A friend of mine forwarded below today - I thought it's fantastic and hope you'll like it, too.
Tri
Written By Regina Brett, 90 years old, of The Plain Dealer, Cleveland , Ohio
To celebrate growing older, I once wrote the 45 lessons life taught me.
1. Life isn't fair, but it's still good.
2. When in doubt, just take the next small step.
3. Life is too short to waste time hating anyone.
4. Your job won't take care of you when you are sick. Your friends and parents will. Stay in touch.
5. Pay off your credit cards every month.
6. You don't have to win every argument. Agree to disagree.
7. Cry with someone. It's more healing than crying alone.
8. It's OK to get angry with God. He can take it.
9. Save for retirement starting with your first paycheck.
10. When it comes to chocolate, resistance is futile.
11. Make peace with your past so it won't screw up the present.
12. It's OK to let your children see you cry.
13. Don't compare your life to others. You have no idea what their journey is all about.
14. If a relationship has to be a secret, you shouldn't be in it.
15. Everything can change in the blink of an eye. But don't worry; God never blinks.
16. Take a deep breath. It calms the mind.
17. Get rid of anything that isn't useful, beautiful or joyful.
18. Whatever doesn't kill you really does make you stronger.
19. It's never too late to have a happy childhood. But the second one is up to you and no one else.
20. When it comes to going after what you love in life, don't take no for an answer.
21. Burn the candles, use the nice sheets, wear the fancy lingerie. Don't save it for a special occasion... Today is special.
22. Over prepare, then go with the flow.
23. Be eccentric now. Don't wait for old age to wear purple.
24. The most important sex organ is the brain.
25. No one is in charge of your happiness but you.
26. Frame every so-called disaster with these words 'In five years, will this matter?'
27 Always choose life.
28. Forgive everyone everything.
29. What other people think of you is none of your business.
30. Time heals almost everything. Give time time.
31. However good or bad a situation is, it will change.
32. Don't take yourself so seriously. No one else does.
33. Believe in miracles.
34. God loves you because of who God is, not because of anything you did or didn't do.
35. Don't audit life. Show up and make the most of it now.
36. Growing old beats the alternative -- dying young.
37. Your children get only one childhood.
38. All that truly matters in the end is that you loved.
39. Get outside every day. Miracles are waiting everywhere.
40. If we all threw our problems in a pile and saw everyone else's, we'd grab ours back.
41. Envy is a waste of time. You already have all you need.
42. The best is yet to come.
43. No matter how you feel, get up, dress up and show up.
44. Yield.
45. Life isn't tied with a bow, but it's still a gift.
Sunday, July 5, 2009
Key Points from Trevor Eastwood's Biography
I met Trevor Eastwood at UWA Business School last Sunday. Trevor Eastwood was the former CEO, board member and Chairman of the board of Wesfarmers Ltd. Under his leadership as CEO, the market capitalisation of Wesfarmers rose from $27 million in 1983 to $1 billion in 1994 when he stepped down for Michael Chaney to take over, which corresponded to approximately 40% compound annual growth rate of return.Please find below the key points summarised from Trevor Eastwood's new biography entitled "The CEO, the Chairman and the Board - Trevor Eastwood" by Rosemary Sayer:
On the benefit of studying engineering on solving business problems (p. 39 - 40): "Eastwood feels keenly that engineering gave him a stronger foundation in business principles because it was all about problem-solving. Formally defining the problem - which isn't always what you first think - writing it down and designing a solution through a logical process, are a set of skills everyone should have ... He laments that problem-solving as a discipline doesn't play a big enough role in today's educational syllabus."
On where to start one's career (p. 46): "The deep end is the only place to start."
On negotiation protocol (p. 74, 121): "But Eastwood made a mistake he was never to make again in his career: going into a negotiation on his own. Still feeling the need to prove himself ... Eastwood thought it would have been seen as a sign of weakness to take someone along. ... He found himself negotiating with several members of the Smorgon family at the same time.... Eastwood made it a rule [to] never to get too closely involved... If the ultimate decision-maker is involved heavily in the negotiation, there is the risk that spent emotion and effort increases the urge to win at any cost."
