Author: Tom Koor

Tom Koor

My regular update regarding my learnings and unlearnings

It’s easy to tell what your strategy is

The purpose of this email is to share my learnings and unlearnings, with the expectation that some will be of value to you. This email was 100% written by me – not by AI.  When you send me an email, my response is 100% written by me.

What has been my most valuable learning in the past three months?

I’ve had countless confusing discussions about strategy.  I’ve concluded that it’s easy to tell what your company’s strategy is.  Let’s assume your board of directors approves your strategic plan.

  • You have a slide at the beginning of your strategic plan presentation to the board. The slide states “Asking for the approval of ….”
  • The minutes of the board meeting document: what exactly was approved; who is accountable for the benefits; what are the metrics for measuring success; what facts and assumptions would have to change in order for the benefits to be unachievable and the board would need to approve something different.
  • The above two points illustrate that approving a strategy is a combination of a decision-making process and a learning process.

What is my personal update?

  • On the mentor roster at The Hatchery, Department of Engineering, University of Toronto, Department of Engineering.
  • On the mentor roster at the Health Innovation Hub, University of Toronto,
  • Continued my long-term fundraising for the Geoff Carr Fellowship at Lupus Ontario. Over the past 20 years family, friends, neighbours, and colleagues have contributed over 284,000.
  • Continued as a member of the Angel Capital Association in the US and the Institute of Corporate Directors in Canada.
  • Continued to share with you, and on my website, some of what I’ve learned and unlearned, with the intent that some of you will find value. The learnings and unlearnings are applicable to any size company, ranging from early-stage startups to large global enterprises.
  • Continued as Board Director at a private company.

I continue to focus my time to maximize the value and impact of my two professional purposes: #1 Enabling current and emerging business leaders to succeed, #2 Enabling business leaders to have a positive impact on society.

Sharing my learnings

Below are links to my website containing new and revised articles since my last update in September. The critical learnings from each article are included. Each article designed to enable discussion among founders, owners, shareholders, investors, CEOs, and boards of directors. The learnings and unlearnings are applicable to any size company, ranging from early-stage startups to large global enterprises.

Links to my points-of-view articles:

Does everyone agree on what strategic planning is?

  • There is no broad agreement regarding the definitions of: strategy; strategic plan; and strategic planning process
  • There is no broad agreement regarding the components and metrics of a strategic plan.
  • There is no broad agreement regarding a strategic planning process.

https://koorandassociates.org/strategy-and-strategic-planning/what-is-strategy-and-strategic-planning/

 

Traditional strategic planning dooms your company to failure.

  • TSP (Traditional Strategic Planning) evolved in a slow changing world. The future could be forecast, and decisions (and decision-making processes) were expected to be valid for several years.
  • The result of TSP was that few companies survived and most delivered poor financial results.
  • Today’s world is totally different: future is impossible to forecast, multiple sets of fast changes, multiple unpredictable crisis.
  • Strategic planning must be rethought to determine which decisions and decision making processes have a lifetime longer than a year.

 

https://koorandassociates.org/strategy-and-strategic-planning/traditional-strategic-planning-dooms-companies-to-failure/

 

Is your company actually a startup? V2

  • Most companies need to become a startup again but don’t realize it. As a result, the wrong type of talent is in place, taking the wrong actions.
  • Most companies don’t last long. Most companies have poor value creation. Most transformations and major business changes have poor results.
  • Companies need to get into startup mode to validate and invalidate their assumptions regarding: customer needs and problems, and the number of customers willing and able to pay for a solution.
  • Board directors and C-Suite cannot learn startup mode knowledge, skills and decision-making processes because their brains have hard-wired biological responses and cognitive biases.

https://koorandassociates.org/avoiding-business-failure/is-your-company-actually-a-startup/

 

How will startups destroy your company? V2

  • The startup is a temporary organization designed to search out a repeatable, scalable, and profitable business model with lots of potential customers who are willing and able to pay to solve their problems and needs. Startups are not building a solution. They are building a tool to learn what solution to build.
  • Startups begin by making assumptions about the problems customers are willing and able to pay for, and about how customers would perceive the value proposition they’d achieve from the startup’s solution.
  • The startup is driven by immediate and ongoing understanding of the customer based on face-to-face interviews supplemented by surveys.
  • The assumptions are quickly validated or invalidated. Invalidation results either in a new set of assumptions or the startup stopping.

https://koorandassociates.org/avoiding-business-failure/how-will-startups-destroy-your-company/

 

AI is not accountable for benefits.

  • AI is not accountable for benefits. I have seen countless articles start out with AI not delivering benefits.  AI is not accountable for benefits.
  • Management is accountable for benefits.
  • The way to solve this return on capital issue tis two-fold: First, improve the processes used by management to make investment decisions (including AI) and to achieve benefits. Second, improve management.

 

What is a startup? V3

  • There are no commonly accepted definitions regarding startups.
  • There are no commonly accepted definitions of a successful startup.
  • Each of the 5 US universities I looked at has different definitions, metrics, and processes for startups.

https://koorandassociates.org/the-startup-journey/what-is-a-startup/

 

How will undergraduate founders destroy your company?

  • Founders first go through a program to validate that cash paying customers believe they have a problem which needs a solution.
  • The first step is to have face-to-face interviews with cash paying customers.
  • There should a multi-disciplinary set of founders e.g. business, technical, social sciences people.
  • Program, mentor, and founder problems are addressed by AI.
  • The programs have a structured learning process to rewire the founders’ brains over a period of several semesters.
  • The program is part time, with the founders taking other courses during the semester.

https://koorandassociates.org/avoiding-business-failure/how-will-undergraduate-founders-destroy-your-company/

Tom Koor

Does everyone agree on what strategic planning is?

Does everyone agree on what strategic planning is?

 What is the purpose of this article?

  • This article enables a discussion about your company’s strategic plan and strategic planning process.
  • The audience for this article includes: boards of directors, CEOs, the C-Suite, individual investors, and institutional investors. The article applies to all companies, regardless of size.
  • This article does not provide tax, legal or financial advice. You must do your own research and fact-based analysis using current and relevant information.

What are the critical learnings in this article?

  • There is no broad agreement regarding the definitions of: strategy, strategic plan, strategic planning process
  • There is no broad agreement regarding the components and metrics of a strategic plan.
  • There is no broad agreement regarding a strategic planning process.

 How do you read this article?

  • This article is a collection of quotes defining strategy, strategic plan, and the strategic planning process.
  • The quotes are from publicly available articles from the some of the world’s leading strategy consulting firms and business schools.1
  • I have not read every single strategy article published by these organizations. I have not included every single strategy quote.

You can download  PDF of this article from: Does everyone agree on what strategic planning is

Are there common definitions of: strategy, strategic plan, and strategic planning process?

There are no common definitions.

A few of the many definitions of strategy are:

  • “profitably differentiate a company from it’s competitors”
  • “an integrated set of actions designed to create a sustainable advantage over competitors”
  • “the ability to foresee the future consequences of present initiatives”
  • “a strategy expresses the logic of success for the organisation”
  • “explaining what enables firms to enjoy sustainable performance advantages over their competitors”

A few of the many definitions of a strategic plan are:

  • “allocate resources to critical capabilities”
  • “a road map of how to get to the desired destination”
  • “output of the planning process”, “set of plans”, “which describe objectives and alternative strategies”

A few of the many definitions of a strategic planning process are:

  • “a comprehensive process for determining what a business should become and how it can best achieve that goal”
  • “the ongoing organizational process of using available knowledge to document a business’s intended direction”
  • a process to “accomplish the enterprise’s desired outcomes”, “plan for action with clear and measurable goals linked to these outcomes”
  • “anchors a company’s vision, aligns resources, and drives impactful decisions”
  • “explicit written process for determining the firm’s long-range objectives, the generation of alternate strategies….and a systemic procedure for monitoring results”.

Is there a broad agreement on the components and metrics of a strategic plan?

