value creation

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/

 

Tom Koor

What is learning? V3

What is learning? V3

 What is the purpose of this article?

  • This article enables a discussion about what is learning and the best ways to learn.
  • The audience for this article includes: board of directors, C-Suite, founders, and investors.
  • 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 learning V3

What are the critical learnings in this article?

  • 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.

What is learning?

  • Learning is the relatively permanent change in your talent.
  • The 10 components of your talent are: Self awareness; character, relationship skills, communications, crystallized intelligence, fluid intelligence, cognitive skills, ability to quickly learn and unlearn, creativity, and physical capabilities.
  • All talent is based on the biological structure of your brain i.e. your neurons and the synapses which connect your neurons.
  • 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.

Why do you learn?

You learn for 3 reasons:

  • Curiosity
  • An external reward e.g. get a promotion or keep your job
  • Your own recognition that you your have a gap between your current talent and the talent you need to solve a problem or reach a goal

What is the best way for you to learn?

Active learning is the best way to learn. E.g.

  • 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.
  • Coaching or teaching someone else is the second-best way to learn.
  • Other good ways to learn are: simulation & role playing, and case study analysis.

All the above approaches engage multiple parts of your brain and significant change your neural connections.

What are the worst ways for you to learn?

The following passive learning approaches don’t result in any significant learning i.e. sustainable change in behaviour and knowledge.

  • Reading reports
  • Attending presentations, lectures

All the above have limited changes to limited parts of your brain. As a result, you gain little deep understanding, long term skills, and knowledge retention. BUT, if you take notes while listening to a presentation or reading documents, your learning is improved.

Why is learning hard for you to do, especially if you’ve been a successful leader?

Learning also requires unlearning.  The world is changing faster than ever before.  Crisis and turmoil are never ending.  The future is unpredictable.

What are the psychological barriers to your unlearning?

  • Unlearning is the conscious process of recognizing that your past skills, experience, and mental models are of limited or no value now.
  • You were an expert – able to successfully do things without deeply thing about it. Unlearning takes you back to making mistakes, which can be very disturbing to you.
  • You have become emotionally attached to your mental models.
  • Your past expertise and experience are part of your identity. Information which contradicts your past, triggers defensive mechanisms to protect your ego.
  • Learning involves mistakes and uncertainty. This is very uncomfortable for leaders who like to project competence and confidence.
  • Past successes create the cognitive bias that overestimates your ability in new areas. This results in your believing that you don’t need to learn.

What are the neurological barriers to your unlearning?

  • When those skills and knowledge that resulted in your success are challenged, your brain triggers the same defensive and emotional stress response as when you are in physical danger.
  • Your brain has developed many short cuts to enable fast decision making. But when the world that created those short cuts has changed, or when your brain is overloaded, you’ll continue to make those same short cut decisions – which are no longer valid.
  • When you’re under stress, the part of your brain that detects danger, reduces access to the planning and reasoning parts of your brain. When you are in high anxiety, you are incapable of learning new or complex information.
  • When you first learn something, you need your prefrontal cortex to go through intense conscious concentration and effort to create neural connections which connect external input to your behaviours and decision. Repetition over time results in your subconscious and automatic behaviours and decisions.
  • Unlearning is a painful process which requires your prefrontal cortex to consciously suppress your automatic behaviours and decisions AND to create new neural connections which will be stronger than your old neural connections. Your old neural connections are not deleted but become weaker over time.

Can everyone learn?

  • Many leaders can learn.
  • Many leaders are unable to learn. They cannot overcome their psychological and neurological barriers to learning. The lack of self awareness results in total conviction that they do not need to learn.
  • In today’s hypercompetitive and turbulent world, the only way for leaders and their companies to succeed is to learn faster and better than competitors.

 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.
  • Identify which situations requires learning and unlearning vs those situations where you can rely on your automatic behaviours and decisions, based on your historically successful mental models.
  • Identify those few critical business decisions which require you to maximise your learnings.

 What further reading should you do?

What are the core components of talent? Koor and Associates

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

Is your company planning to fail? Koor and Associates

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

Note taking is key to value creation. Koor and Associates

https://koorandassociates.org/creating-business-value/note-taking-is-key-to-value-creation/

Tom Koor

Do you need to transform your brain?

Do you need to transform your brain?

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

Why am I able to help business leaders succeed, without telling them what to do?

  • The leader must make major critical decisions and business changes they’ve never successfully done before.
  • Leaders who want me (or a subject matter expert) to tell them what to do will usually fail. Why? Hearing what I say, seeing my presentation, or reading my presentation results in leaders having: little in depth understanding, low long-term retention of knowledge, little ability to successfully answer challenging questions, and little ability to make to make ongoing changes to the leaders’ actions.
  • What results when I ask leaders questions and suggest the thinking they need to do to make their decisions and manage their execution? Leaders have a deep understanding of the knowledge, retain the knowledge for long-periods of time, can successfully answer challenging questions, and can make ongoing changes as they execute.
  • To learn and understand something new requires their brains to create new neural connections. Brains naturally resist this process. Brains will find many reasons not to change. Changing the mental model of a leader results in mental discomfort, stress, and pain.
  • A leader doing their own thinking results in them persuading and convincing themselves, with less resistance and pain.

Sharing my learnings

Below are links to my website containing new and revised articles since my last update in May. The critical learnings 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? V5

  • 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.
  • Any role many be comprised of both people and technology (such as software, including AI) talent.
  • The 10 core components of talent apply to both people, technology, and AI.

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

How profitable are public stocks?

  • The majority of US public stocks from Dec 1925 to Dec 2023 had negative returns.
  • The best performing 4% of US public stocks from 1926 2016 provided the entire stock market gains which exceeded one-month Treasury Bills.
  • S&P 500 outperformance relative to S&P 600 small cap and Russell 2000 has been increasing over time.
  • Most U.S. large cap funds have underperformed the S&P 500 for the past 15 years.
  • Most U.S. mid-cap funds have underperformed the S&P mid-cap 400 for the past 15 years.
  • Most U.S. small-cap funds have underperformed the S&P small-cap 600 for the past 15 years.
  • It appears to be close to impossible to predict the future performance of equity funds by looking at past performance.

https://koorandassociates.org/selling-a-company-or-raising-capital/how-profitable-are-public-stocks/

How profitable is private equity?

  • The traditional PE equity value creation model appears broken. For 40 years the approach has been financial leverage and increasing the price to EBITDA multiple. This approach now often appears to fail.
  • The future is impossible to predict. The future is uncertain. The future cannot be predicted by extrapolating historical trends.
  • Successful GPs and LPs will be those who have the desire and ability to transform themselves.

https://koorandassociates.org/selling-a-company-or-raising-capital/how-profitable-is-private-equity/

How profitable is venture capital?