On how he first arrived at his key insight on what makes a great company (p. 79-80): "[Eastwood] also undertook a major study of the top 100 companies on the Australian Stock Exchange to understand why successful businesses made money and grew when others did not. ... he concluded that ... the single most common characteristic of successful companies was a high return on shareholder funds, regardless of the complexity of the business model. This simple conclusion was to have a profound effect on Eastwood's thinking and on Wesfarmers' success in years to come."
On the need to be able to measure return on shareholder funds of company's divisions (p. 84): "In a diverse range of businesses it was important to know where the company was making money, and whether it was achieving an acceptable return on investment. To implement a system that measured investment performance, each business unit needed a separate balance sheet."
On the need to have good people around you (p. 89): "There's something very special about working with the best and the brightest people every day. Wesfarmers has been able to attract and retain these people."
On applying the common measure and objective of superior return on equity to manage businesses (p. 113-114): "1. If your business is currently operating above our satisfactory hurdle rate for return on capital [25 per cent EBIT to capital], you are to develop a plan to grow your business as quickly as possible subject to new investment meeting our investment criteria. 2. If your business is currently operating below our satisfactory performance hurdle [20-25 per cent EBIT to capital], you are to develop a plan to improve your return on capital that may or may not include additional investment. 3. If your business is below our minimal rate of return [<20>On managing the divisions after the key measures (see above) are in place (p. 116): "Under Eastwood style of leadership, Wesfarmers' divisional chief executives were given absolute authority to run their business units with very little interference from corporate management. However, they could expect very close scrutiny... if they were not meeting their performance targets."
On business development (p. 120, 122): "...its active new projects list was long, so the process of assessing an acquisition or investment was an important feature of this growth and success. ... only if it was passed unanimously by them [project leader, CEO and CFO] would a paper be prepared for the board.... For every project that was approved, many were reviewed and turned down. Some were rejected outright at an early stage, some did not interest the company, some did not meet its financial criteria and some just did not work out as planned."
On key mistakes he made (p. 159-160): "The 1987 acquisition of Charlie Carter supermarket chain in Perth was one of the major mistakes he made as CEO of Wesfarmers... Wesfarmers was not in a position to scale up and meet the competition. ... Wesfarmers ran Charlie Carters into the ground." "Eastwood concedes he made mistakes by keeping people who weren't up to their jobs for too long. In hindsight, it was usually for all the wrong reasons, like misplaced loyalty to a person, or because they had served the firm for a long time. ... [Eastwood said,] 'If the decision is made to terminate someone, I have learnt it is wise to get on with it quickly.'"
And from his talk at UWA Business School on Sunday, 3 May 2009:
On the importance of getting good people: "If you find a good person, don't wait until you have a position in your company, get him or her first and CREATE a position."
On what businesses to acquire: "You have to be able to add value, as you would be paying market price. Otherwise, it has to be significantly cheap."
Why has Warren Buffett been Successful? - Charlie Munger explained
As some of you know, I am a big fan of Warren Buffett. But what most of you don’t know is that, I am actually a bigger fan of his partner, Charlie Munger (pictured on the left). Unlike Buffett, who is very much genetically focused only on stockpicking and business, Munger has an ultra-wide range of interests: psychology, business, physics, law (he was founder of the famed Californian legal firm, Munger, Tolles & Olson), mathematics, biology, geology, anthropology, and so on. The guy is a mental encyclopaedia.Buffett described Munger as “the best 30-second mind in the world.” Buffett said, “If I call Charlie and describe a business situation I will get a better answer from him in 30 seconds than I could get from anybody in the world.”
I was reading the transcript of Wesco’s 2007 annual meeting where Charlie Munger held court. It was fascinating! Before fielding shareholders’ questions, he shared his thoughts on why Warren Buffett has been so unusually successful. And I’d like to share with you some of the things he said.
