Book Review 009: The 7 Habits of Highly Effective People - Stephen R. Covey

/

Authored by Stephen R. Covey, the book titled "The 7 Habits of Highly Effective People" discusses seven principles that effective people embody, and it also teaches readers how they can build their character and shape their lives with purpose and intent. While many business and self help books may focus on developing a good personality, Covey describes how developing a good character is more important as well as productive. He is a believe that your personality will emerge naturally when your character is built well and deeply rooted in positive principles. For example, if you attempt to develop a good personality without a foundational character, it may seem like you are wearing a mask to hide your true self. This in itself will ultimately be seen by others as deceptive.

The author states that in order to first develop a sound character, one must have a new way of seeing things, a sound paradigm. As an example, in the past, surgeons did not wash their hands, and when patients died of infections, no one understood why and did not see the correlation between the two. As a result of a paradigm shift, sterile operating rooms came to existence and also opened their eyes into how disease worked. In order to create a sound character, and live a life of integrity, you must embrace the new paradigm and act consistently in accordance with the new character. Covey mentions that building a character includes building habit. As Aristotle said, we are what we habitually do. To develop the habit we must first:

  • Know – Understand what you want to do and why you want to do it.

  • Develop skills – Become able to do it.

  • Desire – You must want and will yourself to do it.

Although we can change our outside appearance as much as we want, the most important work is the inner work. When we master our interior self, we will in turn, master what is outside of us.

Habit 1: Be Proactive

Per Covey, highly effective people are proactive and do not limit themselves from taking action. They are able to see that they have the freedom to choose what character they will become and how they will act. Viktor Frankl was a prisoner in a Nazi concentration camp where his entire family, except for one sister, was murdered in the camps. Frankl was in a situation most people could not even imagine, but he was able to rise above the occasion and realize that he was able to be the "victor", not the "victim". “In choosing our response to circumstance, we powerfully affect our circumstance.” Through his grit and determination, he inspired other inmates and took fate into his own hands. Instead of thinking, "no, I cannot do anything", they think, "how can I do something?" or "what possibilities are out there?"

Habit 2: Begin with the End in Mind

Highly effective people think carefully about their goals and demand accountability. By creating a personal mission statement that outlines your goals and describes the kind of person you want to be, you naturally make a commitment. Remember, what can be measured, can be managed. 

Habit 3: Put First Things First

As highly effective people realize that they have the power to change who they are, they must also remember that habits are key in ensuring they meet their goals and objectives. Alot of people waste their time staying "busy" but are not "productive." We aimlessly create task lists and are unable to focus on the wildly important goals. Highly effective people must learn to prioritize their workload and not confuse urgent with important. One is easy to see, but the other is harder to discern. Remember to place emphasis on planning, developing key relationships and placing yourself in situations for more opportunities. Once you have prioritized the things in your life, remember to give each role an appropriate allotment of time on your schedule. Don’t rob Peter to pay Paul; make sure each role gets its due. Remember that effective management is putting first things first.

Habit 4: Think Win/Win

In discussing habit 4, Covey shares how successful people use "interpersonal leadership" In marriage, business or other relationships, to create win win situations. Simply put, two wins makes everyone better off; two losses places everyone in a worse situation. Furthermore, a win/lose relationship creates a victor and leaves someone injured. Highly effective people strive for win/win transactions, which incentivizes everyone to cooperate because all the parties come out on top. Highly effective people become highly effective by multiplying their allies, not their enemies. A good alliance is seen as a win/win.

Habit 5: Seek First to Understand, Then to Be Understood

Communication is a two-way street. In order to develop strong relationship, first find out what the other party desires and learn what winning means to them. Never assume that you know what they want. Use attentive listening to understand what the other party needs before you begin to outline your own objectives and share your wants. Place yourself in the other person's situation and do not argue or oppose their thoughts. For example, a good lawyer will present their strongest possible case from the lense of their opponent. Only when you truly understand the other side's motive and their point of view, can you draft the best response and get what you ultimately hope for. This is acting upon the “principles of empathetic communication.” Real self-respect comes from mastery over self.