  • If you were good at predicting which fund managers would be successful, you could have had excellent returns. But many Limited Partners (LPs) lost money from their investments.
  • The trend has been that the % of funds providing any cash return has been declining.
  • I have read multiple articles that some LPs have started to question VC fund managers who are showing high IRR results (which include both actual realized returns and estimated future unrealized returns) while the LPs are receiving little or no cash because the fund managers are unable to sell their investments to buyers.

https://koorandassociates.org/selling-a-company-or-raising-capital/how-profitable-is-venture-capital/

How profitable are search funds?

  • The IRR for traditional search funds in Canada and the US has been 35.2%.
  • To make a profit by investing in search funds, you need the ability to predict which people (searchers or managers of funds which invest in searchers) have the talent to be successful.
  • 66% of search funds with an investment return, lost some or all their investor money. A small number of search funds generated much of the IRR return e.g. 8 exits had IRRs of 100% or more.
  • You may need to fund between 30 to 45 searchers, to have a high chance of approaching the IRR for the asset class as a whole.

https://koorandassociates.org/selling-a-company-or-raising-capital/how-profitable-are-search-funds/

How profitable is angel investing? V4

  • Someone making investments in individual angel startups has the potential to make profit if: has the capital to create a diversified portfolio, the time to do due diligence and support the portfolio companies, the talent to select potentially profitable startups.
  • Someone making investments in an angel fund has the potential to make profit if: has the time to do due diligence and the talent to select fund managers who will be profitable in the future.
  • In either of the above cases, you may need to wait 10 or more years before achieving a cash profit.

https://koorandassociates.org/selling-a-company-or-raising-capital/how-profitable-is-angel-investing/

Are you an angel investor or gambler? V3

  • You may need to create a portfolio of 20 or more companies.
  • You might need to invest $800,000 or more.
  • You need the skills and time for both due diligence and helping founders succeed. Money by itself is not enough.
  • You need to determine if you’re putting capital into early-stage companies because: you are an investor; you are a gambler; or this is a charitable activity and not part of your overall investment portfolio.

https://koorandassociates.org/selling-a-company-or-raising-capital/are-you-an-angel-investor-or-gambler/

Traditional succession planning dooms your company to failure? V3

  • Board directors and C-Suite executives must be able to make major decisions on the day they are appointed. Needing to learn about the company for 6-12 months risks failure.
  • Board directors and C-Suite executives need to have the capabilities to succeed in a future which is very different from the past. These leaders are of limited value if they only have the skills and experience to solve yesterday’s problems with the day before’s solutions.
  • Board director and C-Suite talent requirements must be defined in terms of the 10 core components of talent. The traditional approach of focusing on crystallized intelligence (i.e. historical skills, knowledge, and data) is insufficient in today’s turbulent and hyper-competitive world.

https://koorandassociates.org/creating-business-value/traditional-succession-planning-is-obsolete/

Personal Update:

  • Mentored a startup at the University of Toronto, Department of Engineering. The approach was based on weekly advisory board meetings.
  • Continued as Board Director at a private company.
  • Continued as a Patient Family Advisor at Sunnybrook Hospital.
  • 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 276.000,000. 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.

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.

 

To support the Geoff Carr Fellowship at  Lupus Ontario

Link to my Geoff Carr Fellowship fundraising page

Tom Koor

Your company will fail. V3

Your company will fail. V3

 What is the purpose of this article?

This article enables a discussion about your company’s long-term survival and competitively differentiated returns to investors.

The audience for this article includes: boards of directors, CEOs, the C-Suite, individual investors, and institutional investors,

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: Your company will fail. V3

What are the critical learnings in this article?

Most companies will: fail, disappear, or provide poor returns to their investors.

Most companies will not survive.

Few major companies survive:

  • 16% of major companies in 1962 survived until 1998.1
  • Of the 500 companies in the S&P 500 in 1957, only 74 remained on the list in 1997. Only 12 of those 74 outperformed the 1957-1997 S&P index.  An investor who put money into the survivors would have done worse than someone who invested only in the index.1
  • 31% of Fortune 500 companies went bankrupt or were acquired from 1995 to 2004.2
  • 52% of Fortune 500 companies went bankrupt, were acquired, or disappeared between 2000-2015.3
  • 50% of the S&P 500 will not be on the list in 10 years’ time.4

 Most public companies will not survive.

  • A Fortune 500 company will survive an average of 16 years.5
  • The typical half-life of a North American public company is 10 years.5
  • Global public companies with $250 million+ market cap have a typical half-life of 10 years.5
  • 28,853 companies traded on US public markets from 1950 to 2009. Half life was only 10.5 years.6

Global CEOs recognize that there’s a good chance their companies will not survive.

  • In 2023, 45% of global CEO thought that their company would be financially viable for 10 years or less, if it kept running on its current path.7
  • In 2024, four in ten CEOs believed their company will no longer be viable in ten years if it continues on its current path. The majority of CEOs believed they will not be in their current role in five years time. 8

Most companies will not recover from a crisis.

Companies do not recover from crisis.9

  • 20% of companies grow from insurgency to incumbency, but then two-thirds of them stall out and less than 1 in 7 stall-outs recover.
  • At any given moment, 5%-7% of companies are in free fall or about to tip into it. Only10%-15% of companies pull out of free fall.
  • 94% of large company executives site internal dysfunctions as their key barrier to continued profitable growth.

During turbulent times, the number of sinking ship companies increases 89%10

 Few major companies have sustained value creation.

Few major companies have sustained value creation:

  • 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.11
  • Less than 13% of global companies had sustained value creation in the 1990s.12
  • 12% of public companies had sustained value creation from 2002 to 2012.13
  • Mark Leonard, CEO of Constellation Software, in his final annual CEO letter said: “Qualified and competent Directors are very rare, and not surprisingly, the track record of most boards is awful. According to the 2017 Hendrik Bessembinder study of approximately 26,000 stocks in the CRSP database, only 4% of the stocks generated all of the stock market’s return in excess of one-month T-Bills during the last 90 years. The other 96% of the stocks generated, in aggregate, the T-Bill rate over that period. This means that 4% of boards oversaw all the long-term wealth creation by markets during that period. Even more disturbing, the boards for over 50% of public companies saw their businesses generate negative returns during their entire existence as public companies.”14
  • John Rekenthaler study of the largest 5,000 US companies stock prices rom Jan 2011, to Dec 2020 showed that after 10 years, 42% ended in the black, 36% lost money, and 22% had disappeared. 15
  • In 2023, 0.4% of large companies had SVC (Sustained Value Creation) for 10 years. 10% had done it for 8 years. Half the companies had 6% or less annual shareholder return over 10 years. 16

Major changes almost always fail or create limited value.