Munger said, “Why did one man, starting with nothing and having no credibility, end up over the years with five or six of the remaining triple-A credit ratings left on earth and this ridiculous collection of assets? … It’s a very extreme result.” Munger said that there were a lot of factors working in the same, positive direction - “Really extreme results,” he said, “almost always come from a confluence of factors acting in the same direction.”
First of all, Munger said that Warren Buffett is “a seriously smart human being.” But, Munger emphasised, being smart would not have been enough to reach Buffett’s success.
The second factor was that Buffett has always been “extremely intensely interested” in the subject at which he has achieved so much. This is related to the intense 10,000 hour rule that Gladwell talked about in his book “Outliers” (which I summarised in the previous note/blog). Sir William Osler once said, “It’s very hard to succeed in something unless you take the first step - which is to become very interested in it.” That’s why I always tell friends / staff / students, “You have to do what you LOVE!!” Maybe I should change that to: “You have to do what you REALLY LOVE!!”
The third factor was that Warren got a very early start. Warren has started dabbling in business since he was 6 and the stockmarket since he was 11. Start young in an area you would like to be successful in and put in your 10,000 hours practice!
The fourth factor - “and this is really crucial,” Munger said - is that Warren is one of the best learning machines on earth. He just keeps learning and learning. He goes to sleep each day wiser compared to when he woke up that morning. Munger explained, “When you stop learning in a competitive world, why, the world just goes right by you.”
The fifth factor was that the work at Berkshire Hathaway was always heavily concentrated in one mind, Warren Buffett’s. Munger explained that it’s hard to find a committee that’s been successful at investing or in business. The great basketball coach John Wooden improved his record fairly late in his life when he became less egalitarian: He just made sure that the BEST 6 or 7 players have court time all the time and the bottom 5 or so players don’t get to play at all in games. This concentrates experience, knowledge and learning on the top players. And of course, they will improve with experience. It was the same with Buffett: Berkshire Hathaway’s decisions have been made by its best decision-maker over a long period of time.
The sixth factor is that Buffett does not dwell in any form of self-pity. A lot of people in the world dwells in self-pity. “Oh, look at me… look at my situation… it’s my ex-husband’s fault… it’s my boss’ fault… I feel so bad because this happened.” Buffett would have none of that. Munger was more blatant than that, “Nothing is more STUPID than ever thinking the world has been unfair to you. If your child’s dying of cancer, it’s not unfair. It’s never unfair. It’s totally nonproductive to get those ideas. They’re the worst.” Every tough moment in life, Munger emphasised, should be taken as an opportunity - an opportunity to grow, an opportunity to learn, an opportunity to display courage and fortitude.
The seventh factor that led to Buffett’s success is that Buffett also does not have any inklings of envy, jealousy or revenge. Buffett does not hold grudges against people who have wronged him.
The eighth factor is that, Buffett does not hold any extreme ideologies or beliefs. Munger said that any loyalty to extreme ideologies or beliefs can destroy cognition. Examples of extreme ideologies include: "people of a certain race must be bad", "the labour party always makes businesses suffer", "there's no true religion except for my religion", "the best way to succeed in business is cut costs as much as possible - there's no other way." ... and so on - you get the picture, right? The best quote in my opinion that relates to this came from Star Wars Episode 3 - Revenge of the Sith: "Only a Sith deals in ABSOLUTES."
So to summarise: According to Munger, Warren Buffett’s success have been driven by a combination of factors working in the same direction for a very long time. Yes, Warren is smart. But he also intensely loves what he is doing and he started very young and practiced it a lot. All work at Berkshire Hathaway has been concentrated on him as he is the best decision-maker in the company. And he avoids any form of self-pity, envy, jealousy, revenge and extreme ideologies.
In short, Munger said, “you’ll find Warren is a very objective person. So the maximization of objectivity is very much part of making a record like Warren’s.”
Hope this has been helpful for you.
You should read "Outliers - the Story of Success"!!
I just finished reading Malcolm Gladwell's latest book, "Outliers - the Story of Success". I love it! So much so that I decided to share with you some of its content.Gladwell's easy-flowing writing style reminds me of his style in his earlier books, "The Tipping Point" and "Blink". I thought "The Tipping Point", a book on social epidemic, was AWESOME. If you have not read it, I suggest that you should! You will learn a lot from reading it.
