How To Run An Organization

I was talking to a friend a few days ago who is trying to organize a comunity living space. He was talking about all the detail he had to manage. Some general thoughts on leading a business/organization:

  • Establish a clear mission/strategy. A leader’s fundamental job is to get everyone to understand it. Once they do, they can execute against it without undue communication burden on the leader. In Built To Last the authors argue that religious adherence to a mission/strategy is the key to the success of great companies. Note, a mission is much more specific than e.g. earn money. It is something the heart can grasp. It is something that excludes as well as included.
  • Let people do the things they are best at even if their best is worse than yours. You need to do the things you are best at. This is basic David Ricardo and it is as true today as it was in the Eighteenth Century
  • Seek excellence. In many areas of cognitive skill (e.g. programming, writing, selling, managing, etc) the best is more than 10x better than the worst. If you can find these 10x better people and get them working for you in the areas they specialize, that is a gigantic win. Organize the company to leverage their excellence and insure against their inadequacies. Note: You too may be both excellent and terribly flawed. Insure against your own flaws too.
  • Trial and Error. In Art and Fear, the authors tell a story of divding a ceramics class in two. One half is told that they will be judged on quantity. At the end of the term, all their projects will be weighed; 50 lbs gets an A, 40 gets a B, etc. The other half will be judged on quality. They only have to produce one piece. It just has to be great. At the end of the term, all the best art came from the quantity half. Think about why. There are lots of reasons. Structure your business so you can iterate quickly and learn fast. Lower the cost of trial, insure against error.
  • Plan and execute. Eisenhower one said ” In preparing for battle I have always found that plans are useless, but planning is indispensable.” Planning helps you react effectively when things go wrong, because part of the planning process is thinking about risk and contingency. By the way, things always go wrong. Don’t freak. Just handle them.

By the way, it is much easier to say these things than to live with them. I am writing this post as much to reinforce these thoughts in myself as I am to share them with my readers.

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