  • Only 12% of major changes produce lasting results. 17
  • 50% diluted the value of the company.18

 Most large-scale tech programs fail

More than two-thirds of large-scale tech programs are not expected to be delivered on time, within budget, or within their defined scope. 19

Most public companies underperform the indices.

  • The 1,000 biggest publicly traded US stock from January 2011, to Dec 2020, 80% underperformed the Morningstar U.S. Stock index.20
  • In 2023, 72% of the stocks in the S&P 500 index, underperformed the index.21

Most actively managed public market funds underperform the indices.

Over a 20-year period, over 93% of large cap US funds underperformed the S&P 500 index.22

The average hedge fund underperforms the public market indices.23

  • From 2011 to 2020, the average hedge fund underperformed the S&P 500 every year.
  • In 2007 Warren Buffet made a bet with Protegé Partners that an S&P 500 index fund would outperform a group of hedge funds. Protegé Partners selected 5 fund-of-funds, which were invested in a total of 200 funds. In the 2008-2017 time period, a $1 million investment with Protegé Partners selection would have earned $220,000. The S&P 500 index earned $854,000. In 9 of the 10 years, Protegé Partners selection under performed the S&P 500 index. Warren Buffet won the bet.

Many private equity funds underperform the public market indices.

In the 10 year period ending 2024, the top quartile of private equity funds significantly outperformed the S&P 500 index. The bottom quartile significantly underperformed the S&P 500 index.  If you could have predicted which PE funds would end up in the top quartile, you would have beaten the S&P 500 index. If you could have predicted the top quartile stock in the S&P 500 index, you would have beaten the S&P 500 index. 24

Many venture capital funds underperform the public market indices.

Half of VC funds underperform the public markets.25

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.
  • Your next steps will vary, depending upon the type of company you are. E.g. public, private, investment fund (e.g. Private Equity, VC fund, etc. The following suggestions should be reviewed an adapted to your situation.
  • Ask the question “Will your company be economically viable in 10 years if your company continues the current course? If yes, why? If not, why not”. Ask: your major shareholders, your board of directors, your C-Suite.
  • Review the results of your scenario planning. You must have at least three scenarios: your company fails, your company is wilding successful, the future based on currently approved plans and
  • Based on the above analysis, what changes are needed to reduce the chance of your company failing. Step one is to consider the talent on the board of directors. Step two is to consider the talent in the C-Suite. Additional steps are specific to your situation.

Footnotes

1 “Creative Destruction – why companies that are built to last, underperform the market”, by Richard Foster & Sarah Kaplan

2 “Unstoppable” by Chris Zook, 2007, page 7

3 Accenture 2016

4 “2018 Longevity Report” by Innosight Consulting

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

6 “Scale” by Geoffrey West, 2017, Penquin Press, New York, Page 402

7 PWC’s 27th annual global CEO Survey

https://www.pwc.com/gx/en/ceo-survey/2024/download/27th-ceo-survey.pdf

8 PWC’s 28th annual global CEO Survey

https://www.pwc.com/gx/en/issues/c-suite-insights.html

9 “The founders mentality”, by Chris Zook and James Allen, 2016

10 Bain website article “The “New Normal” Is a Myth. The Future Won’t Be Normal at All”

https://www.bain.com/insights/the-new-normal-is-a-myth-the-future-wont-be-normal-at-all/

11 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

12 “Profit from the Core” by Chris Zook. 1,800 companies in seven countries with sales in excess of $500 million analyzed.  Criteria were: 5.5% after inflation sales growth; 5.5% real earnings growth; total shareholder returns exceed cost of capital.

13 Christoph Loos, CEO Hilti Group, Swiss AmCham Luncheon, September 1, 2015.  Analysis based on about 2,000 public companies in 2002 with revenues greater than $500 million.  Sustainable value creation defined as: real revenue growth exceeding 5.5% per year, real profit growth exceeding 5.5% per year, and earning cost of capital.

14 https://www.csisoftware.com/docs/default-source/investor-relations/presidents-letter/presidents-letter-april-2018-final.pdf

15 “How many stocks beat the indices” John Rekenthaler, April 26, 2021 Morningstar

https://www.morningstar.com/markets/how-many-stocks-beat-indexes

16 “Sustained value creation – the test of the best”  Bain Jan 21, 2025. Bain’s SVC definition: net profit exceeds cost of capital and real top line growth

 https://www.bain.com/insights/sustained-value-creation-the-test-of-the-best-infographic/

17 Transformations that work, Harvard Business Review May June 2024 Michael Mankins, Patrick Litre, Bain Partners

https://hbr.org/2024/05/transformations-that-work

18 “It’s 8-to-1 against Your Change Program”, Bain website, Managing Change Blog, 2017 June 23

https://www.bain.com/insights/its-8-to-1-against-your-change-program-how-to-beat-the-odds/

19 November 13, 2024  Boston Consulting Grouphttps://www.bcg.com/publications/2024/most-large-scale-tech-programs-fail-how-to-succeed#:~:text=BCG’s%20latest%20research%20shows%20that,year%20for%20a%20single%20program.

20 How Many Stocks Beat the Indexes? Unlike the children of Lake Wobegon, most companies are below average. John Rekenthaler Apr 26, 2021

https://www.morningstar.com/markets/how-many-stocks-beat-indexes

21 Marketwatch, Dec 30, 2023

https://www.marketwatch.com/story/a-record-share-of-s-p-500-stocks-have-underperformed-the-index-in-2023-as-weirdest-bull-market-in-decades-marches-on-5d3b4cf5

22 SPIVA U.S. Mid-Year 2023 report

https://www.spglobal.com/spdji/en/spiva/article/spiva-us/

23 “The S&P 500 index out-performed hedge funds over the past 10 years. And it wasn’t’ even close”

https://www.aei.org/carpe-diem/the-sp-500-index-out-performed-hedge-funds-over-the-last-10-years-and-it-wasnt-even-close/

24 CCC Google Gemini Deep Research Analysis, March 25, 2023

25 Robert S. Harru, Tim Jenkinson, Steven N. Kaplan, and Ruediger Stucke

Has persistence persisted in private equity?

November 2020, Becker Friedman Institute for Economics at University of Chicago

https://bfi.uchicago.edu/wp-content/uploads/2020/11/BFI_WP_2020167.pdf

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/

“Traditional corporate governance dooms your company to failure”, Koor and Associates

https://koorandassociates.org/corporate-governance/5786-2/

“Traditional risk management dooms your company to failure”, Koor and Associates

https://koorandassociates.org/corporate-governance/traditional-risk-management-dooms-your-company-to-failure/

“Traditional strategic planning dooms companies to failure”, Koor and Associates

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

“Traditional business transformation dooms your company to failure”, Koor and Associates

https://koorandassociates.org/business-transformation/5920-2/

“Scenario planning – what is it?”, Koor and Associates

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

Tom Koor

What are the three greatest risks to your company?