Habit 6: Synergize

Covery understood that with synergy, 1 + 1 = 3. Creative cooperation may yield an addition bonus and multiply the effects. Just as 2 horses combined can pull a cart that is much heavier than the maximum weight each horse can pull on their own. Synergy essentially means, bringing together a whole that is greater than the sum of the parts. The most important part of synergy is the ability to communicate successfully and cooperate. This is different from "pretending" to play along nicely while hiding their true intentions. You must listen, understand, and actively cooperate with the other party to create something together, than one could not possibly create on their own.

Habit 7: Sharpen the Saw

A dull saw makes the work of cutting down a tree tiresome, tedious and unproductive. Highly effective people understand that one must sometimes take one step backward in order to take two, three steps forward. In this example, the man must take time to sharpen their tool (e.g. physical and spiritual rest, personal growth) and approach the task of cutting down the tree with a renewed self. People need to give care to their mental health by thinking positive thoughts, ensuring their mind is engaged and active. Further, successful people must also defend their heart and emotions which drive our everyday self. 

Favorite Quote: “Most people do not listen with the intent to understand; they listen with the intent to reply.” 

Below are some key areas of focus that the author tries to convey to his readers:

  • Focus on developing character, not personality.

  • You are what you habitually do, so adopt productive habits.

  • Excellence is a habit, not an aptitude.

  • You are free because you can determine how you respond to circumstances.

  • Choose sound principles – integrity, dignity, quality, service, patience, perseverance, caring, courage – and endeavor to live by them.

  • Write a personal mission statement to clarify your principles and set your goals.

  • Think of what you want people to say about you at your funeral; try to deserve it.

  • Build trust in your relationships.

  • Balance the attention you give to each of your roles. Allot your time to attend fairly to each of your responsibilities and relationships.

  • Understand that you have the ability to improve your habits and your life.

Hope you enjoy this book!

Click below to get your own copy. See our affiliate disclosure here

Book Review 008: Good to Great - Jim Collins

/

Jim Collins is a popular author of business books who also wrote Great by Choice and How the Mighty Fail. Good to Great, published back in 2001, takes a deep dive into how to build a sustainable business by asking yourself the question, "How can a good company become great?". He along with his team researched many companies and found patterns to create the "good to great" formulas which many businesses try to emulate even to this day.

By looking at the past 25 years of Fortune 100 companies on Wall Street, one can see how some Companies that appeared to be great, quickly disappeared, and others withstood the test of time. Jim Collins breaks down the success principle as follows: Hire the right talent, be specific in your purpose and goals, focus on results and make tough decisions.

In the process of gathering data for this book, Jim and his team looked at over 1,435 Fortune 500 companies that had 15-year cumulative returns at or below the stock market average, followed by cumulative returns that were three times the market over the next 15-year cycle. Companies that became the target of this metric were Fannie Mae, Gillette, Kroger, Walgreens, Wells Fargo, and Circuit City, to name a few.

Furthermore, the team compared these companies against those in the same industry but were unable to sustain "greatness" for a long period of time. Once the companies were selected, the team interviewed executives and upper Management, as well as review their forecasted goals, financial statements, and company culture. Some interesting statistics that were found early on included that trend that a company does not need a famous CEO nor does executive compensation play a role in the achievement of a corporation. 

The book describes the path of a company transitioning from good-to-great as three stages:

Stage 1: Disciplined People

Collins saw that companies trending towards the path of becoming "great" needed the right people who displayed "level 5 leadership", meaning they were professionally driven, not for their own achievement and success, but for the greater good of the company. Furthermore, these leaders were humble, accepted responsibility, and were able to choose great successors.

State 2: Disciplined Thought

Leaders must be ready to face the data and ask the hard questions. They must be ready to accept the truth and make decisions based on facts. Jim shares that leaders must engage their team with dialogue and debate, not coercion. In other words, ask and lead with questions, not answers. Its often easy to fall back on "tribal knowledge" or past experience to give a quick answer, instead of facing the new reality. Do not use this opportunity to place blame, but self-examine. Also, implement controls, or mechanisms to be able to detect red flags before they become larger issues.

Stage 3: Disciplined Action

Great companies stimulate a culture of discipline. While early on, start-up companies may fuel their growth through the use of creativity and passion, as the company matures, they need to find a way to become more systematized, hire the right people, and build processes that are scaleable for the long term. This may become counter intuitive to a start-up promoting creativity and "forward thinking", however, leaders can create a disciplined framework and foster creativity within the framework for continued growth. Through researching these companies, Collins and his team found that greatness does not come from strategy or technology, but comes from careful and deliberate cycle of development followed by a leap forward in the right direction.