There is no broad agreement on the components and metrics of a strategic plan. A few of the many examples of possible strategic plan components metrics are:

  • “the size of the profit pool available in each market”, the pool’s potential growth”, “the company’s likely portion of that pool”
  • “demonstrates how any changes in end markets, competitors, prices, and other external variables will affect a company’s profits, cash flow, and valuation if no action is taken”
  • “market growth, segment size, customer needs, competitor strengths and weaknesses, and technological trajectories”
  • “operations costs”, unit costs, total volume costs, and lifetime costs.
  • “concise sentence describing the reason the organization exists”
  • “what success looks like for the organization over a three-year horizon”, “two external tangible outcomes and one internal improvement in capability”
  • “return on investment of stockholders”, “stability, good wages, and good benefits for employees”
  • “90-day priorities for everyone in your organization”
  • “Measures that allow them to understand whether their companies are outgrowing the market and taking share from competitors”
  • Explicit stakeholder objectives “listing of all groups that contribute to the organization”, “creditors, stockholders, retailers, and the local community”

Is there broad agreement on the strategic planning process?

There is no broad agreement on the strategic planning process. A few of the many examples of what comprises a strategic planning process are:

  • First step: “describe the organization’s mission, vision, and fundamental values”, “understand the current and future priorities of targets customer segments”
  • First step: Align on the strategic challenge”, “embedding strategy into plans and budget”
  • Answer the question: “is uncertainty properly defined and accounted for?”
  • First step: “Systematically scan the environment for opportunities and risks”
  • Answer the questions: “How are the priorities and options of leading-edge customers changing?”, “Where are today’s profit pools, and how are they likely to evolve or be disrupted?”
  • First step: “Define your purpose” to create customer and employee value.
  • Answer the question: “What would it take to be the Google, the Apple, or the Walmart of this market?”
  • “Quantify various types of threats” using “AI and machine learning tools”
  • Answer the question: “Where can we continue to improve and create value for our customers?”
  • “Define stakeholder expectations and establish compelling objectives for the business”

How many strategies does your company need?

The articles from the 9 organizations identified more than 19 different strategies your company might have. 2

I am unclear from the 9 organizations about:

  • How many strategies does your company need?
  • Who makes the decision about whether or not a strategy is required? What will be the value of each additional strategy?
  • Who makes the decision regarding your company’s overall planning and management process, which includes your various strategies?
  • How does your company coordinate the various strategies: e.g. assumptions, facts, decisions about resource allocations, decisions about timing etc.
  • Who approves the process for each strategy? Process includes: the questions to answer, the people involved, technology used, the types of analysis done, etc.,
  • Who is accountable for documenting each strategy process?
  • Does each strategic plan document start with a slide that says “Asking for the approval of….”. Do the minutes of the meeting document exactly what was approved?

What are your next steps?

  • Define the words/concepts/data you’re using, in a glossary. I’ve seen major confusion when the same words mean different things to different people.
  • Collect the facts regarding your current strategic planning situation, by using answering questions 2) to 6) from the above section “How many strategies does your company need?”
  • Benchmark your company’s historical results with your direct competitors and the broader market.
  • What are implications of the above?

Footnotes:

1 Bain, BCG, McKinsey, Harvard, INSEAD, MIT, Stanford, University of California – Berkley, and Wharton

2 I’ve listed here only 19 of the many strategies from the 9 different organizations: AI strategy, AI agent strategy, AI prompting strategy, brand strategy, corporate strategy, corporate finance strategy, crisis management strategy, customer insights strategy, data strategy, go-to-market strategy, innovation and entrepreneurial strategy, international and emerging markets strategy, investor relations strategy, M&A strategy, operating model strategy, operations and supply chain strategy, portfolio strategy, pricing strategy, transformation and change strategy,

What further reading should you do?

Your company will fail. Koor and Associates

https://koorandassociates.org/avoiding-business-failure/your-company-will-fail-v1/

Is your company planning to fail? Koor and Associates

https://koorandassociates.org/avoiding-business-failure/is-your-company-planning-to-fail/

Tom Koor

Traditional strategic planning dooms your company to failure. V2

Traditional strategic planning dooms your company to failure. V2

 What is the purpose of this article?

  • This article enables a discussion about your company’s approach to strategic planning.
  • The audience for this article includes: boards of directors, CEOs, the C-Suite, and investors. The article applies to all companies, regardless of size.
  • This article does not provide tax, legal or financial advice.
  • You must do your own research and fact-based analysis using current and relevant information.

You can download a PDF of this article from: Traditional strategic planning dooms your company to failure. V2

What are the critical learnings in this article?

  • TSP (Traditional Strategic Planning) evolved in a slow changing world. The future could be forecast, and decision (and decision-making processes) were expected to be valid for several years.
  • The result of TSP was that few companies survived and most delivered poor financial results.
  • Today’s world is totally different: future is impossible to forecast, multiple sets of fast changes, multiple unpredictable crisis.
  • Strategic planning must be rethought to determine which decisions and decision making processes have a lifetime longer than a year.

 When did strategic planning become popular?

Traditional strategic planning became popular in public companies in the late 1970s.  Many of the strategic planning concepts and methodologies are many years, or decades, old.  What were some of the characteristics of the old world?

  • Slow changing.
  • Infrequent crisis.
  • Forecasting the future 3 years out was often possible.
  • Capital was very hard to get.
  • Talent appears to be easy to get.

What did many strategic plans look like?

  • The format was executive summary, vision, mission, values, goals, objectives, multi year strategic initiatives, KPIs (Key Performance Indicators,) past and future financials, and assumptions and strategic initiatives.
  • Supporting analysis include SWOT (Strengths, weaknesses, opportunities, threats)

What were the results of traditional strategic planning?

Few companies survive

Most public companies will not survive. 3

  • A Fortune 500 company will survive an average of 16 years.
  • The typical half-life of a North American public company is 10 years.
  • Global public companies with $250 million+ market cap have a typical half-life of 10 years.
  • 50% of all U.S. companies survive for 5 years.

 Few companies generate significant value.

McKinsey analyzed the world’s 2,393 largest corporations from 2010 to 2014. The top 20% generated 158% of the total economic profit (i.e. profit after cost of capital) created by those corporations.  This was an average economic profit of $1,426 million per year. The middle 60% generated little economic profit, an average of $47 million per year. The bottom 20% all generated negative economic profit, with an average loss of $670 million per year.4

Most public companies have performed poorly5

  • 6% of all public companies have had negative returns over their entire life.
  • The median annual return for public companies (in existence for a least 1 year) has been -0.74%
  • 10% of the above public companies in had annual returns of at least 22%
  • 10% of the above public companies had annual returns of -58.24%, or less

But the world in 2026 is totally different.

  • The future is impossible to predict
  • There are multiple sets of crisis and turmoil at the same time and appearing unpredictably
  • Technology, customer needs, and competition changes in months.
  • Capital is now unlimited.
  • Talent is very scarce and very expensive. Elite employee (non-C-Suite) can reach into the millions or 10s of millions per year.
  • Two recent McKinsey articles outline: Monthly board and management meetings to discuss strategy; and weekly review of strategic KPIs by CEO and C-Suite, with intent to make any required corrections.

It is time to fundamentally rethink and recreate strategic planning.

  • What decisions can last for more than a year?
  • What decisions may be obsolete within a year?
  • What new decisions may your company need to make next month?

Your next steps.

#1 Define the words/concepts you’re using, in a glossary.  I’ve seen major confusion when the same words mean different things to different people. Critical definitions include: strategy, strategic plan, decision (i.e. what is a decision and the implications of a decision)

#2 Describe your potential external business environment over the next 3-5 years e.g. geopolitical changes, technological, capital and talent availability? Describe your external environment in 2020.

#3 What will your company look like in order to survive and prosper?

#4 What decisions will not need to be rethought over the next three years. Document your current decisions and decision-making processes. Some possible decisions are:

  • The processes to select, assess, develop, and exit talent at all levels of the company, including board of directors, CEO, C-Suite. This might include the role of values, morals, and ethics.
  • Talent allocation
  • Capital allocation
  • Decision making principles.
  • Board of directors approved policies.
  • Processes to launch and shut down projects lasting more than 6 months.
  • Risk appetite

#5 What decisions will need to be rethought during the next 3 years.  Document your current decisions. These could include:

  • Talent allocation
  • Capital allocation
  • Exiting certain customer segments.
  • Shutting down certain solutions.