What are the three greatest risks to your company?

 What is the purpose of this article?

This article enables a discussion regarding the three greatest risks to your company.  The audience for this article includes: boards of directors, CEO, C-Suite, individual investors, and institutional investors.

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: What are the three greatest risks to your company

What are the critical learnings in this article?

The three greatest risks to your company are:

  • The talent on your board of directors
  • The talent on your C-suite
  • If you have controlling shareholders, the talent of the controlling shareholders.

Why are these three the greatest risks?

#1 They make the business decisions with the greatest impact on the company e.g.

  • Appointment and termination of the CEO
  • Assessment and approval of the talent selection, development, and exiting processes and policies – including your board of directors and C-Suite.
  • Assessment and approval of: the strategic plan, budget, and policies.

#2 They monitor the performance of the company, its talent, processes, and technology. They take corrective action.

#3 They have, or lack, a variety of external relationships which can enable your company’s success

#4 They have, or lack, the capability to assess the analysis and recommendations provided to them from internal and external sources.

#5 Their behaviours, actions, and decisions communicate the expected values, morals, and ethics to the entire company and members of your company’s ecosystem.

The talent as a whole must be competitively differentiated. 

  • If the talent as a whole significantly lags the competition, the company will under perform or fail.
  • This does not mean that every single person in the above talent pool must be better than all of the competition. Company success requires a team.

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.
  • Define what you mean by risk vs uncertainty.
  • Define how your measure the impact of risk e.g. how does the measure of a high-risk item compare to the measure for a low-risk item.
  • Describe your future scenarios. There must be at least three failure scenarios. #1 You company goes out of business. #2 Your company creates negative economic profit.  #3 Your company produces below median benchmark results.
  • Define the evaluation criteria for talent. Start with the criteria outlined in the further reading section below: “What are the core components of talent? V4”
  • Do an anonymous self assessment of your talent. The directors assess the board as a whole and C-Suite as a whole. The directors also assess any controlling shareholders. The C-Suite assesses the board as a whole and C-Suite as a whole. The C-Suite also assesses any controlling shareholders. The assessment questions are: Will the talent at the board, C-Suite, and any controlling shareholders enable company success in every future scenario. If so, why? If not, why not.  For the scenario in which your company fails, what components of talent enable failure?
  • Discuss the results. Create an action plan to increase the chances of your company’s success and reduce the chances of failure.

What further reading should you do?

What are the core components of talent? V4 Koor and Associates

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

Your company will fail.

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

Jeff Bezos 2020 letter to shareholders – his final one.  He quantities value creation in financial terms for some members of Amazon’s ecosystem.

https://www.aboutamazon.com/news/company-news/2020-letter-to-shareholders

Tom Koor

What is your business strategy? V2

What is your business strategy? V2

 What is the purpose of this article?

This article enables a discussion about what is your company’s business strategy. The audience for this article includes: the board of directors, C-Suite, and investors.

This article is intended for business who have to compete for customers, or investors.  Therefore, this article is not intended for: pension funds, sovereign wealth funds, etc.

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: What is your business strategy V2

What are the critical learnings in this article?

  • Your business strategy is about making an integrated set of choices that compels desired customer and ecosystem member actions.
  • Your business strategy, company purpose, and North Star metric are all inter-related.

Are there different types of strategies?

There are many different types of strategies. E.g.

  • Business strategy;
  • Strategy for winning a war; or
  • Strategy to win at the Olympics.

The common factor is: What does success look like?

What is a business strategy? 1

A business strategy is about making an integrated set of choices that compels desired:

  • Customer actions; and
  • Ecosystem member actions

 

Your company’s strategy includes both the choices you’ve made today and the choices you’ve made in the past.

Doing nothing is always a choice you can make.  Many leaders don’t understand that they have made the do-nothing choice.

Steve Jobs supposedly said “Deciding what not to do is as important as deciding what to do””

What are the four components of a business strategy?

  • Desired actions: e.g. what are your desired actions for your customers? Switch from a competitor to your company? Stay with your company?  Buy more from your company? Recommend your company to others, resulting in viral grow? Etc.
  • Compels: the desired action is irresistible for the customer. Emotion is more powerful than logic in compelling actions. Thus, you must be focusing on the heart, with additional support via logic
  • Choices: You have at least two alternatives, and decide which alternative(s) to execute.
  • Integrated set: e.g. your customers may perceive that your value proposition 2 has multiple components. Each component has choices. The combined set of choices results in compelling action.

Does your business strategy reflect the purpose of your company?

Why does your company exist?

Larry Fink, in his 2018 letter to CEOs, said “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate…..Without a sense of purpose, no company, either public or private, can achieve its full potential…..And ultimately, that company will provide subpar returns to the investors” 3

 Bain’s 2024 analysis showed that companies that delivered both stakeholder and financial value delivered better shareholder value. 4

Jeff Bezos quantified value creation for some members of Amazon’s ecosystem in financial terms, in his final letter to shareholders in 2020. This letter included his first shareholder letter from 1997.  Amazon’s current CEO continues to include in his shareholder letter, the original 1997 letter. 5

Is your North Star metric aligned with your company purpose and business strategy? 6

“…having an overarching metric that gives direction and aligns all the other metrics together can be infinitely useful.

The North Star metric gives you a direction that is in line with the value you offer to your customers. That direction is the single largest driver of sustainable long-term growth”

In order to determine the single most important metric for your growth model, you should look at how your product delivers value to your customers. You should be able to understand the value your customers get from your product looking at user engagement and activity level. For example, for Medium (the reader and writer network) the metric is “total time reading,” for Facebook it is “daily active users,” for Airbnb the metric is “nights booked,”

Why are choices about ecosystem members critical?

  • One example of an ecosystem member is your employees. Do current and future employees want to work for your company? Are they passionately committed to your company’s success? Is their purpose aligned with your company’s purpose and North Star? Do current and potential employees perceive a competitively differentiated value proposition for joining or staying with your company? What are the choices you’ve made to attract, retain, and develop the employees you need?
  • There are many more choices your company can make regarding ecosystem members.

What are the seven inter-related strategic choices you need to make?