For instance, at the beginning of the book, he showed that the best Canadian ice hockey players were mostly born in January, February or March. Why was this? He found that the Canadian ice hockey season started in January every year (making Jan 1st as the cutoff date for selection) - so if you are a good & young player, you have a better chance to be selected for better training (and better boost for confidence etc. etc. in a virtuous circle) compared to your peers in the same age group. That would lead to many young players born in the second half of the year not being selected from a very young age - this is just part of the system!
In international soccer, the cutoff date for selection used to be August 1, and there were significantly more players at world championship level which were born in the three months after August 1 compared to those born in May, June and July!! Insane, isn't it??
Just in case you are wondering, I was born on January 4th. I always felt that I was one of the oldest in my peer group.
The second factor Gladwell outlined which led to success is what he termed "The 10,000 hours rule". In one chapter, he outlined a study of how the best world-class violin players put in more than 10,000 hours of solid practice compared to much less numbers for more average violin players. He also discussed how people like Bill Gates and the Beatles had to put more than 10,000 hours of practice to reach a great level of proficiencies in their field. It took Mozart more than 10 years before he started composing outstanding pieces of music (when he was 21).
So.... there is no way around it. Nothing beats intense focus and hard work in your area if you want to be successful in it!! It doesn't matter whether it is music, sports, business, cooking, anything - you have to spend a lot of time practicing it.... 10,000 hours! "Intensity is the price of excellence," Warren Buffett once said.
Gladwell also showed how too much holidays in the high-school education system could create 'mental retardation' compared to more intense studying regime throughout the holidays. He showed some very interesting results - I won't spoil it here.
Thirdly, he showed that the year you were born could play a role in you becoming an outlier (in the successful sense). He showed that many leaders in IT, such as Gates and Steve Jobs (who invented Apple and Ipod), were born between 1953 and 1955. This was because when they hit the age of 18 - 20, they were exposed to the revolution in computers in the early 1970s that made faster programming possible.
Also, a disproportionate number of the richest men in the world (of all time - after adjustment for inflation) were born in the 1830s. This was because in the 1860s and 1870s, the American economy and industry went through a great economic transformation.
So the year you were born can matter to your chance of becoming very successful economically!
The fourth factor he discussed was IQ, but not in the traditional sense. Above a certain threshold (around IQ = 120), the chance of success is not increased by increasing IQ. So, somebody with an IQ of 200 does not have a better chance to become more successful than somebody with an IQ of 130.
The fifth factor he discussed was how it was not just IQ that could lead to success, but also (using my term now) the need for 'HUSTLE'. This is the ability to negotiate and work with people and talk your way into getting what you want. Here he also described how parental upbringing contributed to this: it was found that children of more well-to-do families on average tend to be more assertive (or have more 'hustle factor') compared to children from poorer families.
The sixth factor he discussed was how the race, background and situation of your parents and grandparents could shape your destiny. This was why many great corporate lawyers in the 70s and 80s, such as Joe Flom, were born in the early 1930s and were Jewish.
The last group of factors he discussed was your ethnic origin could lead to your chance of success and failure. For instance, why did Korean Air become one of the most unsafe airlines in the history of aviation (before it finally got its act together in 2001)? Why did Asian kids seem to be extremely good at maths compared to their non-Asian peers? I won't spoil it by telling you the answers.
So all of these in combination could lead to one becoming a successful 'outlier'. Yes, of course you need a good IQ, and some personality to work with people and 'hustle' when need be. And yes, you will need supporting parents and family to enable you to put in the 10,000 intense hours necessary to master your art or calling. But there are a myriad of external factors that can propel you toward opportunities to reach success - the so called factors of 'luck': when you were born, which month you were born, and which family and what ethnic background you came from.
I find this an enjoyable book to read - very refreshing and like many other good books, it really makes you think!! Hope you will enjoy reading it, too.
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