 Footnotes

1 Renée Dye and Oliver Sibony, “How to improve strategic planning”, McKinsey Quarterly, August 2007, https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-to-improve-strategic-planning

2 Martin Reeves, Julien Legrand, and Jack Fuller November 14, 2018 BCG website, https://www.bcg.com/en-ca/publications/2018/your-strategy-process-needs-a-strategy.aspx

3 “Corporate Longevity”, Credit Suisse, February 7, 2017

4 Chris Bradley, Martin Hirt, and Sven Smit, “Strategy to beat the odds”, McKinsey Quarterly February 2018, https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/strategy-to-beat-the-odds

5 Hendrik Bessembinder, W.P. Caret School of Business, Arizona State University

Analysis of CRSP database of U.S. public companies, Dec 2025 to Dec 2023

https://www.scribd.com/document/924363269/2024-Which-U-S-Stocks-Generated-the-Highest-Long-Term-Returns-Hendrik-Bessembinder

What further reading should you do?

Does everyone agree on what strategic planning is?

https://koorandassociates.org/strategy-and-strategic-planning/does-everyone-agree-on-what-strategic-planning-is/

Your company will fail. Koor and Associates

https://koorandassociates.org/avoiding-business-failure/your-company-will-fail-v1/

Elite talent – what is it? Koor and Associates

https://koorandassociates.org/creating-business-value/elite-talent-what-is-the-purpose/

Tom Koor

Is your company actually a startup? V2

Is your company actually a startup? V2

 What is the purpose of this article?

Help shareholders, the board of directors, and C-Suite have a fact-based discussion regarding the status of your company.

The audience for this article includes: All companies, ranging from pre-revenue through to long established global companies.

This article does not provide tax, legal or financial advice.

You must do your own research and fact-based analysis using current and relevant information.

You can download a PDF of this article from: Is your company actually a startup V2

AI did not write this article.  100% human written.

 What are the critical learnings in this article?

  • Most companies need to become a startup again but don’t realize it. As a result, the wrong type of talent is in place, taking the wrong actions.
  • Most companies don’t last long. Most companies have poor value creation. Most transformations and major business changes have poor results.
  • Companies need to get into startup mode to validate and invalidate their assumptions regarding: customer needs and problems, and the number of customers willing and able to pay for a solution.
  • Board directors and C-Suite cannot learn startup mode knowledge, skills and decision-making processes because their brains have hard-wired biological responses and cognitive biases.

Where is your company it its life cycle?

#1 a startup

A startup is a temporary organization designed to search out a repeatable, scalable, and profitable business model with lots of potential customers who are willing and able to pay to solve their problems and needs.   Startups are not building a solution.  They are building a tool to learn what solution to build.

#2 most startups fail or end up as small companies.

#3 A scaling, growing profitable business enabling customers to achieve a competitively differentiated value proposition. Market share is growing, the overall market size may be growing, customers are strongly recommending the company, employees want to join and stay, etc.

#4 A slowly growing mature company. Market share is flat; the overall market size is flat.

#5 A company in decline. Market size may be shrinking. Market share is shrinking. Poor financial returns.  Transformation efforts producing little results. Etc.

Now what happens?1

Most companies need to become a startup again but don’t realize it. The company does not have a repeatable, scalable, and profitable business model with lots of potential customers who are willing and able to pay to solve their problems and needs.

  • Most companies don’t last long. The half life of US public companies is less than 11 years.
  • Most companies have poor value creation. 80% of corporations generate negative or little economic profit. Over 50% of public company generate negative returns over their entire life.
  • Most transformations and major business changes have poor results. Only 12% of major business changes produce lasting results.

 Why do companies need to become startups again?

Companies need to get into startup mode to validate and invalidate their assumptions regarding: customer needs and problems, and the number of customers willing and able to pay for a solution. This process must involve face-to-face interviews with customers by the CEO and other members of the C-Suite.

  • Customer needs and problems change.
  • The number of customers with historical problems and needs changes. Look at what happened to Blackberry: Blackberry was the cell phone leader in 2007. The iPhone was announced in 2007.  In 2008, the iPhone unit sales already exceeded Blackberry unit sales.
  • Customers perceive they get more value from a competitor.

Why are mature companies unable to get into startup mode?

The board of directors and C-Suite don’t realize they need to get into startup mode.

  • They try to do a transformation or major change – which usually fails.
  • I looked at recommended transformation approaches from the worlds leading consulting firms and business schools.
  • Only two of them (both business schools) recommended starting with understanding customers and their problems and needs. All the other have some variety of start with a vision or aspiration of where to end up. Building a solution which achieves the vision but does not address the problems and needs of cash paying customers results in failure.
  • None of the organizations I looked at recommended assessing and changing the board directors or C-Suite executives which led the company to failure.

Why can’t your board directors and C-Suite transform themselves?

  • Board directors and C-Suite cannot learn startup mode knowledge, skills and decision-making processes because their brains have hard-wired biological responses and cognitive biases.
  • One example is that the stress caused by financial turmoil triggers a threat response in the brain. The brain then relies on behaviors, knowledge and processes which have been successful in the past. This response leads to business failure when today’s reality is different from the past.
  • Another example is that their brains will strongly resist information which contradicts what they have deeply learned in the past.

What are the greatest challenges your board directors and C-Suite face?

  • Having the self awareness to recognize that they themselves must transform.
  • Having both the passion and ability to unlearn the past and learn new knowledge, skills, behaviours and actions.
  • Having the courage to recognize that they might not be the right person the lead the company forward.

What are your next steps?

  • Define the words/concepts you’re using, in a glossary. I’ve seen major confusion when the same words mean different things to different people.
  • Determine what stage your company is in by fact-based analysis of business performance and marketplace metrics. Exclude the impact of tax and financial engineering.  Assess the results of M&A by comparing the two separate companies with the final merged company.  I have often seen announcements in the financial press regarded the success of an M&A transaction while the post transaction market share, revenue, and profits were less than the two separate pre-transaction companies.
  • Determine the talent requirements for a board of directors and C-Suite in startup mode. Start with the components outlined in the article “What are the core components of talent?”2
  • Assess the cognitive biases of board directors and C-Suite and the resulting constraints on being able to move into startup mode. Determine what needs to change.

 Footnotes

1 Your company will fail. Koor and Associates

https://koorandassociates.org/avoiding-business-failure/your-company-will-fail-v1/

2 What are the core components of talent? Koor and Associates

https://koorandassociates.org/creating-business-value/core-components-of-talent/

What further reading should you do?

Is your company planning to fail? Koor and Associates

https://koorandassociates.org/avoiding-business-failure/is-your-company-planning-to-fail/

What is learning? Koor and Associates

https://koorandassociates.org/creating-business-value/why-have-your-minimized-your-talent/

Tom Koor

How will startups destroy your company? V2

How will startups destroy your company? V2

 What is the purpose of this article?

  • Help startup founders understand what’s necessary to destroy incumbents.
  • Help incumbent board of directors, CEO, C-Suite, and investors to understand what must change to both survive attacks by startups and to destroy established competitors.

You can download a PDF of this article from:How will startups destroy your company V2

What are the critical learnings?

  • The startup is a temporary organization designed to search out a repeatable, scalable, and profitable business model with lots of potential customers who are willing and able to pay to solve their problems and needs. Startups are not building a solution. They are building a tool to learn what solution to build.
  • Startups begin by making assumptions about the problems customers are willing and able to pay for, and about how customers would perceive the value proposition they’d achieve from the startup’s solution.
  • The startup is driven by immediate and ongoing understanding of the customer based on face-to-face interviews supplemented by surveys.
  • The assumptions are quickly validated or invalidated. Invalidation results either in a new set of assumptions or the startup stopping.

Where is your company today?