  • What is the problem you are trying to solve?
  • Who has the problem?
    1. How do your potential customers describe and perceive their problem?
    2. Which customer segments will your target?
  • What is your competitively differentiated value proposition, in the hearts and mind of your target customers?
  • What is the competitively differentiated talent you need?
    1. What roles will have the greatest impact on planning and delivering the value proposition?
    2. What are the specific capabilities of this talent?
  • What are the competitively differentiated capabilities you need? E.g.
    1. Resources such as: intellectual property, technical expertise, technology, financial, partnerships, relationships, channels, talent
    2. There are two sets of processes: #1 processes to acquire and manage the resources #2 Marketing, sales, onboarding, off boarding, R&D, production.
    3. What are the specific points of competitive differentiation?
  • What will be the total cost of developing and delivering the value proposition? Thus includes the talent and capabilities.
  • What are the values you will use in making your choices?

You can document the key points of your strategic choices in a single slide.

 What are your greatest challenges to creating a strategy that enables value creating growth?

  • Listening to your customers as you talk with them to understand their perception of their problems. Steve Jobs supposedly said “If you define the problem correctly, you almost have the solution”. Albert Einstein supposedly said “ If I had only one hour to save the world, I would spend fifty-five minutes defining the problem, and only five minutes finding the solution”. Many leaders have strong opinions regarding what they think are customer problems.
  • Confusing a strategic plan with a tactical plan to achieve the strategy. A common definition of a strategic plan is  “A strategic plan describes the company’s current state, desired future state and how to go from one to the other…. business goals and projects to achieve them… 12-month action plan that lists specific initiatives”. 7 That definition reflects a tactical plan.  Including a tactical plan in your strategic plan produces a massive document which makes it very hard to focus on the actual strategy.
  • Not discussing and agreeing upon the values used to make your strategic choices. For example, will you include the impact on ecosystem members in your decision making – such as moving employment elsewhere if the result is devastation of local communities that depend on you. Is your “North Start” maximizing shareholder value?
  • McKinsey has said what strategy is not “it is not a wish list of possible outcomes”.

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.

Phase 1

  • Prepare a strategy assessment document by reviewing your existing strategic plan. Use the above definition of strategy.
  • Identify what’s missing.

Phase 2

  • Interview your board of directors and C-Suite to prepare a second strategy assessment document.
  • Ask what they personally think the strategy is and what they believed other director and C-Suite think the strategy is. Use the above definition of strategy.
  • Discuss the implications of the different points of view regarding strategy and the gaps in in your strategy.

Phase 3

  • Identify and assemble to right talent to make and revise the choices.
  • Define the process for making and revising the choices. Revisions may occur at any time.  Train the decision makers. The process will also identify the required capabilities of external advisors and support people. The process must document the alternatives considered and the rationale for the choice made.
  • The process must describe the links between strategy and tactics, the links between the strategic plan and the tactical plan.

Footnotes

1 Adapted from the strategy definition in the following article

“Strategy for startups-Redux” Roger Martin Medium Sep 16, 2024

https://rogermartin.medium.com/strategy-for-start-ups-redux-e8a04a1d8b72

2 “What is a value proposition? Koor and Associates website.

https://koorandassociates.org/understanding-customers/what-is-a-value-proposition/

3 Harvard Law School Forum on Corporate Governance, Larry Fink’s January 2018 letter to CEOs

https://corpgov.law.harvard.edu/2018/01/17/a-sense-of-purpose/

4  “Financial or Stakeholder Value? For Shareholders, Both Are Best” Bain, July 10, 2024

https://www.bain.com/insights/financial-or-stakeholder-value-for-shareholders-both-are-best-snap-chart/#:~:text=or%20Stakeholder%20Value%3F-,For%20Shareholders%2C%20Both%20Are%20Best,Leading%20companies%20deliver%20both.

5 Jeff Bezos final letter, as CEO, to shareholders in 2020

https://www.aboutamazon.com/news/company-news/2020-letter-to-shareholders

6 Forbes August 24, 2017 Andrew Miller

https://www.forbes.com/sites/forbesagencycouncil/2017/07/19/how-to-find-your-companys-north-star-metric/#:~:text=In%20order%20to%20determine%20the,user%20engagement%20and%20activity%20level

7  I copied this definition from the website of a major organization.

 

Tom Koor

Does your board compensation reflect board value? V2

Does your board compensation reflect board value? V2

 What is the purpose of this article?

Enable investors, the board directors, and management to discuss the board’s impact on value creation and related compensation.

This article is focused on for-profit company boards, not: charities, government entities, or not-for-profit organizations.

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 cand download a PDF of this article from: Does your board compensation reflect board value V2

What are the critical learnings in this article?

  • The board of directors’ impact on value creation is unclear.
  • The relationship between director compensation and value creation is unclear.

Let’s assume your company has the principle that value creation is reflected in compensation. 

  • CEO compensation can range up to $100 of millions per year.
  • At the June 13, 2024 Tesla Annual General Meeting, shareholders were voting on Elon Musk’s $56 billion compensation package (yes – $56 billion).
  • Many C-Suite and senior executives make millions of dollars a year.

What does board compensation look like in one of Canada’s largest public companies?

This is a typical situation. I won’t mention the company name, which could distract the conversation.

  • The CEO compensation is more than $10 million per year.
  • The CEO compensation is about three times the total compensation of the board.
  • The average director compensation in this company is what a successful MBA graduate would make in their third year in a tier 1 strategy firm.

What is the relationship between board compensation and value creation?

Do the differences between board compensation and management compensation reflect:

  • The board having little impact on value creation?
  • The board has decided to allocate the bulk of its value creation impact to others in the company’s ecosystem e.g. executives?
  • The boards of large companies view their contribution as charitable or giving back to society?
  • Or something else?

The ability of talent to create value in a specific company is impacted by several factors, including:

  • The company’s brand or reputation.
  • Intellectual property.
  • Technology
  • Processes
  • Business Partners
  • Capital

Let’s not forget luck.

Why should you focus on value creation?

  • I’ve seen countless companies that that talk about strategic objectives, strategic initiatives, strategic etc. I’ve seen these achieved, while value creation is poor, and in some cases the company fails and goes out of business.
  • This is one of the reasons I talk about value creation plans and not strategies. A discussion about “successfully achieving a strategy” is very different from a discussion about “successfully achieving value creation”

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.

Discuss and agree upon:

  • Does the board of directors have ultimate authority? If not, who does?
  • Does the board of directors have ultimate accountability for your company’s performance and value creation? If not, who does?
  • If your company has controlling shareholders (e.g. private equity, voting trust, unanimous shareholders agreement) do they have ultimate authority and accountability for company performance and value creation? If not, who does?
  • What does accountability mean? If the people with accountability have poor personal performance, what are the implications for those people?
  • What are the principles used to determine the value creation of each person in the company, including board directors?
  • What are the principles used to determine how much of each person’s value creation should be in their personal compensation vs allocated to others?
  • What is your company’s overall value creation plan, metrics/KPIs (Key Performance Indicators), process for setting value creation targets, and process for tracking results.
  • What % of your company’s pre-tax profits are allocated to: the board of directors, each director role, and each role in the C-Suite?
  • Based upon the above, discuss the compensation of the board relative to their value creation. And do a benchmark comparison with other companies.
  • Based on the above, discuss the potential for value creation in director roles, and the implications for the director capabilities.

