 1882, found in Ever Yours: The Essential Letters, Vincent van Gogh describes how the simple few fundamentals combine into nearly endless permutations.

Absolute black doesn’t in fact occur. Like white, however, it’s present in almost every colour and forms the endless variety of greys — distinct in tone and strength. So that in nature one in fact sees nothing but these tones or strengths.

The 3 fundamental colours are red, yellow, blue, “composite” orange, green, purple.

From these are obtained the endless variations of grey by adding black and some white — red-grey, yellow-grey, blue-grey, green-grey, orange-grey, violet-grey.

It’s impossible to say how many different green-greys there are for example — the variation is infinite.

But the whole chemistry of colours is no more complicated than those simple few fundamentals. And a good understanding of them is worth more than 70 different shades of paint — given that more than 70 tones and strengths can be made with the 3 primary colours and white and black. The colourist is he who on seeing a colour in nature is able to analyze it coolly and say, for example, that green-grey is yellow with black and almost no blue, &c. In short, knowing how to make up the greys of nature on the palette.

By: Mohammad Ifrahim Butt.