  • Your company is a large, well-established incumbent.
  • Your company is not in crisis.
  • Revenues and sales have been growing yearly and are forecast to continue to grow.
  • Your board of directors is well compensated.
  • Your C-Suite is well compensated.
  • Your board of directors and C-Suite agree that everything is going well and that there is no need to make any major changes to the board, the C-Suite, or the company’s business model.

How fast can your company end up in crisis?

  • Your company can go from double digit CAGR(Compound Annual Growth Rate) to negative CAGR within 3 years.1
  • Even country empires can fall within 5 years e.g. France in 1700, The Ottaman Empire in early 1900’s. the Soviet Union in the late 1900s. 2
  • Blackberry was the cell phone leader in 2007. The iPhone was announced in 2007.  In 2008, the iPhone unit sales already exceeded Blackberry unit sales.

Will your company survive crisis?

At any given moment, 5-7% of incumbents are in free fall.  Free fall occurs when a mature incumbent comes under severe attack by new insurgents.  Only 10%-15% of companies ever pull out of free fall. 3

What are the phases a startup goes through to destroy your company?

Phase 1 – create two sets of assumptions: #1 the urgent problem or need for which cash paying customers are seeking a solution; #2 a solution which enables the cash paying customer to achieve benefits (i.e. customer perception of value proposition) as a result of addressing their problem or need.

Phase 2 – validate or invalidate assumption #1 within two months. If invalided, either create a new set of assumptions or stop trying to launch a startup.

Phase 3 – assumes that assumption #1 has been validated.

  • Now validate assumption #2. Create a version of the solution that cash paying customers will both pay for and achieve benefits from. A solution can have three components: a) what you build, how the customer onboards what you build, how the customer perceives and measures the benefits they get.
  • If customers won’t pay or does not achieve benefits, you have invalidated assumption #2
  • The startup now has two choices: create a new assumption #2 OR stop trying to launch a startup.

Phase #4 – assumes that both assumptions #1 and #2 have been validated.

  • The startup has some revenue.
  • The solution may be very unprofitable because the startup has manual processes and technology which is inefficient and will not profitably scale.
  • The startup now makes some assumptions regarding lifetime customer profitability and customer acquisition costs and the number of future customers.
  • The startup creates a plan to grow the business, with milestones directly related to the metrics defined by the milestones.
  • At any point in phase #4 the assumptions may be invalidated. There could be many reasons e.g. turns out that there are than many customers, customer problems and needs change, competition changes, etc.

 Startups will have far better understanding of customers than your company.

  • What the cash paying customers perceive as the urgent problems and needs they are actively seeking a solution.
  • What the cash paying customer perceives as the value of the solution and the implications of not addressing the problem or need.
  • How the customer perceives your current value proposition.
  • How the customer perceive the startup’s competitively differentiated value proposition.

 How does the startup gain this deep customer understanding?

  • The startup does up to 100 face to face (in person or Zoom) meetings with potential customers.
  • Why?
  • To validate that there is an urgent problem or need for which customers are seeking a solution and the customers a both willing and able to pay for.

What is the CEOs role?

  • At the pre-revenue stage the CEO is spending up to 40 hours a week (of their 80-hour work week) on learning about customers.

What other ways does the startup maintain deep understanding of customers?

  • There is a massive amount of information coming in from many sources e.g. ongoing one-on-one interviews, focus groups, surveys (Net Promoter Score), interactions with call centres, customer support, customer onboarding, notes from sales and marketing people, interactions with 3rd parties that also deal with customers (suppliers), etc.
  • The directors on the board have current and relevant knowledge of the marketplace, customers, competitors, etc.
  • The startup never stops experiments with customers.

 What is done with this flood of customer information?

  • Software (Thematic4 and ethnographic5) analyzes this information.
  • It is critical to have detection of changes in the customer perception of: problems, needs, and startup’s value proposition.

How does the startup know they will be profitable?

  • The key metric is lifetime customer profitability exceeding customer acquisition costs.
  • At the pre-revenue stage, theses metrics are assumptions. As the startup builds and scales, these metrics become facts.
  • The metrics may be tracked in a variety of categories: e.g. by cohort, channel, geography, demographic, etc.
  • It’s critical to identify a downward trend in the customer lifetime profitability/aquation cost ratio.

Does the startup start building a solution immediately?

  • No
  • The startup is a temporary organization designed to search out a repeatable, scalable, and profitable business model with lots of potential customers who are willing and able to pay to solve their problems and needs. Startups are not building a solution. They are building a tool to learn what solution to build.
  • The startup may do things manually at first, in order to improve customer understanding at low cost.

What is the underlying reason for the startup being able to destroy your company?

The founders and later the CEO and C-Suite have a set of core talents that is superior to your company.

What are the 10 components of talent?

  • Self Awareness
  • Character
  • #Relationship skills:
  • Communications
  • Crystallized intelligence
  • Fluid intelligence
  • Cognitive skills
  • Ability to quickly learn and unlearn: paradigms, frameworks, methodologies, data, facts, knowledge.
  • Creativity
  • Physical capabilities.

Further detail is available in Appendix A

What are your next steps?

  • Define the words/concepts you’re using, in a glossary. I’ve seen major confusion when the same words mean different things to different people.
  • Assess your company relative to a startup described above. Most long established companies have returned to the startup stage, but don’t realize that. It’s hard to build a roadmap for future success if you don’t know where you’re starting from.
  • Describe the talent a startup would need to be able to destroy your company. Include the board of directors, CEO, and C-Suite. Use the framework described in Appendix A.
  • Assess the talent of your company relative the startup description in 3) above.

Footnotes

1 Chris Zook and Charles Allen, The founders mentality, 2016, Page 52

2 Chris Zook and Charles Allen, The founders mentality, 2016, Page 106

3 Chris Zook and Charles Allen, The founders mentality, 2016, Page 51

4 software used to identify, organize, and interpret patterns of meaning (themes) within qualitative data such as interview notes

5 software which supports observational research method where researchers immerse themselves in customers’ natural environments—homes, workplaces, or stores—to understand behaviors, motivations, and pain points in real-time

What further reading should you do?

Your company will fail. Koor and Associates

https://koorandassociates.org/avoiding-business-failure/your-company-will-fail-v1/

Is your company planning to fail? Koor and Associates

https://koorandassociates.org/avoiding-business-failure/is-your-company-planning-to-fail/

Appendix A – What are the core components of talent?

Even more detail is available in the following article:

https://koorandassociates.org/creating-business-value/core-components-of-talent/

 #1 Self Awareness

  • Internal self-awareness: How clearly we see and understand ourselves. Understanding what our competitive strengths, weaknesses, and capabilities are.
  • External self-awareness: understanding how other people view us.

#2 Character

  • VME (Values, Morals, and Ethics) Warren Buffett supposedly said “..looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if you don’t have the first, the other two will kill you.”
  • Courage: It takes courage to make the right decision. The right decision is often not: the cheapest, easiest, lowest risk to the company, lowest risk to you, and what everyone else is doing.
  • Perseverance, especially against all odds.
  • Knowing when to stop persevering. One leader told me “If you’re digging yourself into a hole, stop digging.”

#3 Relationship skills:

  • The ability to create and sustain a network of personal relationships.
  • Persuasion and negotiation, which is key to managing different points of view and interests.
  • Creating and maintaining followers. A leader without committed followers is not a leader.

#4 Communications

Communications activities include:

  • Writing, speaking, singing, drawing, and body language
  • Speaking and singing also include tones, pitch, etc.

Communications is two way:

  • Broadcasting
  • Listening, which includes analysis of input

#5 Crystallized intelligence

  • Crystallized intelligence is comprised of historical: skills, knowledge (including ways to think, mental paradigms, methodologies), and data.

#6 Fluid intelligence

  • The ability to solve problems without past experience. This is critical for innovation, which is coming up with new and better solutions.

#7 Cognitive skills

  • Long-term memory
  • Working memory: hang onto information while using it
  • Logic and reasoning
  • Visual processing
  • Processing speed
  • Attention
    1. Sustained – for long periods of time
    2. Selective – without distraction
    3. Divided – doing two things at once

#8 Ability to quickly learn and unlearn: paradigms, frameworks, methodologies, data, facts, knowledge.