 What further reading should you do?

Professor Dieder Cossin and Estrelle Metayer “Does your board really add value to strategy?”, IMD Global Board Center

First sentence in the article is “Boards are ultimately responsible for the long-term success of their organisations.”

https://www.imd.org/research-knowledge/articles/board-strategy/

Jeff Bezos 2020 letter to shareholders – his final one.  He quantities value creation in financial terms for some members of Amazon’s ecosystem.

https://www.aboutamazon.com/news/company-news/2020-letter-to-shareholders

“Traditional corporate governance dooms your company to failure”, Koor and Associates

https://koorandassociates.org/corporate-governance/5786-2/

“Is your company planning to fail?”, Koor and Associates

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

Tom Koor

AI Talent – What is it? V2

AI talent – what is it? V2

 What is the purpose of this article?

This article enables business leaders to begin a discussion of what is AI and the value talent.

The audience for this article includes: the board of directors, C-Suite, and investors.

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: AI Talent – What is it V2

What are the critical learnings in this article?

  • Generative AI is software which creates content, such as text, that has never existed before.
  • ChatGPT-4 doesn’t “understand” text in the human sense. It’s predicting text based on patterns it learned during training.
  • Directions and questions to ChatGPT-4 are transformed into floating-point numbers, then analyzed using a large database of floating-point numbers. The result of the analysis are floating-point numbers which are then turned into text.
  • Fundamentally, ChatGPT-4 can be viewed as an advanced form of a word predictor, but it’s a highly sophisticated one. ChatGPT-4 doesn’t “understand” text in the human sense. It’s predicting text based on patterns it learned during training.
  • Scientists are sill experimenting with, and trying to predict and explain, the advanced capabilities of Generative AI.

What was the approach used to create this article?

I asked ChatGPT-4 Plus Turbo questions in December 2023 and January, February, May 2024. I summarized the answers in this article.

The scope of this article is ChatGPT-‘s abilities with text questions and text answers. I recognize that in May2024, a variety of AIs are also able to create: voice, song, image, video, spreadsheets, PowerPoint presentations, word documents, etc.

What is AI?

AI is software which simulates human intelligence, with behaviours such as learning and problem solving

How many types of AI are there?

There are two types of AI:

  • Narrow or weak: These are designed and trained for a specific task such as a virtual assistant.
  • General or strong AI: These have the ability to perform any intellectual task a human can. As of Feb 08 2024, these are still theoretical and don’t exist

How many branches of AI are there?

There are 6 branches:

  • Machine learning: makes predictions or decisions based on data.
  • Deep learning: a subset of machine learning, based on multi-layer neural networks.
  • NLP (Natural Language Processing): Can have a dialogue in a natural human language.
  • Robotics: software than performs tasks autonomously.
  • Expert systems: Solve complex problems in a way that looks like a human decision maker.
  • Computer vision: Can interpret visual images.

Software solutions may incorporate some, or all, of the branches of AI.

When were commercial software tools available for the different branches of AI?

1950s beginning of using computer for tasks that mimic human cognitive functions.  E.g. Logic Theorist.

1980s expert systems designed to mimic the decision-making processes of human experts.

1990’s, 2000’s AI technologies embedded in more generalized software, without being identified as AI.

2010s Machine learning, deep learning and big data.

2020s Large Language Models.

Is Google search an example of AI?

Yes. Some of the AI technologies in Google search include:

  • Natural language processing;
  • Semantic understanding: understanding concepts, relationships between words ,and context
  • Ranking Algorithms: ranking search results based on the authority of a website, quality of content, and how well it matches the search query.
  • Machine learning algorithms: machine learning continuously improves search algorithms, based on user interactions and feedback.

What is generative AI?

Generative AI is a type of technology that is designed to create or generate new content such as text, images, music, and code that is often undisguisable from content created by humans. The AI has been trained on large amounts of existing content.

 What is ChatGPT-4?

ChatGPT is software developed by OpenAI. It’s designed to generate human-like text based on the input it receives. ChatGPT can answer questions, write essays, create stories, and perform a variety of language-based tasks

What does GPT stand for?

GPT stands for “Generative Pre-trained Transformer.”  “Generative” indicates its ability to generate text, “Pre-trained” means it has been trained on a large dataset before being fine-tuned for specific tasks, and “Transformer” refers to the type of neural network architecture it uses.

How much data was used to generate the ChatGPT-4 model?

  • 45 Terabytes of data was used to create the ChatGPT-3 model.
  • Third party estimates are that 100s of terabytes of data were used to create the ChatGPT-4 model.

How big is the ChatGPT-4 model?

  • Third party estimates are that the model has from 1.76 trillion parameters to 100 trillion parameters.
  • I used the Perplexity AI search engine to find this information. ChatGPT-4 did not provide me with helpful answers.

What is a parameter?

A parameter is a floating-point number.

That’s right.  100s of terabytes of data are processed to create a data base of up to 100 trillion floating-point numbers.

Is ChatGPT-4 A Large Language Model?

Yes

What is a Large Language Model?

A type of AI designed to understand, generate, and manipulate human language. The “large” refers to the large number of parameters they contain, which can range to the hundreds of billions.

What is a Small Language Model?

The basic functionality is similar to a Large Language Model. There are fewer parameters, ranging from tens of thousands to a few hundred million. The models have few capabilities to: understand complex language and context, and the create appropriate content.

What are the steps to create a Large Language Model?

  • Research and Planning (defining objectives and designing the architecture)
  • Data collection, cleaning and preprocessing (filtering harmful or irrelevant content)
  • Model development: choosing a machine learning framework and creating a prototype to validate the concept.
  • Training the model: pre-training on the initial data. Adjust the hyperparameters to optimize performance. Manage the computing resources to train the model.
  • Evaluation and refinement: metrics-based performance evaluation. Fining tuning with more specific data. Analyze errors to improve the model.
  • Implement additional features
  • Testing
  • Deployment
  • Continuous improvement: monitor performance and make improvements. Update with new data.

How many people are required to create a Large Language Model?

The team size could range from 20 people to hundreds.  The skills could include: research scientists and machine learning engineers, data scientists and data engineers, software developers, systems administrators, product managers, ethics and compliance officers, quality assurance and testing specialists, and technical writers and documentation specialists.

What the major steps Chatgp-4 goes through when asked to do something?

