78th Edition – August 2, 2020
A leader … is like a shepherd. He stays behind the flock, letting the most nimble go out ahead, whereupon the others follow, not realizing that all along they are being directed from behind.From the Long Walk to Freedom by Nelson Mandela (p. 22)
1. The Most Refreshing Words I’ve Read During The Pandemic
I only closely follow 3 podcasts, and my favorite by a mile is The Soul of Enterprise featuring Ron Baker (whom we’ll be interviewing later this month) and Ed Kless.
At the beginning of a recent show entitled The Economy and COVID-19: Recovery or Relapse, they quoted a Rabbi Daniel Lapin blog post about the economy returning to normal. Lapin’s analysis of the word ‘normal’ was so profound, I was compelled to read the Rabbi’s post in its entirety.
Rabbi Lapin states there is no word for ‘normal’ in the Hebrew language. He finishes the post which is indelibly etched in my mind forever:
“When will things return to normal? Wrong question. When shall we live our lives to the fullest? Now.”
Thanks Ed and Ron, I needed that.
2. What Problem are You Trying to Solve?
According to a MITSloan Management Review article, psychologists and cognitive scientists have suggested that the brain is prone to leaping straight from a situation to a solution without pausing to define the problem clearly.
Not only is this foundational material in getting to the root cause of a problem, but the inclusion of a modified A3 Form is also genius.
Incidentally, if you want to know more about A3 Forms, my favorite examples are found in the very readable softbound book, Getting the Right Things Done: A Leader’s Guide to Planning and Execution by Womack and Dennis.
3. Creation vs Disruption
If you work in a company with an IT department, there’s about a 100% chance there are some O’Reilly books lying around or piled on bookcases.
The founder is a publishing genius who also wrote WTF – What’s the Future and Why It’s Up to Us. My favorite chapter is the last one which is geared toward founders and CEOs where he encourages the following:
+ work on something that matters to you more than money
+ create more value than you capture
+ take the long view
+ aspire to be better tomorrow than you are today
4. Revisiting the SaaS Rule of 40
CFO Bookshelf will soon be interviewing the former CEO of Host Analytics (now called Planful). Dave Kellogg writes frequently on Kellblog about weekly, a site I’ve been following for years.
One of our topics of discussion will be the Rule of 40 which is growth rate + profit should be equal to or greater than 40% in the SaaS world. I’m anxious to get Dave’s take on companies that are tilted heavily on growth while chewing up cash along the way – do they survive?
Here’s my homework assignment for you. In your company, what’s your rule? Is it The Rule of 12%, The Rule of 15%, or even the Rule of 20%? What should it be and why?
Bonus Bookmark – if The Rule of 40 intrigues, you might like following Meritech’s KPIs and valuation metrics for 50-plus SaaS and cloud companies.
5. Colonel John Boyd on Analysis
Our August Book of the Month is Boyd: The Fighter Pilot Who Changed the Art of War. In August, we’ll have one podcast episode dedicated to the book, and we’ll also be interviewing the author later this month.
One of my favorite chapters was Destruction and Creation (chapter 23), the same title as Boyd’s only published work. Several key points jumped out:
- “If you want to understand something, take it to extremes or examine its opposites.”
- Analysis leads to understanding but not to creativity
- Analysis only gratifies the person doing the analyzing
- Boyd called Washington a city of ten thousand analysts and no synthesizers
- Synthesis is the basis of creativity
Does the mean Boyd didn’t believe in analysis? Not at all as analysis is required in the OODA Loop he created. His unstated point is that analysis should not be the main thing.
Have you decided on the books you’ll be reading in the new month? I’m maintaining a diet of history and biographies:
- “Mark, read this.” I’ve heard that several times this year. I finally started reading Alexander Hamilton by Chernow, and I’m already hooked.
- On my 4-mile farm walks, I’m listening to Mandela’s Long Walk to Freedom
- Time permitting, I’ll pick a Michael Korda book, and I’m leaning toward Hero: The Life and Legend of Lawrence of Arabia
- For business, I’ll fast-skim Blue Ocean Shift and do a slower skim of 2 of Rita Gunther McGrath’s books.
- I’m sure there’s a better name for brain books, but I’m halfway through Lead Yourself First (good, not great – the focus is on solitude).
CFO Bookshelf is about lifelong learning for financial leaders. Remember, read widely. Don’t be afraid of missing out when reading non-financial or non-business books. That’s because we bring our strategic, analytical, and financial mind to every type of book we read. That means our insights and discoveries will grow when we read and learn outside our domain of expertise.
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