 #9 Creativity

  • The ability to think about a task or a problem in a new or different way

#10 Physical capabilities. These may include:

  • Senses, including sight, hearing, touch, smell, taste
  • Strength and endurance
Tom Koor

AI is not accountable for benefits.

AI is not accountable for benefits.  I have seen countless articles start out with AI not delivering benefits.  AI is not accountable for benefits.  Management is accountable for benefits. The way to solve this return on capital issue to two-fold: First, improve the processes used by management to make investment decisions (including AI) and to achieve benefits. Second, improve management.

Tom Koor

What is a startup? V3

What is a startup? V3

What is the purpose of this article?

This article enables a discussion about how to define what a startup is.

The audience for this article includes: investors, founders, board of directors, C-suite, and investment analysts.

This article applies to all companies, ranging from pre-revenue through to long established global companies.

This article does not provide tax, legal or financial advice. You must do your own research and fact-based analysis using current and relevant information.

AI did not write this article.  100% human written.

You can download a PDF of this article from: What is a startup V3

What are the critical learnings in this article?

  • There are no commonly accepted definitions regarding startups.
  • There are no commonly accepted definitions of a successful startup.
  • Each of the 5 US universities I looked at has different definitions, metrics, and processes for startups.

 Are there commonly accepted definitions regarding startups?

There are no commonly accepted definitions regarding startups. I looked at what the following 5 U.S. Universities have published publicly regarding their pre-revenue startups which have no customers or users: Harvard, MIT, Stanford, University of California Berkely, and Wharton. I have deliberately excluded the names of the five universities from the following definitions. I have shown some key finding for each of the five universities.

#1 What is a startup?

  • Teams focused on “defining their offering or exploring customer validation.
  • A startup is “validating their target market” and building “viable sustainable venture”.
  • A startup is “founders who are in the prototyping phase” “The entity is actively building or testing a product”
  • Could not find a formal definition. Some discussion that the intent a startup has high growth potential is preparing for venture capital investment.
  • “A temporary organization designed to search for a repeatable and scalable business model”.

#2 What is the process for launching a startup?

  • Has a proprietary process. First phase is focused on problem identification. The second phase validates the solution with customers, using the Minimum Viable Product the founders have built.
  • Has a proprietary process, based on Lean Startup methodology. There is a monthly simulated board meeting. Expectation that founders will meet with customers.
  • Structured 10-week curriculum, requiring 2-3 meetings with mentors.
  • Has a proprietary process. 50+ workshops along with a mentor.
  • Has a proprietary process. Starts with identifying key assumptions e.g. Do customers want this? Can this be a business?

#3 What is the approach for the first week of a startup?

  • Orientation week. Integrating founders into the university’s startup community and ecosystem
  • Simulate making decisions. Networking with senior executives. Intense one-week bootcamp.
  • Could not find published information.
  • Only information I could find was matching with mentors.
  • Only information I could find was 2.5-hour orientation.

#4 What are the metric for measuring the progress of a startup?

  • Some of the milestones included: customer definition, problem validation.
  • Weekly goal setting. Each team defines their own Key Performance Indicators.
  • Could not find published information.
  • Could not find published information.
  • Could not find published information.

#5 What is the definition of a pivot for a startup?

  • Could not find published information.
  • Could not find published information.
  • Could not find published information.
  • Could not find published information.
  • Could not find published information.

#6 What are the metrics which indicate the startup founders should stop or pivot?

  • If current solution does not address customer pain, pivot.
  • Pivot when key hypotheses are invalidated by data.
  • Could not find published information.
  • Could not find published information.
  • Could not find published information.

#7 What is the definition or set of metrics for when the startup is no longer a startup?

  • Program success is measured by student engagement, not commercial success. Startup success measures included: revenue, valuation, launching, partnerships, etc.
  • Successful transition out of the university environment.
  • Capital raised or graduation to accelerators.
  • Graduation to the university’s accelerator program. Raising capital from the university’s startup fund.
  • Graduation to the university’s accelerator program

 What does success look like to the founders?

The following are my personal observations regarding what success might look like.

  • Learn the concepts for launching a company.
  • Launch a company which generates enough profit to meet founders’ financial needs. If the founders are gone, the company disappears.
  • Launch a company which generates enough profit to meet founders’ financial needs. If the founders are gone, family /children may take over, or other owner/operators take over.
  • Launch a company which will generate enough profit to attract investors and enable founders to make large amounts of money by selling some or all of their equity.

 What are your next steps?

If you are a founder:

  • Define the words/concepts you’re using, in a glossary. I’ve seen major confusion when the same words mean different things to different people.
  • Agree with the other founders on what success looks like. Founders with different end results will likely fail. Create and sign a founders’ agreement.
  • Agree with the other founders regarding: What is a startup? What is the overall process the founders will use the launch the startup? What will happen in week 1? What are the metrics for measuring the progress of the startup? What is the definition of a pivot? What are the metrics which indicate that the founders should stop or pivot? What is the definition or set of metrics which indicate that the startup is no longer a startup?

What further reading should you do?

How will startups destroy your company? Koor and Associates

https://koorandassociates.org/avoiding-business-failure/how-will-startups-destroy-your-company/

How will undergraduate founders destroy your company? Koor and Associates

https://koorandassociates.org/avoiding-business-failure/how-will-undergraduate-founders-destroy-your-company/

Is your company actually a startup? Koor and Associates

https://koorandassociates.org/avoiding-business-failure/is-your-company-actually-a-startup/

Is your company planning to fail? Koor and Associates

https://koorandassociates.org/avoiding-business-failure/is-your-company-planning-to-fail/

 

 

Tom Koor

How will undergraduate founders destroy your company?

How will undergraduate founders destroy your company.

 What is the purpose of this article?

  • Help existing companies improve the return on the investment they make in new business ideas.
  • Help startup founders succeed by reducing the time spent on ideas with little market demand. Help founders understand what’s necessary to destroy incumbents.

The audience for this article includes business, ranging from pre-revenue through to long established global companies.

This article does not provide tax, legal or financial advice. You must do your own research and fact-based analysis using current and relevant information.

AI did not write this article.  I wrote every word.

You can download a PDF of this article from: How will undergraduate founders destroy your company

How do you read this article.

The article reflects my observations regarding the early-stage startup programs at 5 US universities.

The Appendix contains brief highlights of these programs.

What are the critical learnings in this article?

  • Founders first go through a program to validate that cash paying customers believe they have a problem which needs a solution.
  • The first step is to have face-to-face interviews with cash paying customers.
  • There should a multi-disciplinary set of founders e.g. business, technical, social sciences
  • Program, mentor, and founder problems are addressed by AI.
  • The programs have a structured learning process to rewire the founders’ brains over a period of several semesters.
  • The program is part time, with the founders taking other courses during the semester.

Why focus first on validating that a cash paying customers believe they have a problem?

  • This saves founders’ time. No point in building a solution people who don’t think they have a problem.
  • The founders are not building a solution. They are building a temporary organization to learn what solution to build
  • The founders can think about the necessary solution once they know the problem to focus on.

 Why are immediate face-to-face interviews with cash paying customer critical?

  • This immediately identifies if founders have both the desire and skills to meet with cash paying customers. Weaknesses in this area can be addressed through a combination of team changes and talent development.
  • Consulting reports and industry surveys rarely focus on the specific problem the founders are tying to understand.
  • Surveys by founders don’t allow the deep understanding of problems resulting probing customer dialogue such as the Five Whys root cause discussion.

Why does success depend on a multi-disciplinary team?

  • There are many aspects to how cash paying customers perceive a problem: financial; functional, operational & technical; and emotional. All decisions are emotional.
  • A silo-based team e.g. all engineers, often lacks the broad base of skills to understand how customers perceive their problem and the value of addressing the problem.
  • A multi-disciplinary team reduce the cognitive load on founders’ brains, reducing the need to learn and unlearn, and enabling more focus.

