Reality Check by Guy KawasakiNotable passages from
Reality Check by Guy Kawasaki

Portfolio, New York, 2008

"The Banality of Heroism"

Instead of pursuing professional entrepreneurs, we should figure out how and why ordinary people can do heroic things. Dr. Philip Zimbardo of Stanford University and Zeno Franco of the Pacific Graduate School of Psychology wrote an article called "The Banality of Heroism" (Google "Banality of Heroism" to find it) about this very subject.
   The short explanation is that heroism requires the presence of a "heroic imagination," which the authors describe as " the capacity to imagine facing physically or socially risky situations, to struggle with the hypothetical problems these situations generate, and to consider one's actions and the consequences." According to Zimbardo and Franco, heroes do five things:

  1. Maintain constant vigilance for situations that require heroic action.
  2. Learn not to fear conflict because you took a stand.
  3. Imagine alternative future scenarios beyond the present moment.
  4. Resist the urge to rationalize and justify inaction.
  5. Trust that people will appreciate heroic (and frequently unpopular) actions.


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   There are a lot of guys and gals inside established companies who are as innovative and revolutionary as their bootstrapping, soy-sauce-and-rice-subsisting, external entrepreneur counterparts. This chapter is for these brave souls, who face a different kind of reality and must practice the art of entrepreneurship inside a company—or "intrapreneurship."

   They have to pick "good enough" over "best possible." Most customers don't care about being at the bleeding edge of technology and are happy if something simply works dependably. Computer operating systems, for example, fit in this category.


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[From an interview with Michael Raynor, author of The Strategy Paradox: Why Committing to Success Leads to Failure (and What to Do About It).]

Q: What's the proper role in strategy formation for each level in a hierarchy?
A: I've found that it helps to think about strategy in two halves: the commitments that all successful strategies entail, and the uncertainties attendant to those commitments. Commitments and uncertainties are only half the answer. The rest of the solution lies in calibrating the focus of each level of the hierarchy to the uncertainties it faces. It is common sense—if not common practice—that the more senior levels of a hierarchy should be focused on longer time horizons. What hasn't been as widely recognized is that with longer time horizons come greater levels of uncertainty, and strategic uncertainty in particular. This fact has some profound implications for how each level in an organization should act.
   Board members should ask: What is the appropriate level of strategic risk for a firm to take? What resources should be devoted to mitigating risk? What sacrifices in performance are acceptable in exchange for lower strategic risk? This allows the board to be involved in strategy without getting involved in strategy making, which is correctly the purview of the seniour management team.
   CEOs should ask: What strategic uncertainties does the company face? What strategic options are needed to cope with those uncertainties? In other words, it falls to the CEO, and the rest of the senior team, to find ways to create the strategic-risk profile the board has mandated for the firm.
   Divisional or business-unit vice presidents should ask: What commitments should we make in order to achieve our performance targets? For these folks, it's no longer about mitigating strategic risks, but making strategic commitments. Someone has to take the actions that create wealth, after all.
   Managers should ask: How can we best execute the commitments that have been made in order to achieve our performance targets? To put it on a bumper sticker, they have to "show us the money." There are no strategic choices to make at this level, because the time horizons are too short—six to twenty-four months. Strategies simply can't change that fast.

   This is what I've learned from this interview. First, I'm not so smart if a company that I invest in succeeds. Second, I'm not so dumb if a company that I invest in fails. Third, you take your best shot at analysis, place your bet on the table, work your ass off, and don't look back. That's how you build a great company.


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   The more relevant and important reason to write a business plan, even if you're not raising money, is to force the management team to solidify the objectives (what), strategies (how), and tactics (when, where, who).


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The Art of Execution

  • Create something worth executing.
  • Set goals:
    • Measurable. "What gets measured gets done." [Y]ou can't (and shouldn't) measure everything. Three to five goals measured on a weekly basis are plenty.
    • Achievable. Take your "conservative" forecasts for these goals and multiply them by 10 percent; then use that as your goal.
    • Relevant.
    • Rathole resistant. Ensure that your goal encompasses all the factors that will make your organization viable.
  • Postpone, or at least de-emphasize, touchy-feely goals. [C]ompanies that reach on measurable goals are happy. Those that don't, aren't.
  • Communicate the goals. Employees should wake up in the morning thinking about how they're going to help achieve these goals.
  • Establish a single point of responsibility.
  • Follow through on an issue until it is done or irrelevant.
  • Reward the achievers.
  • Establish a culture of execution.
  • Heed your Morpheus. Cold, brutal reality is the ally of execution, so find a Morpheus who distributes the red pills and enables employees to see things as they really are.


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   Innovation is … the act that endows resources with a new capacity to create wealth.
   – Peter Drucker


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The Art of Innovation

  1. Build something that you want to use.
  2. Make meaning.
  3. Jump to the next curve.

   [Companies] must remember that the purpose of innovation is not cool products and cool technologies but happy people.

Pages 119 - 122.


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   Satisficing. Ever wonder why some solutions lack inspiration, imagination, and originality? It's because by nature we satisfice (satisfy plus suffice). We glom on to what's easy and stop looking for the optimal solution. What's the least number of "sticks" you need to move to make this Roman numeral equation correct? XI + I = X. If you answered anything but zero, you satisficed. Look at it upside down.


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   Belief in myths allows the comfort of opinion without the discomfort of thought.
   – John F. Kennedy


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