  • The text is transformed into floating-point numbers.
  • Then these numbers are processing by the floating-point numbers in the model.
  • The output is floating-point numbers.
  • The output is then transformed into text.

Fundamentally, is ChatGPT-4 a word predictor?

  • Yes, fundamentally, ChatGPT-4 can be viewed as an advanced form of a word predictor, but it’s a highly sophisticated one.
  • ChatGPT-4 doesn’t “understand” text in the human sense. It’s predicting text based on patterns it learned during training

How does ChatGPT-4 do mathematical, financial, and statistical analysis?

ChatGPT-4 has tools capable of performing mathematical, financial, and statistical analyses

 Do scientists understand why Large Language Models are able to do what they can? Do scientists have models which can predict the behaviour and capabilities of Large Language Models?

The basic mechanism (e.g. predicting the next word in a sequence based on training data) are well understood.

As the models have gotten larger, they have capabilities that are difficult to predict or explain.

The following did not come from ChatGPT.  They are a few quotes from the article “Large language models can do jaw-dropping things. But nobody knows exactly why”  The article was published in the MIT Technology Review March 04, 2024.

  • “We don’t know what capabilities GPT-5 will have until we can train it and test it”
  • “Lots of people have opinions” but no consensus about what exactly is going on
  • “The biggest models are now so complex that researchers are studying them as if they were strange natural phenomena, carrying out experiments and trying to explain the results.”
  • “Most of the surprises concern the way models can learn to do things that they have not been shown how to do.” “This is one of the most fundamental ideas in machine learning – and its greatest puzzle”
  • “Large language models are a whole new mystery”

I still don’t understand, and cannot explain in simple terms, how ChatGPT-4 can write a birthday greeting in the style of William Shakespeare.

What are your next steps?

  • You must do your own fact-based research. The bulk of the above article was based on ChatGPT-4 responses.
  • 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.
  • Identify the role. The role could be a team (such as the board of directors) or an individual.
  • Define the long-term value of the role in your company’s future scenarios. Outline the metrics for measuring the value of the role.
  • Determine the talent components required for the role. You can use the talent components in Appendix 1, or develop your own. If you already have documented talent components, review to ensure they are comprehensive.
  • This can be people, technology, or some combination
  • Define the criteria for assessing and recommending an option. These criteria include risk management. Determine how to manage risk when the outcomes of software solutions cannot be predicted or modeled.
  • Define the options for providing talent. These options could be: people, technology, or some combination.
  • Technology can range from very simple software, through different types of data/knowledge retrieval, through different types of analytical tools, through different types of AI. And there can be a combination of software.  Software can include tools and software packages. Generative AI and Large Language Models are not always the answer for every need.
  • Prepare an ongoing assessment and development process for the role. In the current, and future, hypercompetitive world, talent capabilities must continuously improve.  In the future, technology may play a greater, or lessor, part in a role.
  • Two additional factors to consider: Is a role part of the career development process for people? What will be the impact on career development if the role is automated? Is the value of the role included building and maintaining a relationship with people?  Will those people be able to have relationships with roles that are automated?

 Appendix 1 – The 10 core components of talent1

  • Self Awareness
  • Character
  • Relationship skills
  • Communications
  • Crystalized intelligence
  • Fluid intelligence
  • Cognitive skills
  • Ability to quickly learn and unlearn
  • Creativity
  • Physical capabilities

Footnotes

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

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

Tom Koor

Networking is key to value creation. V3

Networking is key to value creation. V3

 What is the purpose of this article?

Enable business leaders to have a discussion about networking and its role in value creation.

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: Networking is key to value creation V3

What are the critical learnings in this article?

  • All of your networks together can have a total of 150 people.
  • With each person in your network, you have a mutual relationship, with varying degrees of trust, support, willingness to help, emotional, and social connection.
  • Over time, people will enter and leave your networks and move between levels.

Research show that CEOs with diverse networks create higher firm value.1

How do diverse networks impact value creation?

  • CEOS obtain diverse knowledge, leading to innovation
  • Multi industry and multi country relationships lead to more business opportunities.
  • Connections with people having different cultural background, knowledge, and experience help with building a diverse workforce. Value creation requires drawing talent from many different places.
  • Provides CEO with early warning of new and changing: customer needs, competitors, workforce needs, technology, etc.,

Basically, the network provides the CEO with a broad understanding of the world around them and their company.

 What are some of the potential networking benefits to the CEO?

Networking can provide value to the CEO, the CEO’s organization, and to society.  This can be part of the CEO’s life-long learning and un-learning.

  • Exchanging ideas and getting fresh ideas.
  • Sharing and gaining new knowledge.
  • Sharing and gaining different perspectives.
  • Figuring out and getting answers to a question.
  • Being able to find other people who can help e.g. if the CEO wants to learn about taking a private company public and wants to find others who have done this.
  • Meeting their purpose in life and values by helping others when there is no personal or company benefit e.g. mentoring MBA students.

What are the benefits to people for being in the CEO’s network?

These benefits are aligned with the benefits to the CEO.

  • Exchanging ideas and getting fresh ideas.
  • Sharing and gaining new knowledge.
  • Sharing and gaining different perspectives.
  • Figuring out and getting answers to a question.
  • Being able to find other people who can help.

 What is your network?2

  • Your network is your set of relationships with people.
  • The characteristics of a network include: trust, support, willingness to help, emotional, and social connection.
  • You can have 150 people in your network, with whom you have some degree of mutual trust, support, willingness to help, emotional and social connection. 150 is a cognitive limit, determined by your psychology, your mental ability, and energy to create and maintain your network.  The 150 number is known as Dunbar’s number, determined by Robin Dunbar, a British anthropologist and evolutionary psychologist famous for his work on human social networks.
  • You may have more than 150 people in your network which means that your relationships are not as deep.

What are the different kinds of people in your network?

  • Your network may include: family, friends, neighbours, those you have hobbies with, your church, your charities, etc.
  • Your network may also include people from your business world: colleagues, employees, customers, suppliers, regulators, shareholders, etc.
  • In total, you can have 150 people with whom you can have some degree of mutual social relationship.

What are the different layers in Robin Dunbar’s overall network?

Note that the total number of relationships is 150.

  • 150 people in broader social network. Trust is more limited and based on social norms rather than personal relationships. Limited sharing of confidential information.  Support is more about advice and information sharing than emotional or financial help.  There is some willingness to hep, but based more on social norms rather than personal relationships. Limited emotional connection.
  • 50 of the 150 are friends. Trust is more limited and may be based on a specific context e.g. work. Confidentiality is still respected. General willingness to help, but requires specific request and depends upon the nature of the request. There is sill some degree of emotional connection.
  • Up to 15 of the 50 are good friends. Trust is high but not unconditional. Emotional support is still available, but to a leer degree than for 5 people. You’re still willing to help, but more often need to be asked. You still have emotional connections, often based on shared interests and experiences.
  • Up to 5 of the 15 people in your innermost circle. Trust them the most – perhaps unconditionally. You support the most, which may include financial and emotional. You are willing to help and often help without asking. You have a deep emotional and social connection, which may include love.