Why do the programs, founders, and mentors use AI tools?

Some of the many program pain points which AI can address are:

  • Tracking and reporting on the long-term outcomes of founders and startups.
  • Matching potential founders across faculties to create multi-disciplinary teams.
  • Helping to analyze program applications.
  • Matching founders with mentors and advisors.

Some of the many founder pain points which AI can address are:

  • Enabling business founders to create software without becoming software experts.
  • Enabling technical founders to create marketing and sales materials without becoming marketing and sales experts.
  • Helping founders prepare for face-to-face interviews by interacting with AI simulated customers.
  • Providing multiple founder team equity split scenarios.

Some of the many mentor pain points which AI can address are:

  • Saving mentor time at the beginning of the meeting by generating a pre-read package.
  • Helping mentors better communicate with founders by coaching the mentors on appropriate communications approaches.
  • Answering simple founder questions using AI coaches, allowing founders to focus on the most difficult and valuable issues.

Universities are implementing AI enabled infrastructure to reduce administrative load and enable both more and better startups to succeed. One example is MIT’s Orbit.

Why do the founders’ brains need to be rewired by a structured learning process?

  • Learning requires biological changes to the founders’ brain structure e.g. new connections among neurons, strengthen connections among neurons, and delete connections. The brain will naturally resist ideas and knowledge which is not consistent with historical ideas and knowledge.
  • The structured learning process encourages founders need to quickly learn new things, do things they are not comfortable with doing, do things they don’t want to do.
  • The founders don’t need to use cognitive capacity to figure out what are the critical things to do. The founders can use their cognitive capacity to learn and figure out how to execute what is critical.
  • This rewiring takes place over several semesters resulting in founders who can quickly learn and unlearn.

What are your next steps?

  • Define the words/concepts you’re using, in a glossary. I’ve seen major confusion when the same words mean different things to different people.
  • Do your own research and fact-based analysis using current and relevant information.
  • Compare your company’s process, talent, and technology for assessing new customer needs with the approach taken by the leading US Universities.
  • Transform your company’s approach. You may need to make talent changes as well as implement talent development process.  Your capital and talent allocation processes may need transformation.

What further reading should you do?

Is your company planning to fail

https://koorandassociates.org/avoiding-business-failure/is-your-company-planning-to-fail/

Do you understand your customers

https://koorandassociates.org/understanding-customers/do-you-understand-your-customers/

Why is learning critical for your company’s success

https://koorandassociates.org/avoiding-business-failure/why-is-learning-critical-for-your-companys-success/

Appendix – 5 U.S. Universities. Startup programs for undergraduate students

This appendix provides some very brief highlights of undergraduate student startup programs.

Stanford University

  • Stanford has a decentralized set of student run and departmental programs.
  • Cardinal Ventures is a 10-week university wide student run program, on a part time basis during semesters.
  • BASIS is a first-year university wide undergraduate program with $100,000 prize money.

University of California, Berkely

Berkely has university wide structured funnels.

  • The STEP program is a university wide “top of the funnel” program with 1,000 new students annually. 70-75% are undergraduates. This is a 10 week long, part-time, program during school semesters.
  • Free Ventures is a student run program during school semesters. The expectation is at least 5 hours a week devoted to the startup.

Harvard

Harvard has a single process which encompasses all 13 schools.

  • The i-Lab program has three stages: Explore for students exploring ideas or looking for teams. Test is for teams with ideas. The focus is to validate that there are cash paying customers with problems. Propel is focused on All programs are semester based and are part-time

Wharton

The Venture Lab serves the entire university and is based in the business school.

  • The Venture Initiation Program (VIP) Venture Track runs on a rolling basis with no fixed end date for each startup. The program is part-time, during semesters.

MIT

MIT has a highly structured funnel.

  • MIT Sandbox Innovation Fund provides seed funding as milestones are met. Expectation of at least 6 hours per week. This part time during the semester program has no fixed end date.
  • VMS is an indefinite part time program with 90 minute in person mentoring sessions every 4-6 weeks. A team in VMS may be other MIT startup programs.
Tom Koor

Your greatest challenge is to learn, and unlearn, faster and better than before.

Your greatest challenge is to learn, and unlearn, faster and better than before.

The purpose of this article is to share my learnings and unlearnings, with the expectation that some will be of value to you. This article was 100% written by me – not by AI.  When you send me an email, my response is 100% written by me.

What have been my most valuable learnings in the past three months?

  • I forgot a learning from 30 years ago. If a leader does not believe they have a critical issue or problem, it is impossible for me to change their mind.  The reasons are based on cognitive psychology and neuroscience.
  • CEOs of successful companies spend 20-25% of their time listening to and understanding cash paying customers by meeting and talking with them. CEOs of poorly performing companies spend 3% of their time on this.  CEOs of fast growing early stage companies spend 50% (or more) of their time listening to and understanding cash paying customers.
  • I’m using AI to find fact-based reports with the data to answer to my very specific questions. I don’t use AI to make recommendations.
  • The psychological and biological construction of brains has helped people survive for 10,000 of years. That same psychological and biological construction results in most business leaders failing in today unpredictable, fast changing, and hyper competitive world.
  • My greatest challenge is to learn, and unlearn, faster and better than ever before.

What is my personal update?

  • Mentored a startup at the Hatchery, University of Toronto, Department of Engineering.
  • Accepted as a mentor at the Health Innovation Hub at the University of Toronto, Faculty of Medicine.
  • Continued my long-term fundraising for the Geoff Carr Fellowship at Lupus Ontario. Over the past 19 years family, friends, neighbours, and colleagues have contributed over 283,000. You can use the donation link later in this update
  • Continued as a member of the Angel Capital Association in the US and the Institute of Corporate Directors in Canada.
  • Continued to share with you, and on my website, some of what I’ve learned and unlearned, with the intent that some of you will find value. The learnings and unlearnings are applicable to any size company, ranging from early-stage startups to large global enterprises.
  • Continued as Board Director at a private company.

I continue to focus my time to maximize the value and impact of my two professional purposes: #1 Enabling current and emerging business leaders to succeed, #2 Enabling business leaders to have a positive impact on society.

Sharing my learnings

Below are links to my website containing new and revised articles since my last update in September. The critical learnings from each article are included. Each article designed to enable discussion among founders, owners, shareholders, investors, CEOs, and boards of directors. The learnings and unlearnings are applicable to any size company, ranging from early-stage startups to large global enterprises.

Links to my points-of-view articles:

What are the core components of talent? V7

  • There are 10 core components of talent.
  • People often focus on just 1 component of talent: Crystallized intelligence (e.g. historical skills, knowledge, experience, etc.) and ignore the other 9. This often leads to major problems, because historical skills, knowledge, and experience are quickly becoming obsolete.
  • The core components of talent fit into the qualification’s sections of a typical job description.
  • The core components of talent fit into the key competencies section of a typical job scorecard.
  • An AI worker would have both a job description and a job scorecard.
  • If AI is assisting a person in a role, then need clarity on how the AI’s 10 core components of talent are improving the person’s job scorecard.
  • What is the definition of an AI worker? What is the definition of an AI agent? What is the definition of AI? I don’t know.

https://koorandassociates.org/creating-business-value/core-components-of-talent/

What is learning? V3

  • Learning is a biological process of changing your brain structure. The key changes to enable learning are new connections between neurons and strengthening the connections.
  • The best way for you to learn is to create your own conclusions and recommendations based on your own analysis of data you’ve collected.
  • The worst way for you to learn is to read reports and attend presentations.
  • Learning and unlearning is hard to do, especially if you’ve been a successful leader.

https://koorandassociates.org/creating-business-value/why-have-your-minimized-your-talent/

What is a startup? V2

  • A startup is a temporary organization designed to search out a repeatable, scalable, and profitable business model with lots of potential customers who are willing and able to pay to solve their problems and needs.1 Startups are not building a solution. They are building a tool to learn what solution to build.2
  • Your company may slip back into the startup stage at any point. Changes may mean that you no longer have a profitable business model with lots of potential customers who are willing and able to pay to solve their problems and needs.
  • Never ending customer, competitor, external environment, talent, operational, and financial monitoring is key to ensuring your company does not slip back to being a startup.

https://koorandassociates.org/the-startup-journey/what-is-a-startup/

Strategic Advisor vs Consultant vs Coach vs SME vs Trainer

  • The focus of the strategic advisor is helping business leaders learn to solve their critical problems.
  • Learning is a biological process of changing your brain structure.
  • The best way for you to learn is to create your own conclusions and recommendations based on your own analysis of data.
  • The worst way to learn is by reading reports and attending presentations.
  • Determine what combination of: strategic advisor, consultants, coaches, SME, and trainers your company needs. Identify which roles can be humans vs AI workers (often referred to as AI Agents or just AI) vs AI

https://koorandassociates.org/creating-business-value/strategic-advisor-vs-coach-vs-consultant/

MY NPS (Net Promotor Score)

I’m doing what I advise companies to do – getting my NPS.  I am asking you to complete the attached anonymous survey which asks you: “How likely are you to recommend me, or not recommend me, and why?”

