Ikujiro Nonaka - Wise leadership

The firm is a knowledge creating entity. The Nonaka knowlege spiral documents how knowlege is generated.   He advocates leadership from the middle.   This works in the network model corporate structure.   He notes that change can come from the middle management of an organization as they are often the first to see the need for change.   Decision is information processing.  Judgement involves awareness of the context behind the phenomenon including double loop learning.  The backround for this  comes from  liberal arts. The tacit and explicit also corresponds to Kahneman system 1 and 2 with the 1 being tacit and 2 being explicit.  When you teach someone to drive you start using the explicit.  Put your foot on the gas.  After they know how to drive it is internalized and tacit.

What is knowledge?
Larry Prusak What is Knowledge


Data - the list of ingredients

Information - the recipe

Knowledge -
potato pizza 

John Medina in "Brain Rules" illustrates the danger of information without knowledge.   The Electrolux Vacuum Cleaner company is a Swedish company trying to break into the North American market.   Having English speakers on their staff, but not Americans they chose for their lead marketing slogan, " If it sucks, it must be an Electrolux."

http://dotearth.blogs.nytimes.com/2012/05/25/daniel-kahneman-on-the-trap-of-thinking-that-we-know/?ref=science

Great Lecture by Daniel Kahneman from Princeton.  After a hard day of finalizing EzCar followed by Szechuan Chicken dinner at Bamboo Garden and relaxing to Iron Man 2 on Netflix I made my pupils dilate by learning about system 1 and system 2.   All expertise is system 1.  We are all experts in our world.  If it is important to get it right we use system 2.  Scientist use 2.  If knowledge goes against our belief we don't accept it.  I had the experience of watching Nick Hanauer's TED talkhttp://www.huffingtonpost.com/2012/05/17/nick-hanauer-ted-talk_n_1524435.html challenge a friends belief system.  Forbes Magazine argues that a lower tax rate on dividends and capital gains is fair because it is double taxation.  However legally there is no double taxation, because legally, a company is a person and so when dividends are paid money is being transferred between different individuals which is fair game for taxation.  Kahneman notes  we do regressive prediction and come to false conclusions. System one tells stories and is terrible with statistics.  Anything repeated many times appears true to system 1.  System 1 is immune to amount of evidence.  It pays attention to the source and the story.  It neglects message about distant threats.  Most of what we do is dictated by system 1 which we have very little control.  He also said if you put a pencil in your mouth cartoons are funnier.     I also learned that Robert Shiller has a new OYC Markets course. 

Everybody gets so much information all day long that they lose their common sense. - Gertrude Stein

The ethos of not fooling yourself is one of the best you could possibly have. It's powerful because it's so rare - Charlie Munger

Entrepreneur ship is not the best way to get rich- Eric Ries

The best business is a Ponzie scheme.  Eric Ries

The mental habit of thinking backward forces objectivity.   Charlie Munger

Our mentor, Brooks told us when we were working on the Starbucks project, “work backwards” and that was an epiphany for me in how to complete the project.   We were given a financial goal so it was just a matter of seeing if we could get there.  Just as Costco determined that having more than 360 Advil tablets in a bottle led to more than 10% not buying limiting their revenue, we determined how much food Starbucks could serve and still reach their goal using their current system by working backward.  One must also work backward in starting a business.

Michael Gerber in  E Myth talks about the same working in reverse process when starting a business.  You first need to determine your own life goals.  What do you want to be as opposed to do?  Noam Wasserman in The Founders Dilemma asks what we want in life: being king or having riches.   He evaluated motivations by decade of life and by gender ranking from top to bottom and found:
Men’s motivators
20’s – 1. power and influence, 2. autonomy, 3. managing people, 4. financial gain
30’s – 1. autonomy, 2. power and influence, 3. financial gain, 4. managing people
40’s – 1. autonomy 2. altruism,  3. variety , 4. power and influence
Female motivators
20’s – 1. autonomy, 2. power and influence, 3. managing people, 4. altruism, … 9. financial gain
30’s – 1. autonomy, 2. altruism, 3. power and influence, 4. variety
40’s – 1. autonomy, 2. altruism, 3. variety, 4. intellectual challenge
He ended with the “Key Questions for the Founder”:  1.Why am I doing this?  What motivates me? 2. What early choices will cause problems?


 

Starting a business is complicated and is probably best done in a group.  One of the best instructional videos I have seen is:

http://video.nytimes.com/video/2012/04/17/dining/100000001493798/potato-pizza.html because it inspired me to make the pizza.       I don’t know if watching the Lean Startup will have the same result.