What do the layers look like in your business network?

  • 1,500 people (Professional recognition) There is no ongoing relationship. You may know their names, faces, and professional position but you have no ongoing relationship.
  • 150 (General Business Acquaitances) These relationships result in introductions, referrals, collaborations, and opportunities. Tend not to be deeply personal.
  • Up to 50 of the 150 (Extended professional network) Not a shared deep personal bond. Valuable for information exchange, etc.
  • Up to 15 of the 50 (Key professional contacts). A close relationship with a mutual respect and professional support. May include key customers, advisors, and colleagues.
  • Up to 5 of the 15 (Closet professional confidants). You have deep trust with them. They provide critical advice, emotional support, and are often involved in strategic decision making. They may include: advisors/mentors, business partners, or close colleagues

 How do you stay in touch with your business network?

  • 1,500 people (Professional recognition) You share your insights, learnings, and thought leadership content. You speak at events and publish.
  • 150 (General Business Acquaitances) You use general emails to share important news and updates to ensure you sate on people’s radar. You participate or host industry events to enable engaging with multiple people.
  • Up to 50 of the 150 (Extended professional network) Your monthly or quarterly newsletters provides your updates and thought capital. You share achievements and insights on LinkedIn and engage the 50 on LinkedIn.
  • Up to 15 of the 50 (Key professional contacts). You have regular video or coffee meetings, perhaps quarterly. You send personal emails.
  • Up to 5 of the 15 (Closet professional confidants). Your deep personal engagement and mutual support is enabled by regular one-on-one communication. You share personal experiences, insights, and potential opportunities.

Across all 1,500 people you maintain a consistent brand about who you are. You always look for ways to provide value e.g. knowledge, offering help, and connecting people with each other and with opportunities

 How do you grow your network of professional relationships?

  • Your network members proactively do introductions.
  • You ask your network members for introductions.
  • You meet people at events and have a follow-up meeting.
  • You do “cold call” requests for connecting.
  • You respond to “cold call” requests for connecting.

Read appendix A “The difference between a business introduction vs a referral”

 What are the greatest challenges to getting value from professional networking?

  • You don’t believe that networking is valuable.
  • You don’t believe you need to keep learning on both a broad spectrum as well as new deep domain knowledge.3
  • You are not comfortable talking about your issues and challenges.
  • You don’t know who to network with.
  • You don’t take notes during networking discussions and meetings.4

 The greatest challenge to networking is deliberately allocating time to networking.

Individuals are overwhelmed with electronic information.  2009 University of California, San Diego study estimated that the average American was receiving 100,000 words a day, about 34 gigabytes of data.5 A McKinsey Global Institute study in 2012 also estimated 100,000 words a day.6

People don’t have the time to:

  • respond to every email, text, LinkedIn msg, etc.,
  • read all the articles
  • respond and connect with every connection request
  • have regular coffee or Zoom calls with everyone they know.

You’re already swamped by the time needed for all your other networks.

In today’s hypercompetitive world, the work challenges and issues can become all consuming.

What are your next steps for your business network?

  • Define your own definitions and criteria for networking.
  • Go through your existing network of relationships, including business names, and assign them to a level e.g. 5,15,50,150,1500
  • Analyze the results. You may need to reallocate levels across your various networks.  Consider how your business network supports your value creation. You may discover weaknesses in your business network, reallocate levels, and seek to grow certain levels.
  • Create a structured process for creating and maintaining a network of business relationships. Your process will recognize that people will enter and leave your network and that the degree of closeness and engagement with individuals will change over time. This process will be supported by your CRM.

Footnotes:

1 Yiwei Fang, Bill Francis, and Iftekhar, “Research: CEOs with diverse networks create higher firm value”, Harvard Business Review, April 10, 2018

https://blog.hubspot.com/blog/tabid/6307/bid/5057/tips-from-chrisbrogan-on-how-to-beat-dunbar-s-number.aspx

2 Robin Dunbar, “Dunbar’s Number”, New Scientist

https://www.newscientist.com/definition/dunbars-number/#:~:text=The%20rule%20of%20150&text=This%20is%20what%20is%20known,basic%20military%20unit%2C%20the%20company.

3 Exhibit 3 on page 5 of this McKinsey article illustrate the need to continue to learn new deep domain knowledge into your late 70s and even early 80s.

https://www.mckinsey.com/business-functions/organization/our-insights/seven-essential-elements-of-a-lifelong-learning-mind-set

4 Notetaking is key to value creation

Note taking is key to value creation.

5 University of California, San Diego “UC San Diego Experts Calculate How Much Information Americans Consume” Dec 9, 2009

https://qi.ucsd.edu/news-article.php?id=1630

6 Daniel H. Pink, To sell is human, (New York: Riverhead Books, 2012), page 159

Further reading

Herminia Ibarra and Mark Lee Hunter,” How leaders create and use networks”, “Harvard Business Review, January 2007

If you’re going to ask someone to do an introduction

https://koorandassociates.org/creating-business-value/if-youre-going-to-ask-someone-to-do-an-introduction/

 

Appendix What is the difference between an introduction vs a referral?

What is a referral?

  • Purpose: A referral is made with the explicit intention of recommending a business, product, or service to fulfill a specific need or requirement. Referrals are based on trust and often come from previous positive experiences with the service or product being recommended.
  • Endorsement Level: Referrals carry a higher level of personal endorsement and trust. The referrer is essentially vouching for the quality, reliability, and suitability of the business or individual being referred. This involves a certain degree of risk to the referrer’s reputation if the recommendation does not meet expectations.
  • Expected Outcome: The expected outcome of a referral is more concrete than an introduction. There is an anticipation that the referred party will provide a product or service that meets the needs of the party receiving the referral, potentially leading to a business transaction or professional engagement.

 What is an introduction?

  • Purpose: The primary aim of a business introduction is to make two parties aware of each other’s existence and to highlight potential areas of common interest or benefit. It’s a way of expanding one’s professional network.
  • Endorsement Level: An introduction carries a lower level of personal endorsement. The person making the introduction may simply be acknowledging that the two parties might benefit from knowing each other, without making any specific claims about the value of their products, services, or professional capabilities.
  • Expected Outcome: The outcome of an introduction is generally the beginning of a dialogue or a relationship between the introduced parties. There is no explicit expectation of a transaction, partnership, or specific action as a direct result of the introduction.