Bain developed the Net Promoter Score process. They believe one question is the best predictor of future company behaviour. Very simply, asking customers how likely they would be to recommend or not recommend the company, followed by the question why. The answers enable companies to determine what they need to change.

I am doing the same thing, getting facts as to how I’m perceived and then deciding what to change, if anything.

The survey is totally anonymous.  I don’t know who responds or who does not respond.  I don’t know who gives what answers.  Thus, you can be honest in your response.

The following is a link to my survey:

Tom’s NPS Survey Link

Thank you in advance for your help.  The following is a link to the Bain website homepage for Net Promoter Score, which contains several short articles.

Link to Bain NPS articles

To support the Geoff Carr Fellowship at  Lupus Ontario

Link to my Geoff Carr Fellowship fundraising page

Tom Koor

What are the core components of talent? V7

What are the core components of talent? V7

 What is the purpose of this article?

Enable founders, the C-Suite, board of directors, investors, and others to discuss the company’s talent requirements.

This article does not provide tax, legal or financial advice.

You must do your own research and fact-based analysis using current and relevant information.

AI did not write this article.  100% human written.

You can download a PDF of this article from: What are the core components of talent V7

How do you read this article?

  • The body of the article contains description of the 10 core components of talent.
  • The appendix describes the core skills that will be even more important in 2030 than 2025. The appendix is based on a report from the World Economic Forum. The value of future skills is illustrated using the board of directors.

 What are the critical learnings in this article?

  • There are 10 core components of talent.
  • People often focus on just 1 component of talent: Crystallized intelligence (e.g. historical skills, knowledge, experience, etc.) and ignore the other 9. This often leads to major problems, because historical skills, knowledge, and experience are quickly becoming obsolete.
  • The core components of talent fit into the qualification’s sections of a typical job description.
  • The core components of talent fit into the key competencies section of a typical job scorecard.
  • An AI worker would have both a job description and a job scorecard.
  • If AI is assisting a person in a role, then need clarity on how the AI’s 10 core components of talent are improving the person’s job scorecard.
  • What is the definition of an AI worker? What is the definition of an AI agent? What is the definition of AI? I don’t know.

What are the 10 core components of talent? – summary

People often focus on just 1 component of talent: Crystallized intelligence (e.g. historical skills, knowledge, experience, etc.) and ignore the other 9.  This often leads to major problems, because historical skills, knowledge, and experience are quickly becoming obsolete.

#1 Self Awareness

#2 Character

#3 Relationship skills:

#4 Communications

#5 Crystallized intelligence

#6 Fluid intelligence

#7 Cognitive skills

#8 Ability to quickly learn and unlearn: paradigms, frameworks, methodologies, data, facts, knowledge.

#9 Creativity

#10 Physical capabilities.

What are the 10 Core components of talent? – details

#1 Self Awareness

What are the two types of self-Awareness?1.

  • Internal self-awareness: How clearly we see and understand ourselves. Understanding what our competitive strengths, weaknesses, and capabilities are.
  • External self-awareness: understanding how other people view us.

What is the value of self awareness?

  • How can you succeed if you don’t know how others perceive you, and which perceptions you need to change? E.g. Decision makers who would hire you or promote you? Customers who would buy from you? Someone deciding whether or not to become your spouse?
  • How can you succeed if you don’t understand your capabilities, the implications of your capabilities, and which ones to change? E.g. I’ve met people who have limited skills in certain areas but at the same time hope that companies that are looking for world class skills will hire them. The result is they don’t get hired, sometimes accompanied by massive disappointment.
  • Internal self-awareness is associated with happiness, and higher job and relationship satisfaction.1
  • Employees perceive leaders with higher external self-awareness as: having better relationships with them and being more effective leaders.1

How many people have self-awareness?

  • Most people believe they are self-aware.1
  • Only 10-15% of people have self awareness.1
  • 87% of Stanford University MBA students rate their academic performance above the median. 94% of U.S. college professors rate themselves superior to their colleagues. 2
  • 96% of leaders believe their people skills are above average. 3

What are the challenges in gaining self-awareness?1

  • People don’t always learn from experience. Experience leads to over-confidence in self-knowledge
  • The more power a person has, the more likely they are to over-estimate their skills and abilities.
  • People who spend time in introspection are less self-aware, have worse job satisfaction, and well-being

#2 Character

  • VME (Values, Morals, and Ethics) Warren Buffett supposedly said “..looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if you don’t have the first, the other two will kill you.”
  • Courage: It takes courage to make the right decision. The right decision is often not: the cheapest, easiest, lowest risk to the company, lowest risk to you, and what everyone else is doing.
  • Perseverance, especially against all odds.
  • Knowing when to stop persevering. One leader told me “If you’re digging yourself into a hole, stop digging.”

#3 Relationship skills:

  • The ability to create and sustain a network of personal relationships.
  • Persuasion and negotiation, which is key to managing different points of view and interests.
  • Creating and maintaining followers. A leader without committed followers is not a leader.
  • Industry disruption and major change require the identification and creation of new relationships and spending less time on obsolete relationships.

#4 Communications

Communications activities include:

  • Writing, speaking, singing, drawing, and body language
  • Speaking and singing also include tones, pitch, etc.

Communications is two way:

  • Broadcasting
  • Listening, which includes analysis of input

Communications can have a variety of outcomes, including:

  • Understanding other people
  • Changing the belief, emotions, and behaviours of others.
  • Learning – such as facts, knowledge, ways of thinking.
  • Building trust and relationships.
  • Persuading people to take certain actions.
  • Gaining the emotional and intellectual support of people.

#5 Crystallized intelligence4

  • Crystallized intelligence is comprised of historical: skills, knowledge (including ways to think, mental paradigms, methodologies), and data.
  • The need for crystallized knowledge varies enormously depending on the situation.
  • Many years of experience may be very valuable for a doctor doing knee replacements.
  • Understanding what customer needs were 5 years ago, and how those were met, may be of little value when: customers have changed; needs have changed; and competition has changed.

#6 Fluid intelligence4

  • The ability to solve problems without past experience. This is critical for innovation, which is coming up with new and better solutions.
  • The future is impossible to predict but actions and decisions are focused on this unpredictable future.
  • The future will also be different from the past. i.e. there won’t be historical experience to draw upon.
  • Able to provide direction when there is no map. 5

#7 Cognitive skills6

  • Long-term memory
  • Working memory: hang onto information while using it
  • Logic and reasoning
  • Visual processing
  • Processing speed
  • Attention
    1. Sustained – for long periods of time
    2. Selective – without distraction
    3. Divided – doing two things at once

#8 Ability to quickly learn and unlearn: paradigms, frameworks, methodologies, data, facts, knowledge.