“The Flywheel and the Doom Loop”

Companies that go from good to great develop a pattern of growth. This pattern of steady buildups and breakthroughs is similar to the concept of a flywheel that builds momentum. The overall result is from the cumulative effect of small victories and good decisions made over time. They never have a meteoric rise or a “miracle moment” that can be pinpointed to a single event. This “flywheel effect” is circular and builds on the “accumulation of effort applied in a consistent direction.” On the other hand, companies that Collins and his team compared with good-to-great corporations but that didn’t make the grade, fell into the "doom loop". They launched new “miracle” programs that were the next big thing, and tried to buy their way into success through mergers and acquisitions. This caused frequent corporate restructuring and leadership change that landed them out of business.

“The Hedgehog Concept”

Jim Collins illustrates the "hedgehog concept" by explaining a Greek fable that pits a fox against a hedgehog. From the outside looking in, the fox is smart, cunning, and sneaky. On the other hand, the hedgehog is slow and unexciting. However, no matter how much ingenuity the fox shows in its attack, the hedgehog rolls into a ball with its spikes sticking outward. After numerous attempts, the fox leaves empty handed and defeated. The point is that the hedgehog knows its strengths and sticks to what it does best.

Good-to-great companies are like hedgehogs, able to focus on what they do better than their competition. That is why we constantly see competition dwindling in numerous industries such as airlines, healthcare, pharmaceuticals, and restaurants. For example, Walgreens sought to become America’s most convenient drugstore during its rise in the 70s, 80s, and 90s. The company decided to stick to high-traffic sites and pioneered the idea of drive-through prescription pickups. Walgreens was able to combine the idea of convenience and increased profit per customer per visit. By sticking to these two fundamental goals, they were able to rise to the top and crush their competition. 

Collins explains how we all can find our hedgehog concept by asking ourselves what we can do better than any other organization, how do we make money, and what stimulates your dedication to the organization's goals? This ties back to stage 1, where by hiring the right employees who are passionate and driven, they are able to push the flywheel in one consistent direction harder and faster than others. This creates the momentum and push that the organization needs to become "great". 

Favorite Quote: “While you can buy your way to growth, you absolutely cannot buy your way to greatness.”

Good to great is a perfect book for entrepreneurs, business owners, and employees alike, especially those in Management positions, to help shape the company culture and thought leadership by sticking to your strengths, goals of the organization, and making the tough decision. 

Good Luck!

Click below to get your own copy. See our affiliate disclosure here

Book Review 007: Millionaire Booklet - Grant Cardone

/

One of the first books I read by Grant Cardone, was the Millionaire Booklet - a short guide on how to become super rich. In this book, Grant attempts to simplify the process of becoming a Millionaire and super rich. He is a 100% certain that there are actionable steps that an individual can take to make this happen, regardless of the current economic condition, where we live, or what we do. 

Below is a summary of Grant's story and tips for becoming a Millionaire:

Ever since he was young, Grant made a commitment to creating wealth for himself and family for generations. Although he made this commitment at sixteen, he was broke at the age of twenty-five. In order to pursue his goal of becoming a Millionaire, he began to study the principles of wealth creation and applied what worked for him and did not. Through trial and error, he increased his savings to $10,000 and then to $100,000. He became a Millionaire in his early thirties and built over five companies that produce over $100 million in sales in each year.

Where do you get your financial advice?

Grant first debunks the myth that becoming a Millionaire is not a pie in the sky dream, and that the wealthy come from all walks of life, and that the reason most people never get rich is that they never even consider it a possibility. As these people are convinced by those close to them to simply be satisfied with whatever their financial situation is.

In addition, people fundamentally do not know how to get money, fewer understand how to keep it, and almost no one knows how to multiply it. He goes on to say that, even in one of the richest countries in the world, America, 76 percent of people live paycheck to paycheck, some 50 percent of Americans have no money for retirement, and 47 percent of Americans don’t have $400 for an emergency. He disagrees with the thought of saving your way to wealth like “don’t drink Starbucks coffee, and you will save $700 a year.” Per Grant, “you can save $700 a year for the next fifty years and you won’t be rich, you’ll just be old.”

