2 minute read
Chattanooga, TN
This Latin term for “unknown land” was used by ancient mapmakers for labeling undiscovered territories, or regions that had not been mapped or documented, or were merely inaccessible to ordinary men. (Another common term for unknown land at that time was “Dragons Be Here!"). Could that description be apt for the external landscape that Owner-Managers face today?
In our world filled with uncertainty, as Owner-Managers of entrepreneurial businesses we persist in allocating the majority of our waking hours as Managers, not as Owners. As Managers, one cares mostly about the frequency of correctness of current decisions. Managers see the positive feedback they get from making lots of decisions correctly, almost regardless of magnitude. Most management decisions have simple linear outcomes.
As Owners, what matters most is the magnitude of decisions and less the frequency of being correct. Owners are more affected by the magnitude of the outcomes of decisions as we regard values like legacy, future of stakeholders, need for accumulation of capital, and ultimately, Enterprise Value (EV). Most ownership decisions will result in complex non-linear outcomes. For Owners, it is the magnitude of the outcomes that will impact Legacy or Enterprise Value, or both.
Kahneman & Tversky argued persuasively that humans are generally a lot happier when we are right "frequently" without regard to the magnitude of the outcome. Yet being right frequently does not correlate with Enterprise Value outperforming in the Entrepreneur Owner-Manager (EOM) world. The number of times that we are correct does not determine our performance as an Owner; it is the magnitude of the change that translates into value. Just a few decisions will have a disproportionate affect on value, vastly more than “batting average.”
Don’t get us wrong, we appreciate management; and good management is better than bad management. It’s just that the many decisions in the management domain have generally smaller consequences on EV than the few in the Owners’ domain.
In our roles as EOMs, do we challenge ourselves beyond our comfort zones as Managers; past the comforting frequency of good day-to-day decisions? We live in a world of asymmetric outcomes. No one is a good predictor of anything. Let’s focus on the consequences of our decisions (which we can model), rather than the probabilities (which we can’t know). As EOMs, we can infuse our decisions with positive emotion knowing we are implementing actions that have the greatest magnitude of outcome to sustaining Legacy and Enterprise Value.
What I am Reading / Listening to
Inside Bill's Brain: Decoding Bill Gates
Directed by Davis Guggenheim
Learning About Learning.
Inside Bill’s Brain: DeCoding Bill Gates is a Made for Netflix documentary directed by veteran Davis Guggenheim. It’s three episodes (or two if you watched them as I did, which was the first two at one sitting and the last one at another time).
It seems Guggenheim was allowed to ask candid challenging questions—not only of Bill Gates, but of Melinda Gates, his two sisters, Sue Desmond-Hellman the CEO of The Gates Foundation, his bridge pal Warren Buffet, Larry Cohen the CEO of Gates Ventures, several friends from his adolescent days, and including poignant family film footage. It’s not exhaustive, but it does allow its subject enough air time to make his case in his own sometimes thick adenoidal, but always unmistakable voice from startup in Albuquerque, to the roll out of MS-DOS, through love, marriage, U.S. Antitrust fight (a regrettable part of our U.S. history it seems to me), and now the Bill and Melinda Gates Foundation. Just terrific learning about learning. As someone who is about the same age as Bill, I had the fun of recognizing the pictures and the headlines from his career from when I saw them live the first time.
What a force is Bill’s Brain. You can love him, hate him, put him down or up on a pedestal, but this documentary lets you get to know him for yourself without regard to the popular media or culture noise. Surely Bill Gate’s is one of the greatest brains—leaders—forces for positive change of our time.
Entrepreneur Owner-Manager Quote
“Hibernation is absolutely necessary. Especially if you want to be successful the next time around.”
- David Gould, Former President of Wood Structures, Inc.
Energy Creation
Contributed by Christopher D. Fincke
The power of having a “clean slate” is a powerful way to start the day. Obviously, this is not possible for most of us daily, but the mindset is. I have tailored my morning routine to carve-out 30 to 60 minutes for exercise. I have found this part of my day to be both highly productive and meditative.
The first half of my exercise is focused on thinking through the unsolved mysteries from the previous day, and then prioritizing my list of to-dos for the rest of the day. I am always amazed how productive this 15 to 30-minute exercise is.
After my “work” session is complete I quickly shift gears to find a meditative state. Clearing my mind and focusing just on being the best I can at the single task at hand (finishing my run, exercise, etc.) is incredibly rejuvenating. At times I find myself using a technique learned from the 1936 Olympic gold medalist rowing team to keep my mind from wandering; M-I-B (mind in boat). They used this mantra to unite the individual rowers to pull as one. It is an easy reminder to keep singular focus on the task at hand.
Often, this routine is a fantastic energy creation event. Best of all it is easily repeatable!