  • The founders of the majority of unicorns (startups which achieved a $1 billion valuation) had no previous domain experience. 7
  • Roche paid $1.9 billion US for Flatiron Health, a cancer electronic records company. The Flatiron founders (Nad Turner and Zach Weinberg) had no background in cancer. They came from advertising.8

 #9 Creativity

A Google search of creativity reveals many very different definitions of creativity. Two definitions are:

  • “The ability to think about a task or a problem in a new or different way”
  • “Creativity involves two processes: thinking, then producing. If you have ideas but don’t act on them, you are imaginative but not creative”

#10 Physical capabilities. These may include:

  • Senses, including sight, hearing, touch, smell, taste
  • Strength and endurance

How do the core components of talent fit into a typical job description?

The core components of talent fit into the qualification’s sections of a typical job description.

  • Job Title:
  • Job Summary: High-level overview (2-4 sentences) of the role and its purpose within the company.
  • Company Overview: Introduction to the company’s mission, values, and culture.
  • Duties and Responsibilities: Primary tasks and essential functions.
  • Required Qualifications: Must have skills, education, experience, and certifications. CORE COMPONENTS OF TALENT
  • Preferred Qualifications: Nice-to-have skills and experience. CORE COMPONENTS OF TALENT
  • Reporting Structure: Who does the role report to.
  • Location & Working Conditions: Specifies the job location (e.g., in-office, remote, hybrid) and any relevant physical demands or environmental factors.
  • Compensation and Benefits: Often includes a salary range (though not always) and a summary of key benefits like health insurance, retirement plans, and paid time off.

How do the core components of talent fit into a typical job scorecard?

The core components of talent fit into the key competencies section of a typical job scorecard.

  • Role Mission: A sentence that defines the ultimate purpose of the role.
  • Key Result Areas (KRAs) / Outcomes: A short list (3-5 items) of the measurable results the person is accountable for.
  • Key Performance Indicators (KPIs): The specific metrics used to track the KRAs.
  • Key Responsibilities / Activities: The primary actions the person will take to achieve the outcomes. This links the “how” (activities) to the “what” (outcomes).
  • Key Competencies: The essential behaviors, skills, and traits a person needs to succeed in the role. CORE COMPONENTS OF TALENT.
  • Company’s Core Values: Lists the company’s core values to ensure what the employee does is aligned with the core values.

What are the implications of AI?

  • An AI worker would have both a job description and a job scorecard.
  • If AI is assisting a person in a role, then need clarity on how the AI’s 10 core components of talent are improving the person’s job scorecard.

What are some of the AI challenges?

  • What is the definition of an AI worker? What is the definition of an AI agent? What s the definition of AI? Often I hear people explaining something will say “The solution is based on AI”. That is not an explanation. It’s similar to saying “The solution is based on people”
  • Since 1993 Visa AI had been deciding whether to decline or accept credit card transactions.
  • AI is screening job applications and determining who to interview or not interview.
  • AI is making stock buying and selling decisions in high frequency trading.
  • Cybersecurity AI is making decisions on what to do with threats without human oversight.

What are your next steps?

  • Define the words/concepts you’re using, in a glossary. I’ve seen major confusion when the same words mean different things to different people.
  • Review job descriptions and job scorecards. Start with the board of directors and C-Suite.  Measurable results and KPIs are critical.
  • Include AI workers and AI assistants in the above.

Footnotes

1 What self-awareness really is (and how to cultivate it) – Harvard Business Review 2019 January 04

https://hbr.org/2018/01/what-self-awareness-really-is-and-how-to-cultivate-it

We’re all above average

2 https://www.northcoastjournal.com/humboldt/were-all-above-average/Content?oid=4206392&media=AMP+HTML

Aspiring to leadership: Technical knowledge vs people skills

3 https://smartleaders.ca/aspiring-to-leadership-technical-knowledge-vs-people-skills/

4 Fluid vs crystallized intelligence

https://www.simplypsychology.org/fluid-crystallized-intelligence.html

5 The five new foundational qualities of effective leadership, PWC, Strategy+Business, June 14 2023

https://www.strategy-business.com/article/The-five-new-foundational-qualities-of-effective-leadership

6 What are cognitive skills?

https://www.mindmattersjo.com/what-are-cognitive-skills.html

7 Ali Tamaseb, Super Founders, New York, New York, Hatchette Book Group, 2021, Page 49

8 Ibid., 53

 What further reading should you do?

What is learning? Koor and Associates

https://koorandassociates.org/creating-business-value/why-have-your-minimized-your-talent/

Is your company planning to fail? Koor and Associates

https://koorandassociates.org/avoiding-business-failure/is-your-company-planning-to-fail/

Appendix A What are the core skills that will be even more important in 2030 than 2025.

The following core skills are important in 2025 and will be even more important in 2030.  Who believes this? Over 1,000 global companies with over 14 million employees.  The following ranking reflects the % of companies that believe both core in 2025 and more important in 2020. 1

  • Analytical thinking
  • Resilience, flexibility, and agility
  • Leadership and social influence
  • Creative thinking
  • Technological literacy
  • Curiosity and lifelong learning
  • Talent management
  • AI and big data
  • Systems thinking

What are core skills required in 2025, but will not increase in importance in 2030?

The following ranking reflects the % of companies that believe both core in 2025 and 2030.1

  • Motivation and self awareness.
  • Empathy and active listening.
  • Service orientation and customer service.
  • Resource management and operations.

How valuable are the core skills which will be more important in 2030?

Let’s use a simple example to show the value of core skills. Which of the two following two companies will be more successful?

Company A board of directors:

  • Analytical thinking – jumps to conclusions with little evidence. Make decisions based on gut feelings and personal anecdotes.
  • Resilience, flexibility, and agility – cannot deal with sudden unexpected changes in the business environment. Update the strategic plan once a year.
  • Leadership and social influence – poor communications with shareholders, C-Suite, employees, etc.
  • Creative thinking – relies on outdated mental models and past successes. Rejects new ideas because don’t fit the current way things are done. Focuses on minimizing risks.
  • Technological literacy – don’t ask the specific problems technology investments will solve. Defer all technology decisions to one technical expert on the board. Do not use current technology, e.g. AI tools, to carry out their board duties.
  • Curiosity and lifelong learning – little curiosity. Board decisions based on 10-year-old understanding of customer needs and solutions.
  • Talent management – unable to determine talent requirements for a CEO who will be successful in an uncertain and turbulent future. Unable to assess CEO candidates for future success, resulting in poor CEO performance and company performance.
  • AI and big data – not setting metrics for AI initiatives to directly impact value creation. Not understanding the AI talent, and talent compensation, required to drive competitively differentiated customer perceived value propositions.
  • Systems thinking – focus on symptoms and not able to identify root causes. Cannot identity that their decisions will have follow-on reaction. Struggle to deal with complex and inter-related problems. The analogy is: if playing chess, don’t consider possible future moves, even the reaction to the first move.

Company B board of directors:

  • Analytical thinking – asks for data, metrics, and assumption behind recommendations. Focus on metrics which drive value to customers, employees, and investors.
  • Resilience, flexibility, and agility – Recognize that it is impossible to predict the future. Use scenario planning. Review and revise strategies whenever facts and assumptions change.
  • Leadership and social influence – excellent communications with shareholders, C-Suite, employees, etc.
  • Creative thinking – challenges the status quo and proactively seeks unconventional ideas.
  • Technological literacy – questions focus on the customer and business impact of technology investments. Use current technology to carry out their board duties e.g. AI tools.
  • Curiosity and lifelong learning – recognize that much of their own historical knowledge and experience is out of date. Regularly bring in experts to update the board. Takes advantage of the advisory board supporting the board. Continuous personal education to have current and relevant knowledge.
  • Talent management – the board has long-term process to assess and develop successors for the CEO and C-suite. Company continues to succeed as CEOs and C-Suite members change.
  • AI and big data – directors are using AI tools to challenge and validate what company leaders are telling the board.
  • Systems thinking – recognizes that the company (directors, C-Suite, employees, customers, investors, etc.) exist in a complex inter-related ecosystem. Understands the interrelationships and how business success is impacted by this ecosystem. The analogy is: if playing chess, considers possible future moves, even the reaction to the first move.

Footnotes

1 Future of Jobs Report 2025, World Economic Forum Jan 07, Page 41

https://www.weforum.org/publications/the-future-of-jobs-report-2025/