The issue that many people face is where we get our financial advice. Most of the advice we get about money is from people close to us who either don’t have money or have given up on it. Some of the people we get advice from have never even thought financial freedom possible. Grant tells us to look beyond the noise and confusion about money and look at people who have created enormous amounts of wealth. These are the people we need to study and model our financial journey

Be on offense

Getting rich is mostly a game of offense, not defense like other people may have taught. You get wealthy by creating income producing assets and increasing cash flow not by cutting coupons and saving. Taking risks today is the way to eliminate risk, but you have to take risks at the right time. The middle-class is for those who settle for just enough rather than striving for prosperity. The middle-class life is a compromise. Grant goes onto say that when we compromise our finances, we become unable to help others, as we are struggling to simply take care of ourselves.

In his book, Grant shares that the first step to becoming a millionaire is to make a decision and that requires us to lose our middle-class mind and then get our millionaire mindset. It has never been easier to get rich, but it is still impossible if we don’t change our mind. For example, most people will produce or be in contact with a million dollars in their lifetime. Meaning, if we earn $50,000 a year for twenty years, we earn one million dollars. The purpose of doing this math is to simplify the objective. “Do the math to create possibility, then create strategy.”

Below are a few ways to a million dollars:

Salary $50k x 20 years

Salary $100k x 10 years

Salary $250k x 4 years

5,000 people buy a $200 product

10,000 people buy a $100 product

1,000 people buy a $1000 product

Stay Broke

When you start increasing your income, Grant tells us to stay broke. He has a policy to never, ever have money sitting around. Once he starts increasing income, he immediately moves the surpluses to sacred accounts that are out of his reach and marked for future investments. The real benefit of this strategy was it forced him to continue to produce and out-work his earlier results. There were months when he was making more money than he has ever made and he would push the entire surplus into his sacred accounts. When he did this, Grant couldn’t pay his rent even though he was making more money than he's ever made. He was forced to negotiate with his landlord for an extension on his rent. 

This state of staying broke forced him to continue producing new revenue. As Grant saw first hand so many people have financial success, then quit doing what created their success and then go backward financially. Staying broke forced him to keep reinforcing the actions that had already proven successful. Grant's formula for success is as follows: Idea + Hard Work x Time + Discipline = Success

Save to Invest, Don’t Save to Save

Investing money is how you will get super rich. He shares how he believes the only reason to save money is to one day invest money. Most people aren’t equipped to take advantage of opportunities because they don’t have the money, they don’t have the knowledge or the courage. People don’t create wealth because they never invest enough in a deal to get a big payoff. To do this, one must have a surplus of cash and confidence. When you know it’s the right thing, he advises that we go all in, as speed is power. 

We must have complete confidence in the investment and in our previous income flows so that, if the investment takes longer to work or even fails, we still can rely on our earlier flows of income. Grant is willing to go broke and exhaust all his cash knowing he is not putting his family or those who depend on him at risk because the earlier income flows can support him. 

The poor and middle class try to replace flows of money while the rich try to supplement (add) more flows. Grant explains that creating multiple flows of income is the holy grail of creating financial freedom and true wealth. The most common mistake he sees people make when creating multiple flows of income is walking away from the current flow. The next most common mistake is moving to secondary flows that are not similar to the first and then being unable to give both proper attention.

When creating your second flow of income, Grant advises us to monitor our current flow and never abandon the first flow. For instance, if you work at a company and earn a salary, keep improving on what you do for that company and look for ways to create a second flow parallel to what you are currently doing. Do it within the company you work for during the time you are at work. To create multiple streams of income requires commitment and especially discipline in how you use your time and money.

Repeat, Reinforce and Hyperfocus

Maintain a commitment to self-improvement even though it may mean that you need to change your environment (e.g. friends and family). This doesn’t mean we need to get rid of people, but it means you need to add new people. The old friends will just fall off as they will lose interest. If you want to make it into the club of wealth, you must add new connections and that means you need to reach up, not sideways and not down. Remember that you are the average of the five people you spend the most time with.

To add new people to your circle, make a list of people in your network that are super successful, on the move, who are interested in personal growth, active in charities, who invest time to improve the quality of their lives, and are not just complaining all the time. These are the people you should surround yourself with.

Favorite Quote: “Money seems to flow to those who give it the most attention and take the most responsibility for it.”

Good Luck!

Click below to get your own copy. See our affiliate disclosure here